Port-led regional connectivity and development options | Sunday Observer

Port-led regional connectivity and development options

Sri Lanka is often identified as an island nation rich in strategic value, which often becomes appealing internationally for the plethora of beneficial avenues it opens, to channel through and unleash the potential of its surrounding sea routes harbour.

The chain of ports in the form of natural endowments, as well as man-made establishments that have spread round the island along the coastal belt, is considered to be a national asset contributing towards boosting economic progression within the country, while also becoming a pivotal growth driver enabling the strengthening of international sea route connectivity, leading towards enhanced integrated maritime cooperation.

Being in possession of three large international ports: the Port of Colombo, the Port of Trincomalee and the Port of Hambantota, that constantly offer multiple economic growth prospects, the maritime sector is making strides and moving forward to help spur international trade and other oceanic activity.

The maritime boundaries governing nations are often indicative of the extent of power gained by each nation over the oceans and sea channels that lay in close proximity to the land surface inhabited by the nation’s population. Commonly defined as territorial waters, this allows nations to gain control and dominance over the sea space they are in possession of.

In this context ports become essential connecting points that help integrate all maritime platforms resulting in widening the partnerships between nations to eventually create synergy in their dealings.

The ties of friendship Sri Lanka shares with India have been long standing and multi-purpose driven. In the maritime domain there are abundant commonalities we share as nations, to be able to interact with each other and be associated with efforts initiated by each party.

However, as we continue to move along 2020 and beyond, it is timely that we begin to draw greater attention to the potential benefits the nations may avail from the maritime sector.

When observed from such a perspective,the availability of port- led regional connectivity and development opportunities are plentiful. Sri Lanka’s stance in this context is multifaceted and provides a unique platform for the international community to become beneficiaries of.

Being positioned in a location that offers strong connectivity channels towards drawing together many international shipping routes, can be considered a pivotal factor, which makes Sri Lanka stand out for the potential opportunities its ports could offer.

The speedy development that is taking place to improve the shipping logistics infrastructure facilities in and around its main ports, allows the expansion of existing terminals and building of new terminals with enhanced capacity that could easily handle the largest categories of vessels.

The changing nature and culture of the global shipping trade have allowed larger vessels to call on a fewer hub ports.

At a time when global shipping operations are being largely diverted towards Asia, Sri Lanka has now become a transit hub that remains tailor-made to meet the demands of the shippers and global trade partners.

The initiatives undertaken by the Government to expedite its off-shore hydrocarbon potential is also gaining attention, as a result of the development efforts being concentrated in the domain of port-led growth.

Therefore, such branches of activity which deal with sea based affairs, will certainly be benefited by the advancements that are taking place in the port based sphere of work.

As the Indian Ocean region continues to grow at a rapid pace, it is expected to contribute 22.1 per cent of the World GDP by 2025. While its economy is heavily reliant on the inflow of maritime trade revenue contributions, if manoeuvered carefully Sri Lanka may be able to offer port driven growth opportunities, to further strengthen regional ties of economic cooperation. Widely focusing on projected trade oriented growth prospects, the Sri Lanka Ports Authority (SLPA) has clearly envisaged the two-way-flow of business activity, that shall take place as a result of the capacity and efficiency enhancement strategies, which the SLPA intends to initiate as a part of the National Port Master Plan.

Colombo Port

The Port of Colombo which secured a milestone achievement of handling a total of seven million Twenty-foot Equivalent Units (TEUs)in 2019, was placed 11th in the Global Port Connectivity Index and was also considered the best port of connectivity in Asia in 2019.

Also in 2019, it was also positioned 22nd in the World Container Port rankings, which communicated to international parties, the promising opportunities it can create to help extend the reach of off-shore business activity.

The National Port Master Plan formulated for the next thirty years will certainly pave the way towards sustaining the on-going development, which the Port of Colombo presently benefits from.

Setting in tandem modernisation plans for the purpose of improving the level of efficiency improvement of the East Container Terminals (ECT 1 and 11), West Container Terminals (WCT 1 and 11), SAGT 11 and the JCT are under way, the execution of which is expected to offer a capacity of 18 million TEUs by 2035.

A Memorandum of Cooperation (MOC) has been signed by Sri Lanka with India and Japan for the purpose of developing the ECT. However, its outcome is intended to materialise by 2020.

While the full ownership of the terminal shall remain with the SLPA, as stipulated in the MOC, 51per cent of the terminal operating company will be transferred to the SLPA when formed.

Hambantota Port

The port of Hambantota has begun gaining precedence as a lucrative window of connectivity that would become instrumental in diversifying the array of port related services it could extend to many branches of economic activity.

The envisioned outflow of results of the Road and Belt Initiative launched by China however, may certainly become a value addition to further enhance the productive functioning of the Port of Hambantota, that will further benefit the sea channels which traverse Euro Asia.

Moreover, the Port of Hambantota is an all purpose investment made, that is able to cater to the requirements of many sectors in the off-shore arena.

