Port permits a big racket, should be made online

Monday, 30 March 2015 00:27 - - {{hitsCtrl.values.hits}}

Last week we saw the exporters and importers of this country being held to ransom by few organised truckers by blocking the movements into the main port of Colombo and disrupting container movements. The loss to the economy for the 24-hour shut down will never be officially calculated, but will run into millions while also disrupting the supply chain, to say the least. Free market and competition We are into business in an economy which has embraced free market and competition, and the business of ports should be transparent and the most competitive as the local exporters, manufacturers and consumers can be directly affected if the Government doesn’t ensure fair play when offering opportunities at an institution that play a vital role in the economy. Given the importance of the port sector, I have been clamouring for many years to get an independent ombudsman to be appointed to regulate the activities of the port to ensure a transparent competitive environment is created for businesses to engage in activities with the port. It is very clear that there is an organised group within and outside the port to monopolise its transport activity. Around 6,500 to 8,500 movements happen daily to and from port. This includes import, export and empty container movements, cement, flour and others.

The monopolistic environment In the past the Ports Authority security and permit division used to issue annual or monthly permits, but last year I discovered that to renew or to get a new permit, the applicant had to go to the Ministry, where even the SLPA Chairman cannot authorise a permit. I as a former Director of SLPA saw this as a joke, but realised that this was a serious issue which in my mind without any doubt was an opening created for red tape and big corruption. The then Ministry has had no reason or any discussions with the trade why such an inconvenient mechanism was introduced. Talking to the sources in the trade it was understood that on one side officials and port employees along with existing trucking organisations wanted to monopolise this business of transporting goods to and from the port. Hence working in hand in glove all have benefited in this so-called group which acts as a mafia at the cost to the exporters, importers and the consumer. Bribery has been rampant, costing some truckers as much as Rs. 200,000 per annum for renewal and for a newcomer as much as Rs. 1 million,

according to reliable sources. Some truckers were happy to pay this as it helped them to retain the monopolised environment. Under whatever circumstances, last week we saw when new permits were issued, the monopolised group did not want more competition coming in. They held the exporters and importers to ransom until the courts intervened. It is time that the exporters and importers take this matter to the Government as they are the ones who are finally paying corruption and bribery money. In a meeting with the former leadership of the Ports Authority who introduced online bill payments for exporters and importers, which was a very positive step, I suggested that permits also be made online. But it seems that the then Ministry was not keen to provide this trade facilitation and the SLPA was hence reluctant to move forward. A better way of trade facilitation is expanding automation I propose and suggest to the new regime that the container transport business to and from the port should be fully liberalised. Even a small-timer who wants to buy a lorry and who can canvass business from an importer or an exporter should have the freedom to obtain a port permit. This is an example of proper income distribution, not for a few big people to dominate. It will also enable market forces to decide the best import/export transport rates. The fact remains that the industry has not seen much or any reduction in container transport prices although diesel prices have been revised many times in recent months. The simplest way in this modern day and era is to make permits an online application platform of the SLPA through automation, so that transaction cost too would further reduce. It is only on an annual basis the said truckers should submit to SLPA the Inland Revenue licence, health certificate of the vehicle, Police clearance for driver/cleaner and any other relevant documents. To further enhance credibility and security of the vehicles, like in any other developed port, the SLPA can introduce e-tags and scanner barcodes as it is reported that in some instances unscrupulous truckers use one permit and use many trucks by switching/duplicating the number plates of the vehicles, which reduces revenue to SLPA and compromises security. I wish that the said line ministries and authorities will open their eyes and take this opportunity to introduce online port permits and stop these rackets and show good administrative governance in practice. The shipping industry must also play a positive and an active role in enhancing trade facilitation and demanding better services from port operators. (The writer is the CEO of Shippers’ Academy Colombo, an economics graduate from the Connecticut State University USA, senior consultant Ports and Aviation- SEMA, past chairman Sri Lanka shippers’ Council, former director of SLPA & immediate past secretary general of the Asian Shippers’ Council.)

Port permits a big racket, should be made online

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