The Sunday Leader

Terrorism Insurance

Government of Sri Lanka (G.o.S.L.) and the state owned Sri Lanka Ports Authority (S.L.P.A.) have to share the blame for the continuation of the war risk or terrorism insurance surcharge that vessels calling over at the Colombo Port have to pay insurers, though the war was over seven months ago.
They are to be faulted because still the perception among insurance underwriters persist that Sri Lanka is not a safe destination to travel or to call over, hence the reason for the continuation of this surcharge.
Last week, an article on these pages highlighted the negative effects of this cost in a more tangible manner, where it reported that a representative of a luxury cruise liner had told reporters that one of the challenges they were faced with in calling over at Colombo was that for each visit they made, they were liable to pay a war risk insurance premium of Euros 10,000 to insurers.
Euros 10,000 is a hefty sum of money by any long chalk. But still this luxury liner plans to make weekly visits to Colombo. And despite terrorism insurance charges, Colombo is yet a popular transshipment hub for cargo to and from the Indian Sub Continent.
But in the broader picture, such charges may dissuade other lines, whether they be operators of cruise or transshipment liners, to call in on Colombo. That may be the untold story, of the hidden loss to the economy, because of those lost shipping calls, due to the war insurance tag and the additional charges that go with it.
And worse still, if current liners stop calling over at Colombo because of the persistence of such surcharges, that would affect both the country’s tourism and transshipment businesses, causing a crisis to the country’s already flagging economy.
It has been reported that a local delegation, which also included the S.L.P.A. Chairman had gone to London recently, in order to get this insurance premium waived.
But those are things that G.o.S.L./S.L.P.A. should have had done immediately after the war end, and lobbied for then, and not seven months later.
As it is, the cost to the economy because of the delay in trying to get the war risk surcharge discontinued may be enormous due to the lost income to the country as a result of vessels seeking after cheaper destinations, whether they be for transshipment purposes or cruise line tours or for ship bunkering.
And in the big picture, such charges also impinge on Colombo’s efforts to promote Sri Lanka as a place of investment for any industry sector, not least as a shipping hub or a tourist destination, as the implication of a prevalence of a war risk insurance charge is doubled edged, i.e. that Sri Lanka is not yet terrorist free and thus being subject to a war risk insurance premium that vessels calling in at Colombo will have to cough up this additional expense to insurers and secondly, other vessels, investors and tourists, because of the security risk perception that is attached to such a tag, will simply avoid Colombo.
The message also conveyed by such a surcharge is that Sri Lanka is still an unsafe destination to travel or to do business with. Such
impressions, if translated into tangibles, will no doubt hurt the local economy, if it is not already being affected by it.
No tourists visiting the island means that hotels will be empty, while no investments forthcoming will hurt job creation.
All those factors will impinge on economic growth.
As such G.o.S.L. and its agents, together with the President, have to lead the way, to convey to the rest of the world, effectively and clearly, that Sri Lanka is now terrorist free and that it’s a safe investment and tourist destination, and thus place pressure on re-insurers to get this negative tag on the country removed.
The confidence that a nation conveys to the rest of the world that it’s a secure place for its citizens and for its visitors to live in and to do business with, is the best advertisement that it can give, that such a country is indeed a safe  and peaceful place.
And what better way to convey this message, other than by dismantling barriers, removing roadblocks, opening up the roads that have been closed for so long because of this threat perception and doing away with the state of emergency that has engulfed the country for several years.
Such actions would also help the economy to take-off, despite the vicissitudes of a global recession.
Furthermore, it would assist in strengthening transparency in Government and in the Executive.
Accountability by the Government and of the Executive is the key to prosperity of Sri Lanka and of its people.
And from a political perspective what better time to do such things other than now, this election season, which would also be a vote catching ploy.
On the other hand, indifference on the part of G.o.S.L. over this issue in many ways, may end up being good fodder for the opposition against the Government and the Executive during this polls period.

2 Comments for “Terrorism Insurance”

  1. Sie.Kathieravealu

    “Furthermore, it would assist in strengthening transparency in Government and in the Executive.
    Accountability by the Government and of the Executive is the key to prosperity of Sri Lanka and of its people.”

    The above are the requirements to make this country “A Paradise Isle”
    As pointed out, the opposition can make use of this situation for their election propaganda and the government is in a position to not allow it.

    Will the GoSl take swift action in the interest of the country and in its own interest? It is left to the incumbent Executive President, who is seeking re-election, to decide.

  2. Sie.Kathieravealu

    Corruption is a stubborn infection which reinforces poverty and prevents recovery. Vigilance, transparency, accountability and good governance are the antidotes.

    But while corruption is not easy to root-out, it thrives least where accountability and good governance are strongest.

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