• Plans being drawn to make Trinco an industrial port; KKS to be jointly developed with India
• A national maritime policy needs to be compiled and approved
• New Indian deepwater ports may draw more int’l traffic, be more complimentary to SL ports than being competitive
• SL shipping industry should be more open minded; legal framework reviewed to allow shipping lines, salvors to establish in SL

The Sri Lanka Ports Authority (SLPA) is charting a path forward to improve Sri Lanka’s maritime ambitions, with plans in place to nearly double the capacity at the Port of Colombo from around 8 million Twenty-foot Equivalent Units (TEUs) to 15 million in the next few years. 

The Port of Colombo was recently recognised as the best-performing port globally for the first quarter of 2024 by Alphaliner. As the SLPA celebrates its 45th anniversary, The Sunday Morning spoke to its Chairman Keith Bernard regarding the journey thus far and what is in store for Sri Lanka’s port sector.

Following are excerpts:

The SLPA celebrated its 45th anniversary this year. Looking back, what are your thoughts?

We celebrated our 45th anniversary as an authority on 1 August. We must give credit to the late visionary Lalith Athulathmudali for converting the Port of Colombo to an authority, as the Sri Lanka Ports Authority. The Port of Colombo itself has been in operation for hundreds of years. 

Since becoming the SLPA, I think we have seen rapid growth as a port in terms of infrastructure, facilities, and in terms of our place in the global maritime sector. I must also give credit to my predecessors who had acted with foresight and vision and given it their best. Our growth didn’t happen overnight; it was a lot of hard work, investment, and some agony also, in getting things done. 

I must also commend the political leadership of successive governments for steering us to where we are today. The team at SLPA must also be recognised for their tremendous effort to bring our ports to where we are today. We work 24 hours a day, seven days a week and year-round.

We began with one terminal, gifted by the Japanese, and later a key turning point was the South Asia Gateway Terminals (SAGT) which brought in the private sector and many private sector best practices, which we also adopted. The construction of the new 6.3 km breakwater post-2000s helped us expand significantly. With that came the Colombo International Container Terminals (CICT), the first deep-sea terminal in South Asia, which allowed us to bring the largest vessels. 

Today we are the main hub port in South Asia and about 85% of the volume we handle is transshipment in nature. We are pleased to be where we are today. Today, our capacity is about 8 million TEUs per annum and last year we recorded about 6.9 million TEUs. I am sure we will do better than that this year.

Looking ahead, what are the SLPA’s plans?

There are two new terminals coming up; one of them is the East Container Terminal (ECT) which will be owned by and managed by the SLPA. It will be a deep-sea terminal with a depth of 18-20 m, allowing us to bring in the larger vessels, and a 1,300 m-long quay allowing us to berth three Panamax-class container vessels at once. We are making good progress, with nearly 50% complete. The entire quay should be complete by the second quarter of 2025. 

We plan to have a large yard (75 hectares) which will service it. Our plan is to handle about 3 million TEUs from the ECT once it is complete. Most of the equipment has been ordered and it will be a semi-automatic terminal comparable to any modern terminal in the world.

The other terminal is the West Container Terminal (WCT), which is also under construction. The SLPA has a Build-Operate-Transfer (BOT) agreement with India’s Adani Group, and it is making good progress. The WCT will have a quay of 1,400 m and a depth of 20 m. The equipment for the WCT is also on order and will be operational by 2026. There are plans for the other ports in Sri Lanka as well.

With both the ECT and the WCT online, we look forward to increasing the Port of Colombo’s capacity to around 15 million TEUs by around 2030. I think we can reach that target with better automation.

Capacity-building is one thing, but what about demand? Will we have sufficient demand to meet the capacity?

Our experience so far has been that every time we have built capacity, demand has followed. Of course, we will not wait around for it to come. We are already holding talks with shipping companies and shipping agents and they have indicated interest.

