Sri Lanka gearing up to tap Indian market

Tuesday, 8 January 2013 00:00 - - {{hitsCtrl.values.hits}}

The Hindu: Close on the heels of Sri Lanka expanding the Colombo port in a big way, primarily to cater to the Indian market, the country is also setting up an MRO facility at an up-coming airport, again, targeting the Indian market

The Colombo port expansion project, named South Harbour, is west of the existing port of Colombo, and sprawls over 600 hectares. The plan is for having three terminals each having 1,200m length and facilities to accommodate the berths alongside. An additional 7.5 MTEU capacity will be available after completion of the third stage of the Colombo Port Expansion Project. The terminals will be operational by August 2013.

Most mother vessels, with cargo for India, call on Colombo or Salalah. As the Indian market expands, Colombo port is taking steps to tap this market. The Hambantota Port will also be used to tap the Indian market.

The only problem that could upset the calculations here is the success of the Vallarpadam cabotage experiment. In September 2012, India relaxed the cabotage law under the Merchant Shipping Act, 1958 for transshipment of export-import containers at the Vallarpadam International Container Transshipment Terminal.

A huge chunk of India’s transshipment business of more than 7.5 million TEUs is cornered by Colombo and Salalah. Transshipment takes time, and hikes costs. Shipping agents are of the view that if the liners are allowed to use their vessels to move their coastal cargo beyond three years, and if there is a disincentive to transship at foreign ports close to India, then, Vallarpadam will, in no time become the port of choice for Indian-bound cargo in mother vessels. The money thus collected could be utilised for financing port development in the region.

Sri Lanka is also setting up a Maintenance, Repair and Overhauling (MRO) facility at the upcoming Hambantota International Airport at Mattala. The Cabinet, which discussed the issue on Wednesday, decided to seek additional funding for the purpose from abroad. A release issued said that the airport project, which will become the second international airport in Sri Lanka, is nearing completion. “Both Cargo and Passenger Terminals have been expanded and facilities added to the terminal and airport infrastructure,” it said.