Fuss over Colombo Port East Container Terminal

The East Container Terminal (ECT) of the Colombo Port has been brought into attention by the politicians in the Parliament in the recent past stating that it has been sold to Japan and India. But the governing side has denied that charge. What is ECT?

The Colombo Port has been in operation for over 130 years after protecting the water area by the South West breakwater. Systematic gradual development of the Port continued over the years and particularly from 1980s on container handling facilities. The Jaye Container Terminal JCT was completed by 1997 and the South Asia Gateway Terminal SAGT came into operation from about 2000.

Incidentally Colombo Port came into prominence as a result of these later developments and the ranking of the Port rose from 139th position in 1980 to 20th in 1997 globally while 1997 container handing recorded as 1,687,184 TEUs viz. container units.

As this existing harbour water basin and the facilities such as quay wall lengths, water depth were becoming inadequate for modern mega container ships, around 1996 the idea of a new harbour basin was mooted and a feasibility study was completed in the year 2000. This proposal culminated in 2012 when a massive breakwater system having a length of 6km was completed enclosing a bigger water basin compared with 130 year old existing harbor basin and more significantly 18 m water depth compared to 15m water depth in present harbor. The Ports Authority had to bear a total cost of around US$ 400 million.

This newly formed water basin is called the Colombo South Harbour located to the west of the old harbour and it is to have three massive container terminals named East, South and West container terminals. Each terminal will have 1200 m long quay wall berth length when present day mega container ship has a length of around 400m.

First of the three terminals developed was the South terminal as CICT or Colombo International Container Terminals Ltd in operation since 2013. The Ports Authority started building the East terminal and around 35 per cent berthing length was ready by 2015. Installation of container handling cranes and other equipment that would cost around $100 million was interrupted and as a result the part completed ECT is lying idle.

Future of ECT

In such circumstances we now hear the news of development of the ECT in collaboration with Japan and India under a new Terminals Operations Company with 51 per cent of shareholding under the Ports Authority. A significant feature here is the 51 per cent shareholding to the Ports Authority when SLPA has only 15 per cent stake in both SAGT and CICT.

Speeding up of ECT operations is indeed welcome news to all in the maritime industry in the country. Everyone is aware that Colombo is reaching full capacity soon and adding capacity is crucial. The actual performance of Colombo in 2018 was 7 million TEUs and that matched the high side forecast in the Business Plan developed in 2005 for the Colombo South Harbour and that forecast required the second terminal which is the ECT to be operational by 2019. But it did not happen.

In the National Port Master Plan presented to the Ports Authority the forecast for 2024 is given as around 8 million TEUs which appeared an under estimation, whereas the South Harbour Business Plan 2005 gave a figure close to 10 million TEUs. The lower forecast appears an excuse for the delay in the ECT operation as it will take at least two more years to operate. This Port Master Plan further stated that port capacity shortage starts from 2020. Significance of Japan and India

Japan has been assisting the Colombo Port from around 1980 to expand and develop container handling facilities and the Jaye Container Terminal JCT along with other infrastructure components were completed by 1997. As stated previously Colombo rose from an insignificant domestic cargo handling port to an important container handling port and ranked 20th position globally. This elevation was due to transshipment cargo. Though the logistics industry is important and modern logistics trends have been talked now, the transshipment business will remain as the most significant factor for a longer time as seen over the past three decades and more.

Private operators came in after 1996 and contributed to increase capacity. Those in the maritime industry know that domestic base load is small and transshipment cargo volumes is made up about 75 per cent of the total cargo. The major contribution in that about 80 per cent of Colombo transshipment come from India. Statistics illustrated some years back show that Colombo receives about 40 per cent of all Indian transshipment cargo while the balance goes to Singapore, Malaysia and West Asian ports. It is hoped that the Indian partner will contribute to sustenance and gain of Indian cargo which is critical for Colombo success.

Conclusion

For a long time those in the maritime industry and others who wished the success of Colombo Port highlighted the delay in commencement of operation of ECT. Now with the news of movement towards commencement of the ECT it is essential to proceed faster as the development activities are time consuming. Supply of cranes and equipment would take about 18 months while the balance portion of structures and buildings would require two years or more. Unless the ECT operation is speeded up Colombo Port faces the danger of losing cargo volumes and global position in terms of connectivity which are not encouraging. Prompt action is therefore awaited for operationalisation of the ECT as the second deep water terminal.

(The writer is a Chartered Engineer and was Chief Engineer – Ports, Managing Director, Sri Lanka Ports Authority and Project Director, Colombo South Harbor Development Project).