The Sunday Leader

SLPA’S Struggle To Stay Afloat

  • Inefficiencies and incompetencies

By Mandana Ismail Abeywickrema

Plagued with inefficiencies and incompetencies, the Sri Lanka Ports Authority (SLPA) has failed to reap the benefits of the ports in the country while also losing the battle in building a hub port in Colombo. A probe into the SLPA has also revealed that excluding the Colombo Port; most of the other ports in the country were running at a loss. The government’s foreign policies have also taken its toll on the SLPA’s business with India becoming less forthcoming in sending vessels carrying containers to Sri Lanka from Indian ports.
The strengthening of Sri Lanka-China relations has pushed India to develop its ports to enable the handling of all sea freight between the country’s ports without allowing them to call in Sri Lanka. Nevertheless, Sri Lanka’s relations with China and India are just the “tip of the ice berg” where the issues faced by the SLPA are concerned. Bad decision making at the SLPA while resulting in the loss of millions of rupees due to the Authority has also resulted in the wastage of funds in other areas.
The parliamentary Committee on Public Enterprises (COPE) in its probe on the SLPA has highlighted several shortcomings at the Authority. In the Committee’s last report to parliament, it has been highlighted that out of the estimated total consultancy fees of Rs. 978 million, in the construction of the Galle Port, a sum of Rs. 455.5 million had been incurred up to the end of 2008 and due to the delay in other works on construction contract, the consultancy service had been suspended temporarily at the moment. The SLPA has informed that a decision has been taken to develop the Galle port as a commercial/leisure port without damaging the preliminary plans as the Hambantota Port is being constructed as a good handling port.
The Committee has noted that the information provided with regard to each port including their location, funding agency, and funding mode i.e.: loan or grant, it was observed that the authority had to bear unbearable foreign exchange loans of which the foreign exchange rates changes rapidly and except for the Colombo Port, most of the other ports were running at a loss. Also, the present actual carder of the authority is 11,067 out of which 9700 are employed in Colombo. The SLPA has informed COPE that it was stated that the authority had not recruited staff for the Hambantota but as and when necessary, the staff is being released to Hambantota. Meanwhile, an agreement entered into between the SLPA and the South Asian Gateway Terminal (SAGT), the Authority had paid an indirect taxed amounting to Rs. 284,402,724 for a period of 11 years. It has however been informed that the Authority has no other alternative other than paying these taxes for 35 years from the year 1999, as per the agreement, although the shortcoming had been identified. Another shortcoming on the part of the SLPA is that there is a recoverable rent income of Rs. 93,403,172 as at August 31, 2011 of which Rs. 55,517,194 had been remaining for more than five years. Two cranes purchased at a cost of Rs. 444 million in the year 2008 had been idling even by June 30, 2010. However, the SLPA has said that a suitable track had been built at the moment.
In the Oluvil Nautical Training Institute, the number of students following the courses was less than 20 although a staff of 102 had been deployed for the purpose. The committee was informed that it is expected to implement some courses after the completion of construction work of the Oluvil Port. Amidst all these issues, the SLPA had engaged in several controversial construction work including Sooriyawewa Cricket stadium and the Ceremonial Hall at the Temple Trees. The COPE has been informed that the Authority had been involved with these construction works upon Cabinet decisions and for the construction of the Cricket ground Sri Lanka cricket had paid Rs. 1200 million so far and for the Ceremonial hall, Rs. 11.9 million had been reimbursed out of the total expenditure of Rs. 35 million. Be that as it may, the concerns raised by the COPE if effectively addressed could help the SLPA ride out of the choppy seas it is now experiencing. Member of COPE and UNP MP Ravi Karunanayake said that the government has failed to make Colombo a hub port and the country has now built its capacity to handle traffic, but there were no containers. He said that Sri Lanka would have greatly benefited had the proposed SAARC port concept was implemented and built upon. “Sri Lanka would have by now reached hub port status while also increasing the profits of the SLPA,” Karunanayake said. He explained that the submerging of the Hambantota Port losses in to the SLPA revenues has become an unwanted burden on the Authority. “The container arrival in the country has seen a drop since last year,” Karunanayake said.

NOT FACING ANY FINANCIAL ISSUES
SLPA Chairman
Sri Lanka Ports Authority (SLPA) Chairman Dr. P.B. Wickrema said the cumulative profits of the Authority for this year is around Rs. 3 billion so far while the revenue is approximately Rs. 36 billion.
He said that the SLPA is in the process of receiving monies that are due to it for the construction of the Sooriyawewa cricket stadium in Hambantota and a ceremonial hall at Temple Trees. He added that the Auditor General’s report has stated that the SLPA was not facing any financial issues and was performing well.
Speaking of the cost incurred by the Authority in handling weight, Dr. Wickrema observed that the cost of Rs. 1,200 incurred in handling a ton in 2008 has been reduced to Rs. 714 in 2011. Meanwhile, the revenue earned by the SLPA for handling one ton has risen from around Rs. 790 to Rs. 860. As for the traffic handled by the ports in the country, the SLPA Chairman said that contrary to various reports, the ports were handling good traffic.
However, Dr. Wickrema said the Authority was in the process of developing several key ports in the country into becoming profit-making ventures. Among those ports are Galle, Hambantota and Trincomalee.
When asked about the cost per year for the SLPA for the Hambantota Port, he noted that the highest payment following a five-year grace period would be Rs. 5.5 billion (inclusive of interest) in 2014 which would decline to around Rs. 3 billion in the next few years.

1 Comment for “SLPA’S Struggle To Stay Afloat”

  1. Reality

    Lets build another sea port at a another location in Sri Lanka, and get advice from Wimal how many ships will call at that port.

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