Move to cut red tape hampering hub prospects

Growth in Sri Lanka’s ports and shipping industry is being hampered by delays in decision-making and negative policy directions. But the government is now trying to bring a solution by cutting through bureaucracy and working at the Cabinet level to make this country realise its potential as a hub in the Indian Ocean, a senior government official said.

Central Bank Governor Arjuna Mahendran said the attitude of the state sector is also not ‘investor-friendly’, particularly in this sector. The state has not allowed the private sector to take advantage of the Colombo and Hambantota ports and bring business to Sri Lanka.

The Colombo Port, although it is naturally located in a strategic position, has not been a successful business model yet, Governor Mahendran told a forum organised by the Shippers’ Academy Colombo on Tuesday.

“It had the potential to grow naturally. Unfortunately after the end of the war when we had a great opportunity to grow Colombo as a huge trading metropolis, we diverted resources into Hambantota at a time the country did not have the capital to run the Colombo and Hambantota Ports simultaneously and market them effectively. We have made a success of neither,” he said. The Governor said at least five operators from Singapore were turned down when they proposed to start bunkering business in Hambantota. “Bunkering can easily be done by the private sector; however, the authorities did not approve the licences for them,” he said.

Meanwhile, Japan’s Mitsui Corporation also made a proposal to build gantry cranes by taking over the Jaya Container Terminal (JCT) in Colombo last year. JCT’s business was to be transferred to the new deep-water East Container Terminal being built by the Sri Lanka Ports Authority in the new Colombo South Harbour.

“One-year has gone - a decision has not been taken yet,” Mahendran said.

Mitsui’s entry would have brought a huge difference to the Colombo Port. “In fact Mitsui proposed to move their whole plant from Japan to Colombo – because all the fastest moving ports in the world are in the Indian Ocean. For a company such as Mitsui it is a huge ‘business-strategy’ and for Sri Lanka, a great opportunity.”

But he pointed out bids to complete the East Container Terminal are yet to be called.

“We have to bid out the East Terminal and move all the transshipment from the Jaya Terminal to the East Terminal. One year has passed, nothing has happened. The country cannot move forward with this kind of attitude,” he said.

That’s why the government has decided set up the Agency for Development to fast track all extant governmental approvals cutting through bureaucracy and working at the Cabinet level.

The agency will ensure that all projects are fast tracked and will cut down the present waiting time from 180 days (for BOI/EDB approvals) to a great extent.