Urging modernity on Sri Lanka Ports Authority, is its extraordinary MD, Mr. Ananda Premachandra. With a career spanning over four decades, the professional commenced his journey in the trade as a young Management Trainee in the Port Cargo Corporation- as the establishment was known at the time. “I believe I was destined for this role,” stated he. Preferring practical solutions to highfalutin theory, he has embarked on a mission to present SLPA as a dynamic, involved and responsive authority on an upward trajectory well into the technologically advanced future.
“All great achievements, designs and transformations that occur, based on an urge to find better solutions is followed by a determination and passion to achieve goals. Our hope is to unite as a Maritime fraternity with fresh perspectives and novel ideas that will enable positive change in achieving our ultimate goals.” – Premachandra.
During my 42 year career, I left Sri Lanka four times to pursue overseas assignments but each time I returned to Sri Lanka I reprised my role at SLPA. The first time was to Belgium to obtain my Masters Degree, the second was to seek employment in Port of Fujairah in 1991 as a Terminal Coordinator for Port of Fujairah– handling relay traffic for the Indian subcontinent but I returned in 1 ½ years. In 1999 I had a stint at Westport of Malaysia as the Technical Advisor and the Head of Container Terminals Department. I returned once again to SL as the Additional Managing Director of SLPA in year 2000 and in November 2002 I joined CMA CGM as the Regional Manager Ports and Terminals for the Asia Region based in Malaysia, India and South Korea. That was the longest overseas employment until 2015 in which I traveled extensively and widened my knowledge and expertise.
Upon my return to SL after my last foreign exertion, I was contracted as the Managing Director to SLPA but left in 2018, having completed the contractual term to join Laugfs group as the CEO of Laugfs Terminals Ltd to commission and operate the LPG transshipment hub for South Asia at the Hambantota International port which I successfully accomplished during my tenure until October last year. Ultimately I returned to SLPA at the latter half of 2020 and it looks as if I belong to this institution and there is still unfinished work for me to do here” said Mr. Premachandra who endearingly refers to SLPA as Mother.
Q, Drawing on your overseas experience what can you bring to the development of the SLPA?
The time is ripe for Sri Lanka to ride the wave of development to be on par with the rest of the world and I intent to give back the knowledge I garnered to ensure that we benefit from over 17 years of exposure to some of the most advanced ports and terminals worldwide.
It is imperative that automation driven technology is embedded into our development plans. Originally, ECT was to be similar to the previous terminals with rubber tired gantrees with diesel driven engines operated manually, yet we opted for a green terminal with semi-automated operations. The new terminal will have the ability to convert to full automation at any given time inclusive of other features such as least emissions, least light infiltration , least volume of noise filtering to the city, clean water, generation of electricity and more. The plans envisaged is to employ women to handle fifty percent of the jobs; achieving some of the SDG goals. This will be the first green terminal in south Asia region. These facets of development and sharing of the knowledge I gathered overseas are repayment of debt from me to my mother for giving birth and bringing me up as a professional. It is part of the legacy I wish to leave behind for SLPA and the country.
Q, Has SLPA already cleared approvals from environmental authorities and other related institutions?
When the South port was built, SLPA obtained environmental clearance for all terminals and the entire South port. Thus it does not necessitate additional approvals for us to proceed in our progressive development plans.
Q, Does SLPA have the funds for the development of ECT? Does SLPA plan to get any funds from other sources such as Asian Development Bank (ADB)? Are there any pledges already made?
Currently SLPA has the funds for proposed development as we anticipated this scenario in which SLPA would have to eventually shoulder the responsibility of developing ECT. After the first phase is complete we have the capacity to start earning. However, we will not completely rule out borrowing as this venture will cost approximately USD 700 million and it practically should not be launched with our own funds not because SLPA cannot afford it but we have to be tight-fisted for the sake of the country in spending foreign currency. We have further requirements for the future and we need to retain a bankable set of accounts with SLPA so that we can go ahead and borrow for the expansion of the harbor by building an extension to the South port breakwater and the new North port breakwater.
