Galhena responds to SLPA on East Container Terminal bid

By Ravindra Galhena

At the outset, I am obliged to SLPA for taking me and my thoughts seriously enough to consider a reply necessary. But the way the reply has been drafted gives the impression the SLPA has launched a personal attack on me to see whether they can get away with the matters I have exposed – now it is SLPA (9,500 people) vs. Galhena, isn’t it? It would have been appreciated if this response was published with a name and/or title attached, thereby making it a level playing field, rather than surfacing it under the name of SLPA.

However, I do not see my main question about the postponement of opening the bid, which instigated this whole discussion, has been answered yet, unfortunately.  

My thoughts about the SLPA’s response are as follows;

1. JCT will be a feeder terminal, but SAGT 

will remain as a 

world-class facility

The SLPA’s so-called professionals are incapable of reading between the lines. I urge them to read my article again and understand the content well. I meant that JCT will be obsolete as a deep-water facility in today’s context (large ships have bigger draughts) and will get relegated to be a feeder terminal soon. 

In the reply, SLPA has indirectly admitted that JCT would be a feeder terminal and those terminals are also needed for a hub port. So, there is no difference between our opinions, but the reply sounds like SLPA does not want to admit it directly! 

Until I read this reply, I believed the SLPA understood the industry dynamics well, but I have now realised it does not. Let me take just one example; how on earth could one compare the Port of Singapore with the Port of Colombo? The Port of Singapore Authority (PSA) operates all the facilities (nine terminals on a 19 km quay length) there, but Colombo has two private operators that control more than 60% of our throughput today.

The reason for me to categorise SAGT as a “world class” terminal is the extent of the facility and its people. On top of the depth of terminals and other equipment, the facilities require good professionals to make them world class, isn’t it? It is needless to state that things should be taken on relative terms. 

See the throughput and productivity records of SLPA-controlled terminals (1.64km quay length of JCT + 590m quay length of UCT + 2,500 people) and SAGT (940m quay length + 1,200 people) between 2010 or so and 2012. If one considered the H1 2016 container throughput, SAGT has registered a 13% surge while SLPA-controlled terminals recorded a 7% DROP, compared to H1 2015. But, the port-wide growth for H1 2016 has been about 10%!

How can SLPA sustain the argument that they are on par with SAGT, in terms of productivity and throughput, while they have eternally lost out their volumes since 2014? SLPA’s baseless arguments cannot hoodwink the knowledgeable!

Of course, CICT is reaching its theoretical capacity in a couple of years. I am aware of the situation and that is why I wrote about the need of ECT last week!    

I quote from SLPA’s reply: “CICT is fast reaching its full capacity during peak period. It is a matter of time before the business volumes flow back to JCT.” So, SLPA’s strategy is to wait for the overflow? Also, SLPA wants to see this happening in the future by delaying ECT? But, in the response SLPA said, I quote: “Not that SLPA loves JCT less; but that it loves Port of Colombo more” – Do these statements go together or make any sense?

2. ECT bidding

I have categorically stated that SLPA was quite capable of handling the ECT bid on their own with my little knowledge (have I overestimated SLPA?). This is why I asked about the involvement of ADB. Please read my article again. With the great wisdom of SLPA and its professionals, they confirm the same! I also stated that the call for the EoI is a progressive step forward. But my question about the involvement of ADB is yet to be answered!

3. Experience in transhipment business, allowing river port operators and elimination of global terminal operators 

I wrote my opinion and SLPA stated theirs. I will leave it to the public to think, digest and absorb. 

I quote again from the SLPA response: “SLPA and its professionals not only understand container port industry but also have experience in it for several decades.” I have a question here. Is this the reason for the container business to fade off gradually from SLPA terminals (the world class facilities in SLPA’s opinion) while the Colombo throughput is on the rise? 

4. Experience in handling a 2.4 million TEU terminal

Sure, it is not a rocket science. Along the same lines spelt out, why didn’t SLPA allow every container terminal operator in the world to bid, If they did that, SLPA could have got even more bids – thousands! SLPA wanted more bids this time. 

5. Conflict of interest

Surely I will educate myself by watching how this tender will move further! It sounds like I will learn many things that books cannot teach me by observing the developments – maybe a few tricks too! The main difference between me and many other people is that I do know that I do not know everything. SLPA professionals sound like they know everything under the sun, except the little hole in the ship they are in!

6. Sinister/hidden hand

Although SLPA has carried out a futile personal attack on me, it has chosen not to reply the most important question – why the opening of bid (EoI) that has been postponed – despite all the lengthy answers with global examples, etcetera, it has provided to defend themselves. My doubts about the sinister/hidden hand have deepened now – could be more than one hand?  

The SLPA answer has carefully avoided some words/phrases such as ‘ADB’, ‘geopolitics’, ‘postpone’ in its reply despite the fact that they are the base for my discussion.  

My basis for life is thinking global but acting local. The most important element in business is understanding local and relevant dynamics rather than discussing what happens in the world! This requires a lot of enzymes to digest, intelligence and wisdom to contemplate, more than the facts. 

I believe that there was a need for the SLPA hierarchy, the so-called professionals, to write some reply to save their skin! The public is the best judge, however. 

Also, I would like the readers to know that I close the correspondence pertaining to the issue with this reply. Thank you.