Eighth Symposium (Presentation of Colombo : Sri Lanka Ports Authority)

Creating a sustainable port to win the future competition

I consider this as a great privilege to address the distinguished gathering here and enlighten you the challenges we are facing and how we are planning to overcome the changing challenges, sustain our position and to grow. Today, Port of Colombo (PC) face severe competition within and with other ports in the region. It has become extremely difficult to maintain our position as the “transshipment hub” and to look forward to develop the required infrastructure to handle the next generation ships.

Though the situation is such, the vision of the PC is to be ‘the number one hub port operator in the Asian region by year 2015.” For this we have a plan, strategic approach to achieve this much desired position within the course of next nine years or if we are very fortunate even before that date. Let me explain you very briefly, as the time permits, where we are today.

Our strengths, Current resources – infrastructure and facilities
The Harbour
1.Lands, buildings and operating facilities.
The Port of Colombo is located in an artificial harbour, formed by three breakwaters. ie, southwest breakwater, northeast breakwater and the northwest breakwater. The entire perimeter of the harbour area is utilized for vessel related facilities. The fully developed land areas between the waterfront and the port boundary for the most part are used for cargo handling. They also provide facilities for vessel repairs, berthing of SLPA, Customs and Navy vessels and bunkering services.

2.Cargo handling facilities
The most extensive cargo handling facilities comprise three existing container terminals which in order of size and capacity are as follows.


(a) Jaye Container Terminal ( JCT)
JCT is operated by SLPA. It is located on the eastern side of the harbour, and has two lengths of deep water quay angled to each other, comprising 4 berths, with each quay being equipped with six ships to shore container gantry cranes. (SSCC). There are also feeder berths which have two gantry cranes. The backup area, which varies between 330m and 380m in overall width, extends back to the Port perimeter road and contains the container yard operated by Rubber Tyred Gantry Cranes (RTG’s). Additionally, there is an empties yard operated by high-stacking Rail Mounted Gantry Cranes (RMG’s). The terminal is fully self-contained with its own reefer stacks, offices, workshops, amenities and substations.

(b) South Asia Gateway Terminal (SAGT)
SAGT is operated by a joint consortium of private and public partnership. The terminal has three deep water berths served by nine SSC cranes. They are backed by a strip of land 200m wide immediately behind the southwest breakwater that contains the container yard operated by RTGs. The lorry gates and waiting areas extend over a length of approximately 250m at the breakwater route. The terminal is fully self-contained, with its own reefer stacks, offices, workshops, amenities and a substation.

(c) Unity container Terminal (UCT)
UCT has two berths for feeder vessels on the south side of North Pier, which has been upgraded for container operations. There is a bulk cement berth on the north side of the recently enlarged pier. The terminal has three SSC cranes on the quay, and RTGs operating the two stacking areas on the pier and the land area adjacent to it. There is a lorry gate complex at the landward end of the terminal.

The other main cargo handling facilities are;
· A Tanker Berth at the inner face of the northwest breakwater, which is connected by submarine pipelines that pass just inside the north entrance.
· Prince Vijaya Quay (PVQ), comprising two berths inside the northeast breakwater. The inner berth is mainly used for discharging bulk cement to the silos adjacent to the UCT pier, and by Ceylon grain Elevators Ltd., for unloading animal feed to its silos located nearby; it also has a transit shed operated by SLPA. A flour mill is scheduled to be built by a private company at the outer berth.
· South Pier and North Guide Pier are two quays on each side of a narrow pier to the south of UCT. The quays are used for vehicle imports and other cargo.
· Bandaranaike Quay (BQ), a rectangular pier located at the southern end of the harbour, comprising four berths (two on each side), each backed with a transit shed. There is also a fifth berth at the end of the pier. The quays are mainly used for general cargo and military goods.

There is a new passenger / cruise berth at the southern end of SAGT.

Cargo Handling Facilities Outside the Harbour
There are a number of buoy moorings for tankers, all located outside the harbour. Three of these are in the vicinity of the harbour approaches:
· A crude oil Single Point Mooring (SPM) operated by Ceylon Petroleum Corporation (CPC), approximately 8km WNW from the main harbour entrance.
· An LPG Conventional Buoy Mooring (CBM) operated by Shell, approximately 6 km north of the harbour.
· A new SPM for oil products, operated by CPC, 2km north west of the LPG CBM.