The emerging off-shore exploration sector of Sri Lanka, is one economic unit that shall benefit greatly by the efficient performance of the Hambantota Port operations.

Trincomalee Port

Immense emphasis has also been placed on the development of the Trincomalee Port, by adding novelty to the concept of Port Development.

The anticipated transformation, which is in progress as an undertaking initiated by the SLPA, is intended to convert the Port to a Megaport Centre enabling it to function as an export hub. However, for the primary purpose of allowing increased cargo handling capability, the Port was equipped with night navigation facilities in 2019, while also introducing a new radar system for monitoring all vessel movements. The development tasks undertaken during 2019, were financed by a grant of USD 8.95 million offered by the Japan International Cooperation Agency. As the Port is considered to be the largest port of all ports located along the coastal belt of the island, the SLPA is moving forward to convert the location to an industrial hub, that could make best use of the available land and water area of the Port and further enhance the spectrum of international trade operations Sri Lanka engages in.

Galle Harbour/ North Port

As growth strategies are being concentrated in the areas of port development expansion work, quite mandatorily the SLPA is also keen on capitalising on both the Galle harbour and the North Port, which are intended to carve a different dimension of improving channels of regional connectivity that may eventually bring nations together across oceans.

While holding on to such aspirations, the Government is also assessing the possibility of allowing the Galle Harbour to emerge as a tourist attraction, which in the long run will help continue to tap its potential as a natural harbour. Feasibility studies are being conducted to learn how well the North Port Project could be implemented and made functional. It has been observed that such implementations may eventually be able to add 10 million more TEUs to the existing capacity by 2040.

Port driven services

To be able to keep up the pace and move forward firmly to grow into a regional connectivity hub, Sri Lanka has advanced the extent of port oriented services being provided, with the primary purpose of creating a friendly environment for carrying out shipping operations conveniently. Stretching the entire network of logistics, which links together the functional areas that facilitate the provision of port driven services is a mandatory factor, the SLPA and the relevant regulatory authorities are beginning to address and deal with responsibly.

The growing support extended through multi-modal transportation systems, where air connectivity channels are also becoming readily available, has now begun to play a vital part in facilitating all logistics processes tied to shipping activities. Adoption of digitised services enabling the rendering of all related services under one roof, while putting to practice the single window approach, allows service providers to integrate their systems and work collectively to meet the expectations of service recipients. While regulatory compliance has become a priority mainly in port related international engagements, policy revisions are due to be introduced to make the existing regulatory regimes applicable in these areas more investor friendly.

Forward driven approach

The way forward towards attaining desired results as a nation, often requires a collective effort to be concentrated in the relevant areas. Sri Lanka therefore, has already commenced adopting a forward driven approach. Several key areas have been identified as factors of growth and if utilised optimally, would bring in greater benefits to help transform the maritime sector as a centre of regional connectivity.

Developing the market which eventually enables the creation of business opportunities, is a mandatory branch of work that should be addressed in multiple ways. Enhancement of the industrial stream of activity, which is dependent on maritime operations that will further facilitate the ease of carrying out international business operations, is a priority which should be given substantial consideration. Service providers of the industry should be offered opportunities to merge into the system, to help open the sector for engaging in international trade operations.

The continuous infusion of a blend of best suited technology and supporting infrastructure should be practiced to upgrade the quality of services being provided and to also remain on par with changing trends of the global maritime arena.Capacity building strategies to create a talent pool to help steer the sector in viable directions should be enforced. Knowledge sharing and employment creation are fundamental components to be worked on, the outcome of which will further facilitate the process of producing professionals who may easily be able to lead the sector.

Sri Lanka however, is already moving along this path, where several educational institutions have undertaken the responsibility of accomplishing this mission.

An economic unit seldom relies on its financial strengths to remain as a going concern. Similarly, attaining success as a unit will heavily depend on how well the port and maritime sector is able to sustain its financial stability.

The inflow of funds that support the speedy and continued development of port driven operations, should therefore be an aspect to assess and implement to derive optimum economic gains. The SLPA along with other relevant institutions, has initiated efforts to seek opportunities that will provide funding enabling the initiation and sustenance of port oriented undertakings. Introducing the Private Public Partnership (PPP) concept as a stepping stone to begin moving steadily in this direction, could be a timely approach.

Supporting policies are vital to be enacted, to define the ideal framework within which the port and maritime industry should function. The need still prevails to formulate tailor-made comprehensive policies in certain identified areas, that will facilitate the process of sectoral growth to help attract a larger quantum of investment towards the sector.

The Export Development Board as a government institution vested with the responsibility of executing plans tied to the fulfillment of such purposes, is working on conceptualising the framework of off-shore engineering and maritime sector development, which in the long run could be built in to the national development plans and agenda.

A mission can only be accomplished, when plans envisaged would unfold rightly and goals envisioned would be attained in due course, that will help complete the undertaken tasks navigated towards harnessing the economic value and strengths of endowments, a country possesses. Our ports are growth propellers if manoeuvered well will certainly fuel and steer the economy along pathways which may enable the nations of the world to make best use of its sea routes. 

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