SLPA’s primary task is developing ports with the development of terminals being considered secondary. We have to encroach larger areas of the sea and enlarge our port by creating break waters and open up opportunities for port related business and terminal development. It is only in this manner that we grow in tandem with the global shipping trade and can remain competitive as a hub port. For this purpose it is necessary to retain the ability to borrow, with us, for future developments such as the WCT 2 breakwater extension which may cost USD 200-250 million and is due to start in 2023.
Q, What’s the management structure for ECT? Would the management have more authority than the current JCT? Any legal snags?
We have still not considered that area as we have a period of one and a half years before commissioning it entirely. We intend to introduce a completely independent structure to run ECT with minimum human intervention as automation is resourceful in eliminating many inefficiencies. An autonomous body with the independence to manage its business operations and offer the clients a high quality service is the way forward.
Q, would you consider a PPP?
The government has already made a decision that ECT will be owned and operated by its own entity. I am of the view that if we have the right kind of freedom we can go for a commercial partnership which will not involve capital infusion by the private sector. The terminal can be owned and managed by the government entity and it can still partner with shipping lines. The most viable option would be business deals dedicating terminals to clients who can fill them with new business and synergize the sister terminals in order to serve as “one port of Colombo” with a competing community of terminals.
Q, Development of WCT: is ADANI JKH the confirmed developer? Has the cabinet approval been granted and what are the indicative timelines for the development?
SLPA has already issued the letter of intent and initialed the BOT agreement; the primary document that commits SLPA to go into partnership with the consortium. This project requires some time to get off the ground as the development and partnership related preliminary work has to be attended to as it’s a massive development project. The cost would amount to around USD 800 million to complete a 1400m long state of the art terminal. The development timeline is three years from signing. Although the SLPA has already launched the twin tenders for full development of ECT prior to the commencement of WCT commencement it is our intent to simultaneously develop both ECT and WCT.
Q, What are the plans for the North Port? Have any plans been drawn with indicative timelines?
Currently the ADB funded technical assistance project is underway to carry out the feasibility studies for the North breakwater which once built, would extend from the mouth of the Kelani River towards the deep sea. The first phase of this mega port expansion is building of the extension of the existing southern breakwater. The WCT 2 extension of 2.5km of breakwater will facilitate not only the WCT 2 but also a LNG terminal at the tip of the breakwater at the deep end. This will fulfill the requirement of the country for deepwater LNG facilities. In this manner on the southern side a large water area beyond the current boundary of the port will be added to the existing South Harbour. The building of a new break water from Kelani mouth towards the sea port of Colombo would house the two current harbours into one basin. These twin breakwaters would be like two claws of a crab enclosing both existing harbours.
In the old harbour there is an island breakwater which is restricting the deepening of that old port. Once the North Breakwater is completed, SLPA plans to remove that and allow ECT and SAGT to extend their berths by 1000m within the new harbor This will also add a cross berth of 700 meters in length – all with the depth of 20 meters.
To build WCT 2 SLPA has to start breakwater construction by at least 2023 and a three year timeline is anticipated for construction. Development of WCT 2 behind the breakwater should take place simultaneously and be completed by 2026/2027. ECT 2 will be adding four million TEU capacity which would be sufficient for another 3-4 years at the current rate of growth.
We have to keep berth occupancy at the level of 65% or 70% so that ships would not wait for berths instead the berths would wait for ships.
In order to continue to provide this capacity growth the North breakwater project has to start between 2026 and 2030. If we delay or refrain from doing so we are bound to be in dire straits once again. When comparing the figures of the past, the terminals will be full to capacity by then. In the past whenever a new capacity was added in a matter of three years, each new terminal was swallowed up by growing demand. WCT and ECT will give a massive dose of capacity attracting major shipping lines to consider services via Colombo.
