Kerala port casts shadow over Colombo harbour’s future

“Chief Engineer Southern Port Development of the SLPA Janaka Kurukulasuriya did admit that Colombo port could be hit due to the development of ports in India. But added it was not a major worry.
“Capacity at Port of Colombo is nearly 4.5 m TEC and once the completion of the full expansion project it will be 14 m TEU.
“Our growth rate at present is 10%. We are closely monitoring all the development that takes place in India.
“It is true that we are little bit late, but not too late. Our schedule is to commence the operation of first terminal in the first quarter of 2012.”

By Wilson Gnanadass
Fresh questions are being raised as to whether Colombo harbour which has been acclaimed as one of the best transshipment hubs in the world, could continue to stake that claim with the advent of another major port in Kerala, India.
If Sri Lanka’s pride has been the port of Colombo, for its efficient and effective operation as a transshipment hub, doubts have now been cast. Soon the Colombo harbour may lose its splendor due to the emergence of other ports in the region.
It is not known how much and to what extent the Sri Lanka Ports Authority (SLPA) has taken this threat seriously. However, the SLPA, it is learnt has opted to face the challenge.

The Colombo harbour, considered to be a well equipped transshipment port, has highly specialised infrastructure facilities for handling different types of freight, and acts as a switching point for cargo carried by deep sea vessels operating on trans-continental trade routes.

The SLPA has been successful in recording significant revenue from the transshipment business and according to the latest information has handled its highest ever monthly throughput of 185,099 Twenty – Foot Equivalent Units (TEUs) last August, against its previous highest monthly throughput of 173, 583 TEUs recorded in last July. According to the SLPA it is a positive change of 11,516 TEUs.

Parallel to these standards, the port of Colombo has also been able to exceed its previous highest ever monthly throughput of 326,124 TEUs recorded in July 2008, up to 340,240 TEUs last August marking the latest highest ever monthly throughput record.

No doubt, these figures are direct indications of growth and stability of a port that has gained international recognition right throughout – an achievement, every Sri Lankan can be proud of.

Saturation point
Be that as it may, every business venture has to end at one point after reaching its saturation point, if no long term plan to expand the same venture is taken up with foresight and vision.
Going by the figures produced by the SLPA the Colombo port has handled 2,455,293 TEUs in 2005 and 3, 079, 086 TEUs in 2006 and 3,381,342 TEUs in 2007.

The capacity of both terminals (Jaya Container Terminal and the South Asian Gateway Terminal) is only 4.1 Million TEUs.
Similarly, India’s growth (which is Sri Lanka’s main catchment area) is around 15 % to 20% per annum. This would mean that by the end of 2008, if an all out effort to attract the Lankan share of the Indian volumes to be transshipped over Colombo is made, then the port of Colombo will be close to its optimum capacity.

Realising this, the SLPA has already put its act together, planning on developing another terminal.
According to SLPA sources the work is functioning smoothly and operations at the new terminal are expected to commence in the first quarter of 2012.

Hidden threat
The SLPA cannot be blind to the hidden threat posed by the fast emerging Vizhinjam port in Kerala, which is set to directly compete with the Colombo port also by the year 2012.
Wide publicity has already been given to the Vizhinjam port in the Indian newspapers and the websites.
Vizhinjam, a sleepy fishing village on the western Kerala coast of India, will soon become an important cog in the country’s transshipment business.

The Vizhinjam port project which failed to obtain approval for nearly two decades, has finally been given sanction by the central government of India, according to Indian State Ports Minister M. Vijayakumar.
The port according to the available information in different websites, will fulfill the need of providing transshipment on the Indian coast, as at present there is no existing Container Transshipment Terminal in India to cater to this need.
Annual container traffic close to four million TEUs is currently originating or destined to India through sea route with CAGR (Compound Annual Growth Rate) of 14% during the last decade.

About Vizhinjam port
Vizhinjam is an all - weather port and the international shipping line is just 10 nautical mile off its coast.
The Vizhinjam Port is clearly positioning itself to become Colombo’s direct competitor.
The Port’s official website says that, “Vizhinjam has more advantages compared to the Colombo port, and if developed can harbour even Panamax class and futuristic vessels. It also satisfies the physical and hydrographical parameters of modern seaports.”

The Port’s unique selling point is a natural depth of 24 meters which the Indian government claims is by far the best compared to other ports in the world - even those of New York, Southampton, Singapore, Dubai, Colombo, Hong Kong whose depth is only 15 meters.
The proposed Vizhinjam port, which is being marketed as a Green-field project, away from urban/city limit was originally just a fishing village and had to be developed completely from scratch.

The only claim to shipping, this village which lies 15 kms from Thiruvananthapuram and two kms South of Kovalam has, is its historic origins as the capital of Ayvel Kings of the 8th and 9th century.
The new Port, according to the available information from different websites has all the ingredients to turn out as an efficient, modern and highly productive one, and India is inviting international players with experience in developing the world’s high capacity modern ports, to submit their proposals.

The Port is also expected to attract a large share of the container transshipment traffic which is now being diverted to Colombo, Singapore and Dubai. It can also ensure the much needed economic development of India as well as open up immense job opportunities.

