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Sri Lanka hub status grows despite direct mainline calls to Indian ports

ECONOMYNEXT – Sri Lanka’s Colombo port status as a container hub is growing despite shipping lines making direct calls to Indian ports, a new study by the Asian Development Bank has said.

The Asia–Europe shipping route passing close to Sri Lanka, enables Colombo to become the main hub port for the South Asian region, it said.

The study on maritime co-operation under the ADB’s South Asia Subregional Economic Cooperation (SASEC) program, said Colombo ranks 23rd in container traffic globally, ahead India’s largest ports Mumbai and Mundra.

“Colombo is SASEC’s busiest container port. It is close to the busy Southern Ocean Corridor and acts as a container hub for the subcontinent,” the study said.

Its annual growth was 16.8 percent in 2017, and the transshipment activity, which represents almost 80% of handling, was up by over 20 percent.

“This high transshipment growth rate suggests its role as a hub for the subregion is increasing, despite more direct mainline calls to Indian ports,” the ADB report said.

This ADB view comes at a time when several Sri Lankan shipping sector officials had expressed concern India’s plans to develop its own ports and attract calls by container shipping lines could result in loss of business for Colombo.

The ADB’s SASEC program is developing cross-border connectivity and facilitating more efficient trade among its members.

The program has yielded substantial results in its areas of focus—transport, trade facilitation, and energy—improving transport infrastructure linkages, enhancing trade processes, and building power transmission connectivity, all of which are boosting intraregional trade and commerce.

The ADB said Sri Lanka is better connected than the other South Asian countries by virtue of its hub role, thus providing more direct country-to-country linkages.

India has reasonable connectivity with more direct services but still has significantly less direct linkages than Sri Lanka.

“It is interesting to note that India’s connectivity has declined recently, whereas Sri Lanka’s has risen sharply,” the study said.

“This is probably due to the loss of some direct liner services from Indian ports and the rerouting of such traffic through the Colombo hub.”

(COLOMBO, 09 October 2019)