Vallarpadam Port to attract large vessels

by Lalin FERNANDOPULLE

The Indian Port of Vallarpadam will pose a serious threat to the Colombo Port which faces a severe capacity crunch said Chairman/CEO - Aitken Spence Maritime and Cargo, Dr. Parakrama Dissanayake.

He was speaking on the ‘Global financial crisis and its implications on ports and shipping’ delivering the eighth P. B. Karandawela memorial lecture in Colombo recently.

He said the Vallarpadam Port will be launched by April or May this year which would attract large vessels bringing revenue to the Indian Port sector.

“The delay in completing the Colombo South Harbour Expansion Project has brought serious repercussions on the shipping industry and also to retain the hub status in the region”, he said. “The port expansion was to complete by 2005 but due to various reasons it was delayed and as a result the shipping industry lost heavily”, Dr. Dissanayake said.

The existing port and berth will not be able to accommodate next generation vessels. Ships with a capacity of over 12,600 TEUs will not be able to call on the Port of Colombo due to draft restrictions.

“The completion of the Colombo South terminal will take a minimum of three years and shipping lines will continue to make losses”, he said.

The proposed Colombo South Harbour will be located west of the present south west Breakwater in an area approximately 600 hectares. The proposed harbour will have four terminals each with 1,200m in length to accommodate deeper draft vessels.

The global shipping industry is facing the worst crisis ever as the economic recovery is not expected to take place before 2011. All shipping sectors have been hit badly by the recession and loss making will be inevitable.

Global shipping lost over US$ 11 billion during the first nine months of last year. The container shipping line market declined by around 50 per cent due to the sharp drop in Europe trade volumes. Dr. Dissanayake said Europe is a large market and a drop in trade has adverse effects on the container Cargo market. The top 10 carriers faced a 15 per cent drop in Cargo during the first nine months of 2009 compared to the corresponding period of 2008.

“A drop in lifting to USA implies a decline in vessel utilisation, a dangerous trend that will prevail up to 2011”, he said.