Strate­gic plan to in­crease ship­ping sec­tor rev­enue

Sunday Times (Sri Lanka) - - INTERNATIONAL -

Sri Lanka is draw­ing up a strate­gic plan to make the ship­ping sec­tor a bil­lion dol­lar in­dus­try tak­ing ad­van­tage of open­ing it to global ship­ping lines, Fi­nance Min­istry sources said.

The plan aims at in­creas­ing the cash flow in this sec­tor from a cur­rent level of around US$50 mil­lion, a se­nior min­istry of­fi­cial told the Busi­ness Times.

At present global ship­ping lines are rep­re­sented as agents by Sri Lankan com­pa­nies who re­tain 60 per cent of the profit while 40 per cent is repa­tri­ated to the ship­ping line.

Cur­rently ves­sel own­ers re­mit around $800 mil­lion through the “For­eign Cur­rency

Ac­count for agents of For­eign Ship­ping/ Air­line (FCAASA)” to lo­cal agents for nec­es­sary levies and charg­ers as well as for ship­ping ser­vice fares.

The profit of the ship­ping agent is 5 per cent of this money amount­ing to around $40 mil­lion. Un­der the present 60:40 own­er­ship ar­range­ment 60 per cent of the $40 mil­lion amount­ing to $ 24 mil­lion is re­tained in the coun­try with the lo­cal agents.

The gov­ern­ment’s strate­gic plan will pro­mote com­pe­ti­tion and al­low mar­ket deter­mi­na­tion of agency prices, the of­fi­cial ex­plained adding that it could lead to re­duce ship­ping costs, im­prove ex­port com­peti- tive­ness and bring down the price of im­ports.

Ac­cord­ing to the per­for­mance re­view of the Colombo Port, 316 con­tainer ships ar­rived dur­ing the month of Septem­ber this year com­pared to 300 dur­ing the same month last year.

The new plan an­tic­i­pates that the ma­jor ship­ping lines could at­tract more ships to call at the port and ex­pand the over­all freight mar­ket and in­crease the ag­gre­gate ship­ping and al­lied in­dus­tries in Sri Lanka cre­at­ing more jobs and new busi­ness op­por­tu­ni­ties, the of­fi­cial said. Lo­cal agents are ob­ject­ing to the lib­er­al­iza­tion say­ing it would im­pact ad­versely on the sec­tor.

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