The proposed deepwater international container transshipment terminal at Vizhinjam is expected to bring down the total costs of movement of containers to and from foreign destinations, according to the Container Shipment Economics Study.
At present, India’s port capacity (12 major Indian ports) is a meagre 4.61 million TEUs/annum compared with China’s capacity of 50 million TEUs, almost 11 times that of India’s.

Vizhinjam Port alone will have the capacity of 4.10 million TEUs/annum. This matter has to be looked at in the light of India not giving up on developing the Sethusamurdram project. The study, carried out by IL&FS Infrastructure Development Corporation and Hauer Associates, has also found that the Sethusamudram project will promote inter-coastal movements of Indian cargo, enhancing the potential of Vizhinjam as a transshipment hub.

Indian gateway ports
On the other hand, the present Indian gateway ports do not attract a sufficient number of mainline vessels due to inadequate facilities and the distance from international shipping routes.
As of now, about 61 per cent of Indian export/import containers are transshipped through the nearby foreign ports of Colombo, Singapore and Salalah (Oman.)

This results in an additional burden of upto $200 per TEU of cargo interests with freight paid by Indian exporters being 11.4 per cent of the c.i.f (cost, insurance, freight) value of goods as against the world average of 6.1 per cent.
With Vizhimjam port draft being 24 ft it will be able to attract the post Panamax container ships.

Plight
With a capacity of four million TEUs per annum, the Vizhinjam port will have the same capacity of the Colombo Port and with a draft far exceeding Colombo’s harbour depth, the chances of Colombo harbour becoming less attractive to mainliners, is a definite possibility.

For the Colombo Port this may well mean the end of an era. The monopoly Colombo now enjoys over sea routes in this part of the world might become a thing of the past, come 2012.
Sri Lanka has held sway over this industry for centuries now, because of her strategic location and ideal conditions of Colombo harbour.

The relatively new transshipment business came easily to Sri Lanka due to Indian ports not having the depth and capacity to handle the big ships.
Therefore it has been convenient for India to ship containers on smaller vessels from her southern ports to Colombo, where it is mixed and matched to various destinations in the world.

This makes sense so long as the Colombo Port has capacity to handle the expanding transshipment business (which was about 15 per cent year on year). But here lies the catch – the Port of Colombo is coming to the end of its capacity quite soon. Sometime next year Colombo harbour might hit a dead end when the port reaches saturation point.

Notwithstanding the location of Vizhinjam in the Deep South, cargo interests in the southern, northern and western regions may find it more viable to use the port as a gateway/transshipment terminal instead of Colombo, Singapore or Salalah. This means the hinterland of the port may extend to the western and northern parts of the country.
Once the new port has been constructed, Indian exporters will not have to travel to Dubai or Singapore for transshipment of cargo. It is expected to save Rs 1000 crores in expenditure.

According to IIM Students in Bangalore, with India’s current capacity for handling cargo is nearing saturation, a new port is a necessity, and Vizhinjam can fill that void extremely well.
The students in an article to the Economic Times, India have said that US $ 150 is levied in Colombo for transshipment and US $ 130 in Dubai and Singapore for the same.
They have therefore said that India can not only garner a substantial portion of this fee, but also save a lot of money if her ships break their bulk at Indian ports.

“A single container transshipped from Colombo port to Cochin incurs an expense of US $ 1,200. If it was directly landed at Cochin it would cost only US $ 400. Eight per cent of Indian containers are transshipped at Colombo, Singapore and Dubai and Indian ships account for 60 to 70 % of Colombo’s traffic,” they have said in their article.
Considering the shipping volume for the Asian region, the total transshipment cargo is expected to increase by 80%, 70% and 200 % for Colombo, Singapore and Port Klang respectively.

The IIM students from Bangalore in their article to the Economic Times India have therefore suggested that with proper planning Vizhinjam can expect to corner a significant chunk of the shipping volumes forecast to go to Colombo, along with a part of the volumes heading for Singapore and Klang.

Fears expressed
The fast development of Vizhinjam which is sure to gobble a major portion of the earnings by the SLPA, has raised concerns among most of the feeder shipping agents.
A senior official attached to a feeder shipping agency told The Nation that if proper steps were not taken to develop the Colombo harbour rapidly, then Sri Lanka was in for trouble.

“At its current status, the Colombo port will not be able to provide berth to some of the big ships in the future. This does not mean that we have to panic when ports in India are coming up. But if there is an undue delay in the development of the Colombo port then there can be a problem,” he said.

He said when the ships planned their services, they planned 18 months ahead of their services. He added that if Colombo was not prepared with a product plan, then these ships can easily look elsewhere.
He said the Colombo port has commenced the breakwater project already and added the development of the terminal can take place only ten months after the commencement of the breakwater project.

The top official said that normally the target time frame to complete a terminal was around three years, and added if the work was not completed in the Colombo port by 2012, then larger ships will be calling elsewhere, and the bulk of the transshipment volume could thus get diverted.

