East Container Terminal

Right of reply :

Minister of Ports and Shipping, Arjuna Ranatunga has requested a right of reply to the article on page 41 on May 22, 2016 titled 'Move to cut red tape hampering hub prospects'. We publish excerpts of his reply relevant to our report.

"Since there is a reference to a delay in the ECT project this requires a clarification. During the tenure of the last government 440 meters of ECT was developed and equipment had been ordered without following the due procurement process. Thus the quoted cost for equipment was way above the market level. As a government owned institution it was not correct to proceed with the processed procurement project. Therefore the tender was cancelled.

There was yet another reason to cancel this order and to move on to a transparent tender process to procure right equipment for ECT first phase.

The specifications of the ship to shore gantry cranes ordered were incorrect as it had not taken into account the extra air draft requirement of latest container ships. Instead the specifications followed CICT crane specifications that were finalised well before the latest generations of ultra large container carriers were designed.

New specifications and the tender documents were finalised and process to procure equipment was initiated by the Ministry and the SLPA with loan funding.

It was the decision of the government that prevented SLPA from going ahead with procurement as the government decided that SLPA should no longer depend on loans as the loans already taken for development of Hambantota port has placed it in an extremely difficult financial situation.

The government directed the ministry and the SLPA to include provision of equipment for phase 1 facilities to the ECT development project so that the private sector investor would carry out this as well.

As for the ECT Public Private Partnership project, the ministry and SLPA were proceeding to get cabinet approval to launch the RFP process when the government decided that ADB should work as the transaction advisor to SLPA and the process is now in progress and the EOI is expected to be launched within weeks from today.

The minister’s reply also said: “Firstly the new ECT is not being developed to shift the current business of JCT to the new Terminal. ECT is required as none of the container Terminals in Colombo including CICT, the latest addition to South Harbour is capable of hosting the latest ULCC container vessels due to lack of water depth and crane air draft restrictions. Whiles SAGT and JCT are unable to handle these huge ships due to lack of water depth and crane capacity the CICT cranes having only an air draft of 45 meters above the ground level too are unable to work on those large ships carrying 11 tiers of containers on deck. Specifications of equipment planned for ECT will have a 50 meter air draft above quay surface thus being able to work of those ULCC vessels with ease and high efficiency.

In fact the ECT is being developed to add capacity to existing port to meet the increasing demand. Currently even with the CICT in full operation JCT handles a 40% of Colombo’s total container through put and the demand for berths during peak time of the week is growing.

Colombo during this year is showing a year on year growth of 11% based on the statistics during the last four months.

ADB and SLPA recently hired Drewry consultants to carry out a demand forecast for ECT project which proved that JCT very much figures in the future of Colombo as a Terminal with 2.8 million TEU capacity that would keep handling the ships that do not require the type of berths and equipment supplied by current and future Terminals of South Harbour.

If JCT is to be converted to a crane building facility after so called, “transfer of all the transhipment to East Terminal” Colombo would not move an inch from its position as a leading hub holding 26th position in the world container handling port league as it’s handling capacity would remain unchanged with the loss of JCT’s capacity of 2.8 million TEU as identified by Drewry consultants in their latest report to ADB and SLPA. ECT when fully developed would add only a 2.4 million TEU capacity and without JCT’s 2.8 million TEU capacity Port of Colombo would be worse than it is today in terms of handling capacity.”