Surmise it to say, when shipping lines are invited in this manner they would like the port to grow in tandem with them in to the future. Therefore it is imperative that you share the plans for the next decade at least so that they would be comfortable in continuing with Port of Colombo as their hub. This is the current plan being implemented in phases and you could see the barges and crafts engaged by international consultants outside the Kelani River mouth carrying out the various studies and in order to design the North breakwater at this very moment. Colombo is moving in leaps and bounds to compensate the lost years.
Q, You mentioned that ECT will be ready within one and half years so does that mean that ECT and at least one terminal of WCT will be operational by then?
Exactly! Everyone agreed to the timelines. It is a captive market and there is no reason why anyone should wait without launching a terminal. Our current plan is to launch the first 600m of berth of ECT with brand new equipment by end 2022. Thereafter by 2023 the whole terminal will be completed. Once completed the terminal will be a green facility with a 1320m long berth adding a handling capacity of four million TEUs annually with automated equipment for the first time in the South Asian region. I know that the ADANI and JKH consortium would go for similar if not superior technology. It is a motivating factor and we are on the brink of breaking into the new world in terms of technology.
Q, What is SLPAs role in developing other ports; Galle, Kankasathurai and Trincomalee?
The port is shallow with a depth of 8m and the terrain is full of wrecks and rocks. It is inevitably a popular location for divers.Even the colonial masters did not consider it as a suitable location for a deep water port as they had the knowledge of terrain.
We had ambitious plans for Galle prior to the emergence of Hambanthota port. There was a plan launched in the 90s to build a new breakwater with financial assistance of Japan that envisaged enclosing the entire bay area but currently it is far from our reach due to the high cost involved. Any deepening involves rock removal which is very costly and such developments are not financially viable.
With the development of the highway and extension of railroad to Hambantota, it is no longer viable for Galle to be developed as a commercial cargo handling port.
The plan of the government and SLPA was to develop it as a tourist destination to attract yachts and passenger trade.
There are plenty of investment opportunities for the private sector in port of Galle and the RFP has already been launched to attract the private sector to invest in tourist related activities such as managing the yacht harbor and related businesses.
The Kankasanthurai harbour is currently being developed as a minor port with the financial assistance from the Indian government by way of a USD 45 million soft loan. Right now the consultancy team is carrying out studies in rehabilitation of the old breakwater, which has been damaged due to the tsunami. The primary task is rehabilitating the breakwater and building two new berths for small ships. The sea is quite shallow in the approaches to the port. Therefore it is not possible to have a deep water port in KKS. Planned depth is 11m with the inclusion of two berths suitable for conventional cargo and passenger crafts. Work is already underway and we have acquired 50 acres of land around the port. In order to secure the port we have already built a parapet wall and a gate complex enclosing 15 acres of land immediately behind the berths. The additional land of 35 acres for port related business is being acquired through the governmental institutions concerned. It will be a catalyst to develop the northern region. The population living around the port are eager for the port to be developed.
With regard to Trincomalee we have not been able to attract reasonable investment yet. Trinco is still not well connected in terms of roadways, and rail network even though the primary road is available and the rail connection is available up to China bay. The extension of the Northern highway would be of great value in facilitating development of Trinco. There are plans to extend the rail tracks to the Asraff jetty for which the land acquisition process is already under way.
You also have to take into consideration that Trinco is not in close proximity to the main sea route but adroitly positioned for the Bay of Bengal rim to serve as a port for the region. The port development master plan which was launched in 2018 includes two ambitious projects – the development of a deepwater conventional cargo terminal and an oil terminal. The latter is for the use of IOC and Petroleum Corporation to handle petroleum products in Trinco which may take shape over the years.
The other plan is to create deepwater conventional cargo berths as the Ashraff jetty has only a depth of 12m.The proposed new berths will be 15.5m to 16m deep to accommodate fertilizer and steel imports.