Janaka Kurukulusuriya, Chief Engineer Southern Port Developments

The capacity of the first terminal is 2.4 m TEU.
Until such time we have planned to introduce six quayside gantry cranes, 30 RTGs, 53 yard tractors & trailers and state of art Terminal management system to enhance the capacity to fill up the gap till 2012”.
He further said, “The interest shown by the key players in transshipment business in south container terminal of CPEP shows the demand for Colombo. It is true that we won’t be able to capture the entire business in the Indian subcontinent, but we are quite confident that we can attract our planned share without difficulty.”

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Construction of the Colombo Breakwater

The creation of an artificial harbour to increase the shipping capacity of Ceylon was first suggested by the Earl of Carnarvon in 1866.
At this time the favoured location was Galle at the extreme south of the island. But in 1870 the Governor, Sir Hercules Robinson, reported in favour of Colombo (whose commercial status was rapidly growing as a result both of the completion of the Suez Canal and of the Colombo-Kandy Railway) and Robert Townsend, the engineer responsible for Plymouth Breakwater, was sent out to make a feasibility study.

He too was impressed by Colombo’s natural advantages over Galle, and advised the construction of a breakwater across the harbour mouth. In 1872 the great harbour engineer Sir John Coode drew up plans for a breakwater running north from Customs House Point at the southern entrance and enclosing 500 acres of sheltered moorings.
This plan was accepted in 1873, with land reclamation for a coal depot and the dredging of shallow portions of the harbour also included in the project.

John Kyle was appointed Resident Executive Engineer and arrived in May 1873 to organise such necessary preliminaries as the opening of a quarry at Mahara (11 miles from Colombo), the formation of a blockyard at Galle Buck near the works, and the construction of a railway to transport stone from one site to the other.

The main body of engineering staff arrived in Ceylon in June 1874. The blockyard site was levelled, workshops and cranes installed, and in October the first trainload of rubble was delivered to Colombo. Three hundred convicts were used for loading the trains and over the period of construction nothing less than 100 tons per day (with a record of 600 tons) were shifted.

By December 1882 the commercial advantages of a sheltered anchorage were becoming evident, and in the June of that year the P and O Royal Mail steamships abandoned their base at Galle in favour of Colombo. Between 1883 and 1889 the value of shipping passing through Colombo increased by 60% and steady growth continued throughout the century.

The breakwater, 4212 feet long, was completed in April 1885 at a cost of £705,207. In 1891, Sir John Coode was asked to design a further breakwater, but his death in 1892 prevented him working on the project.
The work was therefore entrusted to Sir William Matthews who erected two further breakwaters, at the North-East and North-West corners of the harbour, so that by the turn of the century Colombo was able to provide 640 acres of enclosed anchorage, impervious to the effects of either the SW or NE monsoons.

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HISTORY

The city of Colombo derives its name from the Port of Kolomtota (Colombo harbour), which dates back to the Sinhalese Kotte kingdom of the 14th Century.
Kolomtota was the port first used by merchants from China and the Far East, India and Persia, who came to trade in the island’s famous spices.

In 1505 however, 443 years of foreign occupation began in Sri Lanka, when the Portuguese fleet sailed into Colombo’s harbour. After more than a century and a half, the Dutch followed and occupied the country from 1656 to 1796. Then came the British, ruling the region as a colony until a few years after World War II.

It was during the latter part of British rule, that the Port of Colombo was upgraded and converted to a sheltered harbour. After independence was granted in 1948 the Port was expanded with the construction of the Queen Elizabeth Quay, together with the completion of 16 alongside berths, transit sheds, and warehouses. The 1980’s saw the Port undergo rapid modernisation with the installation of Cranes, Gantries and other staples of a contemporary container terminal. This progress was to continue in to the 90’s with deepening the access channel and improving throughput to record levels. To this day, the Port of Colombo is rated as one of the top 35 ports in the world.

Current facilities
Capacity - 4.1 Million TEU’s

07 Container Berths

04 Feeder Berths

15M Dredged Depth

26 Quay Cranes, which include 12 Super Post Panamax Cranes

75 Rubber Tyred Gantries and 04 Rall Mounted Gantries

260 Terminal Tractors and Trailers
Development plans

A new South Harbour adjacent to the Port of Colombo has been planned in order to meet the increasing need for greater capacity. A feasibility study has already been completed and handed over to the Sri Lankan Government for this project, the 1st stage of which is due to commence within the next two years and be completed within a period of five years.
This facility which is designed for 12 deep draught berths on completion, will accommodate the latest generation of container vessels as well as those which will enter service in the near future.
The new South Harbor will be able to comfortably meet the projected demands placed on the Port of Colombo as the premier hub seaport in the region.

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Comparison of sizes (wikipedia)

Class Panamax Panamax II
Length 1050 ft (320.04 m) 1400 ft (426.72 m)
Width 110 ft (33.53 m) 180 ft (54.86 m)
Draft 41 ft (12.50 m) 60 ft (18.29 m)
TEU 5000 12000

(This is an internet researched story but counter checked with local authority. Much of the research material has been drawn from website sources).

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