1. LEVERAGING ON LOCATION: COLOMBO AS A GLOBAL HUB

2. STRATEGIC GEOGRAPHIC LOCATION
Geographic location was attractive yesterday !
close proximity to sea routes can just be one useful factor
Sea routes ? They will make them if freight is available
Location is of no use if:
Right connections to the markets are not available
Right capacity is not provided ahead of demand
Right management and systems are not provided
Right cost structure is not facilitated (port costs, bunkering and supply costs)

3. Inter port competition- the battle for survival ?
Strategic Location can be a common factor for many regional ports

4. It looks as if strategic location is where freight is collectible when ports are adequately developed

5. Winning Independence from Dependence
Regional penetration of Colombo
Winning Independence from Dependence
This market share of 12% of Indian Container throughput represents 74% of Colombo’s total TS Throughput
COLOMBO HAS TO BROAD BASE ITS MARKET – RELAY AND NEW MARKETS

6. South Port moves Colombo from regional to global hub
VLCC AND ULCC ARE GRADUALLY ENTERING SERVICES THROUGH COLOMBO
Capacity enhancement needs to precede demand

7. PORT OF COLOMBO development master plan
North Port
Port Logistic services
WCT Extension
CPEP Phase II
WCT
ECT
JCT I & II Deepening
Logistic services
SAGT
JCT IV extension
CICT
Passenger Termial I
5 YEAR PLAN
Passenger Termial II
10 YEAR PLAN
30 YEAR PLAN

8. East Container Terminal Project
EOI is closing on 31st August. RFP process to conclude by year end.
First berth to be operational by 2018 due to equipment procurement lead time -can Colombo survive that long ?
Myths about the project are published by individuals
Involvement of major shipping lines as investors would affect common user status
What is common user status ? Are Singapore Rotterdam Antwerp etc. are not common user hubs just because Lines invested in Terminals ?
River ports are not global hubs – Are Antwerp, Rotterdam, Hamburg, not global hubs ?
Handling Transhipment requires expert experience –Is it like rocket science ?
Advent of ULCC (ECT)will make SAGT and JCT redundant. (See next slide)

9. Entry of ULCC and VLCC to main trade route - Would JCT and SAGT become redundant ?
Port of Singapore
This is why PSA hasn’t closed its 40 year old Terminals to container traffic yet…
They would continue to be attractive to ships if efficiently managed

10. Inter Terminal Competition
The Good
Competition on quality of service between operators
Competition on technological advancement
The Bad
Individual goals take priority - Cannibalization is the strategy
Goal of the Port and the country takes a second priority
Utilization of Port facilities is not optimised – leads to artificial congestion
And the ugly
Price becomes a tool of competition – Shipping Lines set one terminal against the other
Overall profitability of the Port sector suffers
New investors are discouraged due to low revenue and too much price competition

11. Inter port competition
Quality of service on par with any competitor
Facilities continue to grow
Price is highly competitive
Should we drop the pants too to attract business ?

12. Hambantota
first stage is an industrial port hub that Facilitates the development of the region
Creation of a acre Industrial estates to develop cargo generation- No freight no future for a port
Bunkering hub between Singapore and Gulf-(No bunkers –No hub)
Ship building and ship repairs
Expansion capability enormous- A tribute to SLPA Planners
Next Generation Container hub ? Only the time will tell

13. The way forward
National port master plan is a priority – No more ad-hoc creations
State owned vs. private terminal operators- Port regulatory mechanism - a priority irrespective of ownership
SLPA has to be institutionally restructured to take on port development
Broad base the market – Total dependence on Sub continent is not healthy
Attract Major Lines to handle Relay- move from Hub and spoke to Relay
Right pricing of the products & services - not cheap pricing

14. Window of opportunity
Capacity optimization -a must – Port should act as one Terminal –Our competitors are monopolies
Capacity building should not be based on demand - This is a supply driven market- West Terminal should start by 2020
Passive marketing to aggressive marketing
Marine Terminals will not stabilise the Hub business without development of Logistics arms.
Capacity building should incorporate value added logistic services – Mega polis plan has identified this as a priority
Hub business is a gamble. Once in there is no return- big winners are the biggest gamblers-Need to plan the North Port
If we do not grow to meet the competition we perish
If Colombo loses Hub status country will lose the export market

15. THANK YOU