Covid-19 impact brings opportunities for govt. to develop port industry: SAGT chief
„Says East Container Terminal development must be put on “roller skates” „ Calls to push agenda of electronic clearing of cargo „Says lines looking at a loss of about US$ 23bn
The Coronavirus (COVID19) pandemic brought a series of challenges for the national economy, however with that have also come opportunities for the government to push the development of the port industry, said the chief of South Asia Gateway Terminals.
According to South Asia Gateway Terminals CEO Romesh David, the first opportunity the government is presented with is to “get cracking” on the development of the East container terminal that has been put off for many years.
“We procrastinated on that for six years while it should have been ready and operating by 2015. For about five years we did nothing, now it needs to be put on roller skates,” said David while commenting on the avenues that could be explored to recover from the COVID-19 impact in an online discussion facilitated by Advocata. Stating that demand will only follow supply, the senior industry representative stressed the need to have the supply ready for shipping lines to look at using Sri Lanka. The second opportunity that needs to be explored is on completely embracing digital platforms. David opined that the great win in the current scenario is to be able to push the agenda of electronic clearing of cargo.
“This has to be in both directions. This is an absolute priority in terms of efficiency to the exporters and importers. It would also help improve our ranking in the Ease of Doing Business,” David stressed.
Pointing out that it is the border controls and logistics that dragged the economy down, David suggested taking the fall as an opportunity to leap.
For that he asserted the need for the export, import, logistics, and international transport trade to work together with the government to operate in what has now become the new normal.
Speaking on the hit, David said the pandemic, that had brought the entire world to a standstill, is a perfect storm, and the Colombo Port was not spared despite operating in full capacity.
“…the supply shock from the closure of Chinese factories translated to a demand cut of about 20 percent. With China opening up again, the demand shock set in and has fallen off a cliff in the primary buying market,” he said.
According to David, from the lines’ perspective it is forecasted that a reduction in demand will be witnessed over the next 12 weeks.
He shared that in 1Q, up to 31 March the volumes were largely flat. March alone the volumes dropped by 5 percent, and within the first 15 days of April a 23 percent drop in volumes was recorded across the board.
David said that the lines are looking at a loss of about US$ 23 billion, which takes away earnings of eight to nine years in one year.