Shipping company AP Moller-Maersk is keen on taking a maritime project in Sri Lanka. Senior Director, Group Relations, South Asia, AP Moller Maersk, Julian Michael Bevis who was in Colombo recently has discussed possible project ideas with the Chairman of Sri Lanka Ports Authority, Dr. Parakrama Dissanayake.
 Julian Michael Bevis |
Bevis has also updated the SLPA chairman on the trade facilitation coalition that Maersk is a part of along with five countries, the US, Canada, the UK, Germany and Australia plus a number of multinational corporations (MNCs).
In an interview with the Sunday Observer, he said Maersk is very positive about the shipping and port sector in South Asia and is looking at all the developments happening in the region.
Bevis who is based in India was in Colombo to officially receive Milan Maersk which was on its maiden voyage.
The Milan Maersk owned by Maersk Line which is one of the world’s largest boxships that has been built this year berthed at the Colombo International Container Terminal (CICT) last month.
This state-of-the-art megaship belonging to the second generation of Maersk Line’s well-known Triple-E class is deployed on the AE 1 service which is the fastest service from Colombo into major North European countries such as the UK, the Netherlands and Germany, that will also bring essential imports from China and South East Asia into the Sri Lankan market.
Bevis said ‘Maersk’s bigger ships will call on Colombo on a regular basis in the future.
Excerpts of the interview:
Q: How did your meetings with the relevant official go? Any decisions on your future investments in Sri Lanka were taken?
A: We met with the port chairman to update him on the trade facilitation coalition that Maersk is a part of along with five countries, the US, Canada, the UK , Germany and Australia plus a number of MNCs. We had a very constructive discussion with him and there are good prospects for taking a project forward in Sri Lanka with his active cooperation.
Q: Maersk has shown interest in investing in the deep-water East Container Terminal (ECT) in the new Colombo South Harbour? The government has called for bids but not proceeded with them. What is the latest position?
A: The port of Colombo needs additional capacity in the next two or three years which means that developments must be put in train soon. It is understood that the SLPA will lead on this development and we hope that progress can be made quickly as otherwise Sri Lanka may be in danger of losing the edge that it has long held.
Q: Is Maersk interested in other deepwater terminals that will be offered in the new Colombo South Harbour?
A: Maersk sees Sri Lanka and South Asia generally as an area of great potential and is confident that cargo volumes will grow commensurately. This clearly means that port capacity and attendant landslide and legislative infrastructure must keep pace if not stay ahead of this demand. Whether Maersk wishes to participate will depend on the commercial and regulatory environment around individual projects as they emerge.
Q: What about investing in other ports like Hambantota and Trincomalee? Either in container terminals or petroleum cargo?
A: As has already been mentioned Maersk sees Sri Lanka as a market of potential and therefore ports other than Colombo will in due course emerge but for the time being the focus for containers will remain on Colombo.
Q: Would Maersk be interested in LNG (Liquified Natural Gas) terminals the government has said it wants to have?
A: While Maersk’s transport and logistics division does not have LNG carrying capability we do have a world class towage and marine services company called Svitzer which is one of the largest and most professional harbour towage providers in the world. Svitzer would likely be interested in looking at LNG terminals in Sri Lanka as and when they emerge with a view to providing towage and marine services capability.
Q: What do you see are the barriers to investing in Sri Lanka? What legal or regulatory changes do you seek?
A: Maersk has already invested in Sri Lanka in terms of the terminal in Colombo where we have a share in SAGT with John Keels Holdings. We are also continually investing in logistics services by upgrading our capabilities as witness the recent maiden call of the Milan Maersk the largest vessel ever to call in Colombo. We are keen to see how our business footprint might be enlarged and this we will do in partnership with the government to facilitate trade, and possibly depending on the regulatory and commercial environment by investing in physical infrastructure. Generally we believe that the market is the best regulator and that government intervention in pricing in particular is likely in the long term to lead to market distortions.
Q: How do you assess Maersk’s investment in South Asia Gateway Terminals (SAGT), Colombo’s first private container terminal? How is the business growing? How profitable is it? How does it compare with Maersk container terminals elsewhere?
A: We are very proud of our investment in SAGT which has been a success since its inception. We enjoy a very good relationship with the other major shareholders namely John Keells and the SLPA and as and when we see opportunities to grow the business there we will look very carefully at this prospects.
Q: How has SAGT’s business been affected by the entry of Colombo International Container Terminal (CICT)?
A: SAGT provides a world class service to its customers and is but one of the triumvirate of terminals operated under the overall umbrella of the SLPA but the port cannot stand still and needs more capacity to be provided soon as otherwise the port may find that it could lose its competitive edge.
Q: How will the development of container transshipment ports affect business in Colombo?
A: Transshipment is a very competitive ephemeral business which means that it can easily move if lines see that a competitive advantage can be gained by moving elsewhere. There are a number of hubs that already exist in the Indian Ocean and which may surpass Colombo.
To these already existing facilities may be added more such ports even closer to Colombo which means that the port must ensure that it maintains the capacity, the service levels and the add on services to retain business and not lose that business to competitors actual or potential. The port of Colombo contributes significantly to the economy of Sri Lanka and has done so successfully for years. This potion has been built up over years and has been hard won. It is most important that this asset not be allowed to be overtaken by its rivals in the Indian Ocean. Make sense?