Q, What are some of the additional developments which would be beneficial for the industry?
Personally, I think there is a dire need to go for a port community network to link all stakeholders to one hub. We felt the urgency during the lockdown. Minor advances such as online payment systems have been implemented already and individual agencies operate own systems linking their customers. However, there is no common platform to act as a one stop gateway for ease of doing business. We clearly have a long way to go when we compare with developed ports worldwide. We yet have several documents being passed from hand to hand and people waste a lot of time and energy chasing behind various officials to get clearances. This archaic system should be replaced with a portwide network hub.
There are many single window projects being talked about but we haven’t seen much action apart from mere talks and the only windows we see at the moment are in home and office. (Tongue-in-cheek)
SLPA is launching the port community network project and ADB has agreed to fund the preliminary process. There is a team of consultants appointed by the ADB carrying out the scope and requirement study right now leading to a RFP. We do not wish to own or operate it but foresee it to be a PPP type investment. It is ideally a good opportunity for the private sector to invest in introducing a community system but we have spearheaded the preliminary work as a main stake holder since there is no process owner today to take up the task. It is a priority project we need to launch for ease of doing business within the port community.
Q, What are some of the other opportunities for the private sector to get involved in?
Within a short time there will be a RFP for developing of a logistics center in five acres of SLPA land in the Bloemendhal area. Initially the land will consist of this acreage but we are gradually relocating our quarters over there in order to expand. There is some additional land in close proximity owned by the railway department and the UDA. Altogether the area identified for this mega development is around 19 acres. Starting with our five acres, we have an extremely ambitious plan to introduce a multi-model exchange in the premises between rail and road. The location is ideal as the outer circular highway/port access elevated highway connecting to the port would give easy connectivity to traffic from this location. There is a railway line passing by which makes it an ideal location for a hub for transportation. This is our plan and the blueprint has been drawn. One part is being offered to the private sector and whoever takes it on, has the opportunity to be a partner of a mega development of 19 acres. This is launched by SLPA, with the active participation and cooperation of the UDA and the Railway Department.
We also have a medium term plan to relocate some of our very old buildings used as staff accommodation in order to clear land space in close proximity to the port for port related activities. For this purpose we have chosen a large land area owned by us in close proximity to the city which is presently idle.
Q, What are some of the other concerns you wish to highlight in the article?
We need to educate our people on the aspect of implementing PPP. If the opportunities are offered to the private sector for investment they think of it as a sale of public property. Foreign investment is seen as colonization. Many do not understand when a PP partnership operates a local company that only the dividends declared can be taken out and the rest remains. The country needs injections of capital in terms of FDI not only to strengthen the balance of trade but also to spur economic growth. The public have to be made aware of advantages in order to bust the myth and false propaganda associated with PPP ventures as they are crucial to development. We have seen very few industry professionals who venture forth through public debates and forums in order to educate the people.
However, corruption is rampant and is not relegated to the public sector alone; as in my forty two years in the industry I have learned an important fact that, “if you have a giver, there will be a taker.” Throughout the years many people have tried to buy me but I was not available in the commodity market. I know the enticement that comes along with this vice and it is rampant in every level. There is no point in trying to have a face to face confrontation as the unethical business needs to be deregulated. Thereafter, the processes need to be simplified and digitalized as much as possible. Subsequently, the online facilities need to be created to inhibit the opportunities to meet and remove the barriers. As it would limit the opportunities for all these elements to define things and have control in their hands, which gives them an opportunity to make money. We need to get rid of corruption and that’ll help us to create efficiency and reduce cost of imports exports and general trade and attract good investment as they would like to see a corruption free environment. It is pivotal for the entire trade to band together to eliminate this vice.
There’s no reason to point fingers but conduct a massive exercise to simplify processes so that human intervention can be minimized and simultaneously exercise these regulations and controls which are set in place to eliminate corruption and that will create a smooth environment for business to thrive.