The Port of Colombo has been named the best-performing port globally for the first quarter of 2024 by Alphaliner, highlighting Colombo’s growth rate of 23.6%, surpassing all other ports worldwide. What does this recognition mean for team SLPA and Sri Lanka?

We are very pleased. I am happy that the port has been able to record this achievement of being the best performing port in the world under my watch. This was mainly because we handled a very large volume in the first quarter of this year compared to last year. 

In the first quarter of this year, compared to 2023, we recorded nearly 40% growth in the SLPA management terminals. Overall, the Port of Colombo recorded nearly 25% growth compared to 2023. 

We have been recognised by Alphaliner, which is highly respected. The credit should go to the management and the staff. We had uninterrupted services throughout this year while dealing with many challenges. 

I must also acknowledge the hard work done with all the terminals to handle the volume. I think it is right that I thank all the shipping lines and agents who put their trust in us and the Port of Colombo, which helped us achieve this recognition.

What are the strategic plans in place to improve the port and maritime sector in Sri Lanka? What about Galle, Trincomalee, Kankesanthurai (KKS), and Oluvil?

The SLPA, with assistance from the Asian Development Bank in 2018-2019, developed the National Port Master Plan. This includes Colombo, Trincomalee, Galle, KKS, Talaimannar, and Oluvil.

The Port of Galle is at present inactive. The plan is to develop it into a tourist-related port. Recently we called for Expressions of Interest (EOIs) from potential investors and port operators to develop Galle as a tourist serving port, perhaps with yacht marinas and marine tourism initiatives. My understanding is that several bids have been received and they are being evaluated.

We plan for Trincomalee Port to become an industrial port. I think it is well placed to support that intention with some of the industries already placed around it. We are considering the possibility of establishing a ship building yard there as well. 

The SLPA was vested with a lot of land in Trincomalee. At present, there is interest in renewable energy projects, for which some of the land can be used. There are also plans to explore the possibility of establishing a fertiliser plant and other chemical-related industries in Trincomalee. There is also some interest in setting up new fuel/energy industries such as green liquid hydrogen around Trincomalee Bay.

The Indian Government has offered to develop the KKS Port with a grant and work on that will start soon. We are also going to commence a ferry service between India and Sri Lanka. There is a cruise liner, the Cordelia, which calls at Hambantota, and has expressed willingness to operate to and from KKS as well. The SLPA recently invested in a terminal at KKS, which can be further developed. Several large companies in Sri Lanka have shown interest in cargo operations at KKS.

Similarly, Sri Lanka and India are keen to resume ferry services in Talaimannar. To do so, the pier has to be reconstructed. We have got Cabinet approval to float an EOI for those interested in renovating the pier. 

We are looking for a local partner to work with the SLPA to invest in and operate the Talaimannar Port. Any operator who comes in is likely to look at trade and passenger ferry operations. This is likely to trigger more regional development for the Mannar region.

It has not been practical to sustain operations at the Oluvil Port, due to continuous silting, which needs addressing. There are some parties which have expressed interest in developing the port. We are confident that the development will happen in the near future.

When does the SLPA plan to transition from a ‘regional transshipment hub’ to a maritime hub? Do we have the right policies and strategic plans aimed at reaching that target?

I think we are on course to becoming a maritime hub. We are also looking at setting up new logistics centres to support port operations. China Merchants Group, which runs CICT and Hambantota Port, signed an MoU with the SLPA to establish a large logistics centre within the port and for the planned expansion. 

We have already allocated a 13-acre plot for this. Most of the design work has been done and it will be starting next year. There is another 10-acre space near the WCT, which is being considered for the future. We are also looking at using some of the land the SLPA has through a Public-Private Partnership (PPP) to establish new logistics centres.

That said, there is some other work that needs to be done. It is something that the SLPA cannot do alone; it will require the involvement of other stakeholders and the Government. 

