Solutions to improve productivity in Colombo Port highlighted

by Surekha Galagoda

The Colombo Port needs an urgent expansion program but there are serious doubts whether the first phase of the south harbour project will be completed by 2011.

Therefore, the only solution is to increase capacity and productivity in the interim period, said Maersk Lanka Managing Director Eric Maard addressing a seminar on the theme "Colombo as a Logistics Hub."

Among the solutions suggested by him are to increase productivity and capacity, introducing a yard management system at the JCT, introduction of fixed berthing windows, upgrading and maintenance of shore handling equipment, opening south entrance to traffic and maintaining skilled labour and training. He said that 300,000 boxes of cargo have moved away annually from Colombo but the country still benefits from the lowest cost and the fastest transit times in the region.

Maard said that the Colombo Port is strategically placed even though it is becoming less important and its position is being challenged by India and the Middle East. Earlier, Colombo was a hub for Bangladesh and Pakistan; now its markets are South east Asia and Bangladesh.

India is accelerating the transport and logistics sector realising the contribution it can make to the country's economy. India has reviewed the costs and is attracting FDI to set up regional headquarters for shipping lines. With India developing its ports there is a need to develop the Colombo Port provided the costs are competitive. Therefore, leverage on the strong potential of the physical cum virtual hub, said Maard.

He said that the logistics sector is projected to grow to $300 bln with a 10% growth. It also helps to create jobs and reduce poverty.

ADB Consultant, Anthony Bayley said that in the BIMSTEC region only Thailand is developing the logistics industry and it has the best infrastructure. India is developing slowly. The main problem is the lack of demand for drivers in the domestic sector. All Asian highways should be upgraded to class two, he said.

Bayley said that the expertise in logistics is with international expertise. Therefore it is best that the restrictions on FDI in this sector are relaxed, third party customs and logistics brokers should be encouraged, simplify customs procedures in line with the Kyoto Convention and developing a simplified system to promote value addition.

Bayley said that Colombo as a regional port is important for the whole region. Therefore, we need to coordinate the strategy between ports, airports, ICT and logistics.

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