The shipping industry in the country will continue its growth as several mega port development projects were launched during the last five years.
A sum of U.S. $ 237.1 million has been invested. This figure exceeds the previous years and that the port-related investments registered an increase between U.S. $ 500 million for the third terminal to be built in the port of Colombo.
Government policy initiatives promoting growth in the maritime transport sector and one of the major policy initiatives introduced by the 2012 budget is the opening of free zones in ports of Colombo, Hambantota and Trincomalee. This will give a big boost for the added value related to logistics and could attract major FDI, Colombo Academy Chargers CEO Rohan Masakorala told Daily News Business.
The government needs to further liberalize the business environment to attract global players to enter Sri Lanka. "This should be in line with the CI investment policies to ensure large capital investment and services projects in the transport business," he said.
Investment in port operation and the construction of infrastructure through PPP promotes, where private investment tends to increase U.S. $ 440 million over two years from 2011 while the investment is expected to reach U.S. $ 2.8 billion over the period 2017 to 2020.
However, the global shipping industry has declined due to economic crisis in the EU and the U.S.. As a result, the freight market has been volatile and unstable.
The local transfer business has also seen the negative effects and the overall volume of Colombo has been stalled due to this reason and capacity deficiencies has not been studied a decade ago.
The shipping industry has also suffered from Sri Lanka due to market instability. As for the infrastructure we have seen remarkable achievements in the port sector, which will undoubtedly help the economy move forward during the next decade.
"The government has embarked on an expansion unit with capacity of major ports have accelerated projects to overcome the shortcomings," he said.
The port project south of Colombo, Sri Lanka is seen to be the only port in South Asia that have the capability of handling the largest container ships of 2013/2014. This will help eliminate the current problems facing the SLPA and ability to attract more business to Sri Lanka and improve connectivity. This is a prerequisite to increase the transshipment trade and logistics.
The Hambantota port will see the gradual increase in bulk cargo handling such projects have become operational. This facility will also help us in our supply of fuel and boat chandelling capabilities as a regional center.
"But we have to understand that global giants are now looking for alternative locations for services. Asia is an emerging market, while infrastructure projects are being upgraded, we must improve our services and trade facilitation measures for processes simple and transparent business, "he said.
"To make shipping and logistics with success, now we must work in an integrated plan for ports and airports, and other related service providers, therefore, the customs laws, the IC, the merchant marine and related laws Logistics have to be modified to attract investors, "said Masakorala.
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