Q, With reference to MOUs between terminals to accept each other’s cargo depending upon availability – is that happening effectively?
During the lockdown the terminals understood the need to work together. In one instance I recall how CICT came to a standstill as JCT was not functioning due to a covid-19 scare. Thus until JCT recommenced its operations CICT’s efficiency dropped heavily. It proved that Terminals are not independent but interdependent. Good corporation between terminals exist today and it is necessary. On a daily basis I see the traffic on emails going back and forth on transfers, responses and so on and we are working towards an inter-terminal transfer software introduction. On the surface there is a challenge posed as the terminals are competing as well and there is a limit to working together. We have our own respective clients who have confidential agreements with each terminal and that has to be respected but we have a good rapport which has been built within a framework between terminals.
Q, In a few years SAGT is due to return to SLPA? For SAGT it is an ideal opportunity and for ECT it’ll be a back-to-back terminal. What are your thoughts on this matter?
It is already a back-to-back terminal. We have created direct gate links bypassing the main road between both CICT and SAGT, thereby making it possible for the three terminals to directly transfer containers without using the main road. The myth has to be busted as the ownership of the terminal is immaterial in synergizing the arrangement between two terminals. There is a wave prevention wall which is a physical wall between the two terminals which was built to prevent the sea from attacking the land before South port came into being which stands between the two terminals and we intend remove it when feasible. Our terminal design of ECT will open up these barriers and receiving and exchanging cargo through the wall towards SAGT and vice –a versa will take place swiftly. No matter who owns and operates the terminals, it can be operated as one unit, which will be vital for future operations at the Port of Colombo.
With regard to SAGT ‘returning’ to SLPA, I have no bearing on political decisions as the current term will last only for nine years but there is a provision which allows an extension of that if required. There is a freedom for the current operators of SAGT to approach the government and the government to offer an extension. There is also freedom for SAGT to let go and say thank you and walk away. It is up to them to decide based on the trend of the world.
I am aware that SAGT has a long life and has ambitious plans to invest in new equipment. We encourage them to do so. We are looking at working together under one seamless umbrella as sister terminals with seamless borders to serve clients of port of Colombo
The world is moving forward not by taking back what is offered to the private sector. Competition is extremely healthy and we should allow it to grow. Killing competition will not achieve anything for Port of Colombo. Competition brought Colombo Port from a mediocre level to the level we see today. Let competition thrive. This is my personal view.
I recall the golden words of the first CEO of SAGT, John Buckley, famous for his tongue lashing comments and his outspoken manner. When interviewed by media with regard to the Port of Colombo, he said these words which should be etched in stone; “Colombo is the only enemy of Colombo.” Let me tell you what he meant by this. “If Colombo wishes to commit suicide it can do so by being stagnant without supplying right capacity ahead of demand; but no other port in this region can kill it.” Colombo almost did commit suicide by not developing terminals with right capacity for a period of five years and thereby showing a dismal future to our customers. Which is why we should take hold of this golden opportunity to grow ahead of demand by injecting two fully fledged terminals concurrently.
Q, Can the development of regional ports especially in India have an impact and does it compliment us?
I always believe that it will compliment. Now we have moved into the next sphere, After all the largest Indian port operator is ready to invest in Port of Colombo. Its proof that there is no threat. Why does India need another hub? There is a greater advantage for them to invest and link their ports to Colombo.
The west coast of India is the region that generates 70% of India’s total container throughput and only four percent is transshipped through Asian hubs, while 96% is carried by large ships from Ports like Mundra, Hazeera, Pipawav, JNPT and Kochin.
We never had control over the West Coast for decades. In the late 80’s we lost control when JNPT was developed, followed closely by Mundra in 2002. Large ships carrying 14000 – 15000 TEUs can go to any of these ports. Therefore the development of Vizinjam in West Coast of India will not affect us. We can also rest assured that it will not attract east coast traffic which has to bypass Hambanthota and Colombo unless they dig that canal in Palk-Strait called Sethu Samudram. It does not seem viable for a feeder ship to pass by two large ports especially Colombo that already has capacity to handle any of the largest container ships on the drawing boards and sail further North for 12 hours plus to feed a hub in the west coast of India .
