CASA warns of losses to Colombo port on ECT delays

Colombo Port is reaching its maximum capacity and post April (2017) the arrival of mega vessels is likely to add to the problem amidst regional competition to maintain business as delays prolong the commencement of operations at the East Container Terminal (ECT), the shipping industry stated recently.

The industry has forecasted container volume throughput at the Port of Colombo for 2016 at approximately 5.6 million TEUs. The total capacity of the Port of Colombo is approximately 7.2 million TEUs. The signs of the capacity tightening are already starting to show as seen in the daily operational issues at the port of Colombo, the Ceylon Association of Ships Agents (CASA) has said in a media release.

The Sri Lanka Ports Authority (SLPA) and South Asia Gateway Terminal (SAGT) have draft limitations of less than 14.25 metres with only one deep draft terminal namely Colombo International Container Terminals (CICT) with a depth of 18 metres and capacity of 2.4 million TEUS. The CICT's berth occupancy rate is approxi- mately 65 per cent weekly and will increase with the arrival of the ultra large vessels after April 2017.

Meanwhile the CICT has reported a throughput of 2 million TEUs for the 12 months ending 31st December 2016, achieving impressive YoY growth of 28 per cent in volume.

Over the past two years, CICT (in a media release) said it has brought some of the largest vessels plying the Asia-Europe routes to Colombo.

Of these, MSC Maya at 19,224 TEU the world's largest container vessel, the MV Mogens Maersk (18,300 TEU), MSC New York (16,652 TEU), CMA CGM Marco Polo (16,020 TEU), YML YM Wondrous, Edith Maersk and EMC Thalassa Hellas (each 14,000 plus TEUs) and their sister vessels are now regular callers at CICT.

In its release, CASA explained that CICT cannot handle three 400 metre length vessels since the berth is only 1200 metres adding that daily operating cost of an Ultra Large vessel is over US$50,000 and idling these vessels for want of a berth creates significant losses to the shipping lines.

Development of regional ports with modern facilities and early bird/special discounts to attract volumes will create major competition for the Port of Colombo due to the fact that though the current berth occupancy rate at CICT is manageable, towards the weekends the berths are fully occupied, CASA stated.

Shipping lines will call at a port subject to the berth being available on a specific day of the week and if the terminals cannot provide the berth on the requested day, the lines need to look at alternative regional ports to berth their mega vessels.

Delay in the construction and operation of the ECT may result in existing bidders dropping their decision to invest in Sri Lanka and to invest in other regional ports.

This will result in container volumes shifting to regional ports along with the consortium volumes, the CASA release said.

CASA complained that three months since the closing of the bids for submitting EOI's for ECT no decision has still been taken by the Cabinet Appointed Negotiating Committee (CANC) and the Government and it is learnt that the Government is trying to introduce new conditions after the EOI bids have been closed which totally contradicts the initial conditions.

These new conditions will eliminate all or most of the bidders which defeats the transparency and good governance processes, it was stated.

The Sri Lanka Ports Authority (SLPA) and South Asia Gateway Terminal (SAGT) have draft limitations of less than 14.25 metres with only one deep draft terminal namely Colombo International Container Terminals (CICT) with a depth of 18 metres and capacity of 2.4 million TEUS.