MARITIME INDUSTRY
Compiled by Tamara Rebeira
SEIZING THE ENDLESS SEA
Capt. Ajith Peiris critiques the island’s existing maritime facilities
Q: In your assessment, how important is the maritime industry to Sri Lanka’s economy and trade?
A: Being an island that is heavily dependent on maritime activities, Sri Lanka plays a pivotal role in trade, the economy and travel.
Maritime encompasses more than the transportation of goods by ships; it encompasses ship owning and repairs, crew management, and other aspects including maritime law and flagging of ships.
While cargo operations are the primary focus and strength of the maritime industry, several segments haven’t received sufficient attention despite their untapped potential. They include crew manning and management, ship repairs and supplies among others.
Our proximity to India positions us well to cater to its trade requirements, which is why the Port of Colombo has become a key shipping hub in the region. Currently, we receive around US$ 500 million annually in seafarer wages and related operations – and the aim is to reach 1.5 billion dollars within the next five years.
Q: What are the main challenges and opportunities the industry faces in terms of global trade and competition?
A: In terms of trade, our economy is heavily reliant on imports while exports remain comparatively lower. However, challenges arise when one considers the competitive freight rates for the goods we import.
However, thanks to Sri Lanka’s geographical location and efficient port operations, we’ve become a popular transhipment hub for the region.
In transhipment hubs, ships arrive, yet the cargo and containers don’t enter the country – they’re transferred to other ships that transport the goods to the final destination.
There’s also the challenge of seafaring as an industry and profession. We’re still adapting to and gaining knowledge about life at sea. But since the establishment of the Ceylon Shipping Corporation in 1970, there’s been a significant shift in thinking.
In terms of ship repairs, the Colombo Dockyard is the primary facility in the island. The challenge lies in finding a berth for ship repairs as priority is typically given to cargo. Therefore, securing a dedicated area for ship repairs is vital.
When it comes to ship supplies, it’s crucial to encourage the provision of duty-free bonded items to be stocked and delivered to ships. Goods from the local market are stamped with local duty, making it challenging to compete with other countries.
As a result, ships opt for cost-effective alternatives like Singapore, Dubai and India.
There’s also room for improvement in the context of maritime law as there aren’t many firms and individuals specialising in it. Our focus therefore, must be directed at ensuring that it is taught and practised.
Q: How do you perceive the impact of recent infrastructure developments on the maritime industry – including the Colombo Port City?
A: Shipping companies should be enticed to establish regional offices in Colombo. European companies have regional offices in Singapore and Hong Kong, and Sri Lanka can tap into this market due to its competitive operating costs.
By allowing foreign transactions, dollar pegged salaries and no conversion of foreign currencies to rupees, we can create an appealing environment for large reputable companies. Awareness must be generated and individuals dealing with foreign shipping companies should be involved in promoting such an initiative to potential partners.
Efforts should be made to encourage the maritime industry to establish regional offices that serve the global community. Sri Lanka possesses a wealth of educated individuals, and we can leverage these assets to promote the island as an attractive alternative to Singapore and Hong Kong.
Q: And last but not least, how has our strategic location in the Indian Ocean contributed to the international maritime trade?
A: We’re strategically positioned close to the East and West sea lane, and all ships travelling between these regions must pass Sri Lanka’s southernmost point – Dondra Head.
Despite our strategic positioning however, we lack sheltered waters with the exception of a small part in the north.
Open seas are less conducive to carrying out maritime activities as ships require sheltered waters for anchoring and various other tasks. Sri Lanka is exposed to the southwest and northeast monsoons, resulting in rough and choppy seas. Singapore and Dubai are successful because they’re located in sheltered areas and aren’t susceptible to adverse weather.
We need facilities to attract and serve around 300 ships that pass the southern coast every day. Crew changes take place off the port in Galle where ships aren’t required to enter the port; and this reduces costs associated with port charges and the need for pilots to navigate the ships.
Having said that, we must develop facilities to anchor ships or construct a breakwater to protect the maritime industry from rough seas.
Simultaneously, unions and political thinking should evolve to focus on the bigger picture.
By engaging foreign companies, Sri Lanka can benefit from job creation opportunities as these projects represent long-term investments.