The development of hubs in the East Coast of India would help us. We hope that Bangladesh would develop deep water ports so that feeder operators can engage larger feeders and cut down their long waiting times for berths. Right now we have quite a congestion in Colombo as the number of feeder sailings operating from Bangladesh is insufficient to cater to the demand and we have a backlog of boxes lying here. If Bangladesh develops deep water ports it would complement our operations as India has already developed in Vizag and Ennore. That would allow the lines to engage larger ships between hubs. They will have regional hubs in East Coast which is a welcome move.
With three tier transshipment trade developing, you have the mega hubs like Singapore, medium level hubs like Colombo and the regional level hubs in the catchment areas collecting sufficient volumes for ships carrying 5000-10000 TEUs to do the feedering. That’s how I see the development of ports in the East coast of India and Bangladesh could compliment Colombo.
Q, Are there any plans in store for cruise terminals?
In the current development plans we have ideas to convert Bandaranayake Quay to a cruise terminal as it is ideally placed and the development cost is affordable. There is a new Port Authority Head Office being built at Lotus road and it is at its initial stage due to delays in processes. It is an initiative by the Road Development Authority to compensate demolishing of over 40 of our buildings inside the port to develop the elevated highway. In return they will be building the above mentioned new Maritime center building which will also be our head office. With that the old Port Commission Building, the iconic structure at York Street (which was the old passenger terminal) will be reconverted into a newer passenger terminal which will give passengers the access to walk into the city. Both the main berths of BQ can accommodate fairly large ships when developed as passenger jetties. It’s a low cost development as it looks difficult to attract the private sector to this area since the pay back is to the country but not to the port operator. Therefore it looks as if the passenger terminal should be a government investment that could be absorbed /subsidized by the other incomes that the SLPA is making.
Q, What about the general cargo handling in POC, since BQ will be converted to passenger?
We have not given due priority to conventional cargo handling over the years but we have to remind ourselves that conventional cargo is our lifeline as it would continue to flow into this country. We need to take effective measures to facilitate it.
Deeper berths are required for handling steel billets carried by large ships requiring deep draught and also fertilizer. Presently, there are steel and fertilizer vessels drawing to an 11.5-12m draught. We handle them at ECT in the short term but we need to have alternative berths.
Colombo has a big issue with deep water berths not being available for handling of general cargo but with the development of ECT, WCT and WCT 2 the shallower part of JCT will become vacant in time to come.
UCT is redundant already and freed up for conventional cargo. JCT 3 and 4 will have a long life due to its depth and we are looking at the possibility of deepening JCT 1 and 2 further.
Our plans include the provision of deepwater berths at the port of Trincomalee for conventional cargo and the government is keen to shift at least 50% of fertilizer handling to this port gradually.
Vehicle handling is already well established in Hambanthota port which is facilitated to handle significant volumes of cargo. In addition liquid cargo is already being handled in Hambanthota. Raw material handling for Cement is already in progress there.
However the major share of demand for fertilizer is from the Eastern and Northern provinces. Therefore it is difficult to handle fertilizer in Hambanthota due to high transportation costs.
We will anyway take all possible measures to retain majority of the volume in Colombo. Thus the trade would opt for the multiple choices available based on costs and practicality.
This is our plan for conventional cargo. Part of it will take place automatically due to the enhancement development of ship size and the trade; resulting in the berths becoming redundant and part of it is due to design and there will also be a natural flow of traffic to other ports.
In conclusion, Mr. Premachandra stated, “Finally and most importantly I wish to state that I love this job and I am passionate about what I do .In spite of bouquets and brickbats aimed at me I wish to make a lasting change which will benefit our country and her people if I am allowed.”
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