Colombo terminals reject Finance Ministry’s decision
By Sulochana Ramiah Mohan
Freight companies claim that all terminal operators at Colombo Port have rejected the Finance Ministry’s approval to grant two additional days with free port demurrage.
They demanded that all terminal operators should adhere to the Finance Ministry notice dated 12 May 2021, which grants much needed relief with immediate effect to reduce at least 10 to 15 per cent from the cost of living and ease for taxpayers.
Managing Director Trico International Gamini Kannangara in his letter to Minister of Ports and Shipping Rohitha Abeygunawardena, said they regret that terminal operators refused to agree, oblige orders, request’s made by the Finance Ministry.
“The Government of Sri Lanka has made a request in order to ease the economic hardship the public is facing presently due to the COVID-19 pandemic crisis. How can these terminals reject such a plea? All importers are under pressure due to the slow movement of goods, resulting in delays in clearing of imports due to lower inefficiencies all around.
If such delays will incur additional costs, it will finally end up on consumer’s shoulders with an increase in COL,” he added. He further added that the port terminal operators have totally forgotten or have failed to admit that for centuries the Port has been built and expanded by public funds and not by terminal operators’ own funds.
“Last addition was six to eight km long breakwater which has helped the Port to expand its capacity. The result was the birth of CICT or West Container Terminal 1 in 2014.
If volume reduces and terminals dry out, can we expect these private operators to pay whatever the borrowing that Government has committed to developing the Port? All operators will disappear from the backdoor if such a proposition is made,” he noted.
Kannangara further explained on compared tariff structures of local import/exports vs transshipments: All Colombo’s container terminals are charging/earning USD 140/212/263 X 2 times = 280/424/526 for every 20’/40’/45’ container import/export in/out of Sri Lanka as THC (Terminal Handling Charge’s Port tariff 2021) and enjoy 3/7 days free, on domestic import/export containers. He also noted that the Jebel Ali Port in Dubai allows 10 days free for all import containers.
Out of transshipment containers, the earning is only USD 41/62/75 X 2 times = USD 82/124/150 per 20’/40’/45’, as THC (Tariff P 08 23.01) while providing 21 days free of rent. It’s evident that THC transshipments are far cheaper than domestic imports/exports THC and the difference is over 350 to 400 per cent in comparison, while transshipments also enjoy 21 days free time against 3/7 domestic import/export containers, which is about a 700 per cent difference in the number of free days.
He said it is obvious that terminal operators are making huge profits at the taxpayers’ expense but not on transshipments. “How can these terminals boast about transshipment volume and earnings when charging such low rates and making a killing off fellow Sri Lankans by overcharging?” Further, the terminals tend to cover the cost of operation of domestic import/export containers and enjoying super profit on transshipment containers, he added.
“The public is paying the prime price as always. The public never demanded the Government to borrow and develop transshipment hubs, however, the public is called to pay in the event of a system failure”.