Sri Lanka will have to develop a national maritime policy for our country. The Ministry of Ports and Shipping has taken the first steps to draft it already and we are working on that. Hopefully within the next few years we will have one ready. We may need to seek some international expertise to complete it.

India is developing two deepwater ports. When will they come online and how will they impact Sri Lanka’s port operations? How do you plan to manage that impact?

I am sure India will want part of the growth in the shipping sector. My view is that competition is healthy. Most of our transshipment traffic is from India, so competition is inevitable and we must plan and act in a timely manner and stay on our toes.

However, I think that as a region led by India, we are all going to see a lot of growth in the future, like how it happened in China nearly 20 years ago. I think we can be to India what Hong Kong was to China. I think we can benefit from that growth. There will be enough growth to go around. 

The new Indian ports may become more complimentary than competitive to Sri Lankan ports and they may attract more international traffic to the region. However, we should not be complacent; that’s why we are looking at capacity growth. We plan to target reaching 35 million TEUs and offering better service.  

Why has Sri Lanka failed to attract key shipping lines based in Colombo or even a major salvor in Colombo? 

The regulatory process and the legal framework in place have been key issues in this regard. Currently, the legal framework says that any shipping line should have a local agent. We have not permitted any shipping line to establish its own presence here. The lines have to have a local agent. 

I think the shipping industry in Sri Lanka should be more open-minded. We should open up to allow shipping lines to establish themselves here. 

We can pitch the Colombo Port City as a good venue for major shipping lines to relocate to Colombo and have all the services – be it banking or logistics – at their fingertips and be right next to the port. I think we should look at this in the future. 

The same applies for salvors. Similar to Singapore, we should encourage and create the environment for private salvors to be stationed here.

How have the Red Sea attacks on commercial shipping by Houthi rebels impacted the operations of the Colombo Port?

They have contributed to increasing our volumes. We were geared to handle the demand and had the efficiency to cope with it. 

The Houthi attacks are an unfortunate issue that the shipping industry is facing today. However, the Red Sea and Suez Canal situation has been an opportunity for Sri Lanka. Without having to market ourselves to get more volume, we had shipping lines coming to us seeking solutions and we were able to help them. 

The entire shipping route system had been impacted and the major lines were avoiding the risk area and going around the Cape of Good Hope. We were positioned to help when the demand rose.

Previous SLPA chairpersons have stated that the SLPA has a serious corruption and over-staffing problem. How have you addressed these issues? Has there been an improvement?

The Colombo Port had upwards of 20,000 workers in the past. However, it has been reduced over the last few years. Today, the SLPA staff in Colombo is under 8,000 and we were just completing our cadre assessment. We have had discussions with the Government and we think that there will be a further reduction in numbers. In the next few years it may reduce to around 6,000. 

We do a certain amount of outsourcing when needed. However, we have not been recruiting to fill the vacancies. Over the last two years, we have not hired any excess workers. We have instead built up our efficiency.

On corruption, I am not going to say that the Port of Colombo has been made completely free of corruption. There are many agencies and stakeholders at the Colombo Port and I will leave it to you to point out where corruption occurs the most. 

Such corruption is beyond our control and must be curbed by those agencies and authorities. We only facilitate the loading and unloading of cargo. We don’t work on clearing goods or regulating their movements. 

The SLPA has been working with the Ceylon Association of Shipping Agents (CASA) on a zero-tolerance policy for corruption and I think we have made great progress in reducing corruption at the port. But there is more to be done, especially by other stakeholders. Unfortunately, to a large extent, corruption within other entities is also painted as being ours (SLPA). 

There is also a certain amount of responsibility on the part of the corporate sector and the shippers, which is often overlooked. Some of the practices they tolerated in the past posed a vulnerability for corruption. 

We have flagged the relevant agencies, the shippers, and others involved regarding these issues. We are trying to mitigate the problem. I hope we can make the Port of Colombo free of such issues soon.