Reviving former glories
Monday, 21 May 2012 | 00:00
Colombo Port on the south west coast of Sri Lanka is a natural transhipment hub for the South Asian region
and handles 95% of Sri Lanka's international trade.
Facilities include two terminals, Jaya Container Terminal (JCT) and Queen Elizabeth Quay (QEQ). During the late 1980s and early 1990s, container traffic rose rapidly and Colombo established its position in transhipments for the Indian sub-continent due to natural advantages such as location near the East-West trunk routes and a well-protected deep water harbour.
However, the 40% transhipment market share of the 1990s reduced as increasing volumes diverted to competitive ports outside of Sri Lanka such as Singapore, Dubai, Port Klang, Salalah and Tanjung Pelepas, which provide higher productivity and faster ship turnaround times.
A lack of investment was compounded by the civil war. Now, however, Colombo Port is addressing this dramatic loss in market share with major investment, to provide the additional operating capacity and berth depth required for the latest generation of container ships.
In 2001, the Asian Development Bank provided a loan to enable the implementation of measures to improve the efficiency of the existing port, in particular JCT, and carry out preparatory work for the Colombo Port Expansion Project.
ADB's strategy was to encourage PPP in the ports sector and URS/Scott Wilson was subsequently appointed by the Sri Lankan Ports Authority to improve the efficiency of JCT and to expand the port by development of the Colombo South Harbour (CSH).
The scope was broad, including reviewing and advising on changes to port legislation and terminal productivity; doing a market study of regional and international container trade; developing a business plan and marketing strategy for transhipments; optimising the split between public and private sector investment; and undertaking an environmental impact assessment.
This led to a new Competition Act passed by the Sri Lankan Government authorising the SLPA to grant concessions for the provision of port services. This allowed the offering of concessions on a competitive basis to consortia which include private terminal operators, shipping lines and financiers to build and operate new terminals in partnership with the SLPA on a Build Operate Transfer (BOT) basis.
Eleanor Hadland, managing consultant, market sector leader - maritime for URS Infrastructure & Environment UK Ltd, says a key issue solved by the Colombo South Harbour expansion is the ability to handle the very largest container vessels.
“This provides potential economies of scale for shipping lines that can 'way port' call Colombo with South Asia cargo as part of existing Europe-Asia strings using newbuild 12,000 teu-plus vessels.
“This will likely be of considerable value in keeping vessel utilisation levels high, especially in the light of ongoing economic difficulties in Europe. In time, investments at other South Asian ports will facilitate Far East-South Asia service strings utilising ultra-large container carriers, e.g. the Keamari development in Pakistan, Mundra Port, long-term plans to develop JNPT.
“However in the short-term Colombo will continue to offer the strongest regional transhipment solution due to its strategic location and excellent feeder coverage.”
Following the successful completion of its initial contract, URS/Scott Wilson was appointed to undertake detailed design and construction supervision of the harbour infrastructure works.
The CSH design comprises a major new breakwater to the west of the existing harbour as well as a secondary smaller breakwater. The harbour will be served by a new two-way channel with a depth of 20 metres which will support three new terminals each with a quay length of 1,200 metres and a land area of 62 hectares.
It was planned that the basin would be dredged to 18 metres with provision to deepen it to 21 metres should a new generation of deep-drafted vessels come into service. There is also provision to extend the major breakwater under a future phase to provide an additional area for a fourth terminal.
Construction of the project began in 2008 and the initial phase is due for completion this year. It will expand the container handling capacity of Colombo Port by 7.2m teu.
Colombo Ports’ share of transhipment volumes is expected to increase by at least 8%, with the additional capacity enabling an increase in the port's market share from 23% in 2002 to over 30% after completion.
Source: Port Strategy
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