Tuesday , 14 August 2018
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China seeks to strengthen ports and shipping influence in Colombo

China Merchants Holding (CHM), a subsidiary of China Merchants Group, is looking to invest in a new container terminal in Sri Lanka’s Port of Colombo.

CHM is expected to be limited to a 49% stake in East Container Terminal, owing to Sri Lanka’s new joint venture regulations while the Sri Lankan Ports Authority (SLPA) will own the remaining 51%.

Ports minister, Arjuna Ranatunga, said that CHM’s competent running of Colombo South Harbour, where it owns an 85% stake, will give it a good chance to win its latest bid.

Colombo South Harbour, which handled 680,000 teu last year, has an 18 m draught, which will be accessible to East Container Terminal as well.

Ranatunga, who is a former Cricket World Cup winning captain, said that the government wants to increase its share in Colombo South Harbour and would discuss the issue with CHM.

The new administration aims to renegotiate a deal signed by the previous Sri Lankan government, which lost this year’s election, hoping that an overall increased share in the port will satisfy CHM.

This follows claims in April that China Shipping Container Lines (CSCL) has chosen Colombo as its preferred transhipment hub in the Indian subcontinent.

Sri Lanka’s Daily Mirror reported that the chairman of CSCL’s local shipping agent, the Ceyline group, Hemantha Jayanetti, said: “They have been expanding, so they are promoting Colombo as a hub for the Indian subcontinent.”

“Earlier, CSCL port calls were intermittent. They came only when there was some cargo (but) we’ll have four weekly port calls from different CSCL lines in the near future,” Jayanetti added.

According to Ceyline group director Mevan Peiris, negotiations are underway for port calls from the CSCL Mediterranean and South American lines, which would likely commence in the coming months and the European line, which is expected to start calling Colombo next year.

“A lot of Sri Lanka’s trade is with Europe, so we really need to get it and hope to get even more ships to call through Colombo,” Jayanetti said.

He further argued that although CSCL had previously tended to use Malaysia’s Port Klang as a transhipment hub, Sri Lanka’s geographical location gave it a better option, also citing that 70% of Colombo’s cargo is transhipped.