Other Marine Facilities
The most important repair facility is Colombo Dockyard Ltd., which is located to the north of JCT. This privately operated facility has two drydocks and a number of jetties, as well as a Floating Power Plant. M/s. Colombo Dockyard Ltd., occupies about 350m of waterfront which would be very useful for port operations. But the Port is obliged to provide vessel repairs and services until such time an alternative facility could be developed.
The other repair facility in the harbour consists of a number of slipways for SLPA’s harbour craft, located to the south of the new feeder berth.

The Pilot Station is located at the end of the southwest breakwater and includes a jetty for launches. Harbour craft berth at the other remaining waterfront areas, chiefly; those located at the southern end of the northwest breakwater (for tugs), the basin between BQ and the passenger terminal.

Fuel bunkering barges are located in a small jetty between PVQ and the cement berth at UCT. Water for bunkering is supplied to barges at Kings and Prince of Wales Jetties in the southwestern basin.

Roads
The Port perimeter road runs close to the boundary, and extends along the landward perimeter between the northwest and southwest breakwaters. There is also a road to the Pilot Station along the southwest breakwater, which accessed via a security point for SAGT vehicles.

Buildings and Container Freight Stations (CFSs)
At PVQ one warehouse has been demolished. The old No.8 gate at the northern end of the port has been replaced by a new one. In the area between SAGT and BQ there are many buildings, some of which can be demolished and others relocated in a central building to suit the present and future requirements of the Port. SLPA is reviewing the position with regard to the buildings rated as being of historical or archaeological value, and the Port Commission Building which was listed by UDA as being of architectural interest.

There are a number of sheds in the Port that are designated for CFS operations. These include five at JCT, totaling 18,400sq.m in area, of which the largest (CFS 1) forms an island in the road connecting JCT with Gate 6. Outside the Port, there are two container freight stations for Full Container Load (FCL) cargo operated by Customs; one at Orugodawatta and the other close to the railway line at Modera. The CFS at Peliyagoda has sufficient capacity to cater for all Less Container Load (LCL) cargo generated at present from JCT, except dangerous cargo and other special cargo, which have to be within the Port.

Navigational Facilities
The first point of contact and also the last point of contact for any vessel entering Sri Lankan port is the port control and the Pilots. The first impression created at this point is always is a lasting one. Pilotage in Colombo is provided round the clock all year round. All the Pilots count a number of years of sea service and are all certified master mariners. Regular bridge simulator courses are followed by them to keep abrest with developments in ports.
At present we operate a fleet of very modern tugs capable of delivering up to 65 tons Bollard pull. They are all manned and operated by competent personnel. All tugs are well equipped for fire-fighting as well.

Human Resource
SLPA is a highly employee intensive organization. Our current employee strength is very close to13500. This workforce comprises those in Executives, Non Executives and Technical and Non Technical staff as well. Our human resource is the key asset for ensuring that SLPA achieves a status of excellence in port operation in the region. To achieve this position we keep on training and re training our employees in all disciplines.
Human capital is the most unpredictable resources in business. They can make or break an organization, be an asset or an ability.

With all of these available facilities and the infrastructure our capacity of container handling can be increased only up to 3.5m. teus per year. This is only 1m. teus to grow. To go beyond that mark, in the long run, say within next 3-4 years, we have to be ready to handle the next generation Mega-ships which are carrying eight to ten thousand teus. At present the harbour basin is not deeper enough to accommodate the next generation vessels. Therefore, we need to extend the existing breakwater towards mid sea and then maintain the depth of the harbour basin up to 20 metre depth to suit the vessel draught and also to build new container terminals equipped with modern cranes with greater speed and to introduce Terminal Operating Systems (TOS ). The major problem to day is to find necessary investments amounting to US $ 300m. for extension of the breakwater and additional US $ 700m. for construction of container terminals. Required investments of funds have to be drawn from the external sources. If the funding is from lending institutions, the terms have to be more favourable as return on investment is going to be very low as the construction of a breakwater is exceptionally a very long term investment.

New Port- Colombo South Harbour
In short, at the rate of natural growth container movements worldwide which is about 10% per annum and also the operation of Mega-ships on main sea routs, if we are to remain in business, we have to build a new port to cater the demand of industry in years to come. This we consider as the major challenge.
As you know, this requires a massive investment, it is about US $ 300m. for the construction of a breakwater. The proposed new Colombo South Harbour will be located west of the present southwest breakwater in an area of approximately 600 hectares with provision to construct four terminals of over 1200 m in length each to accommodate 3 berths alongside depths of 18 m and provision to deepen 23m to accommodate deeper- draft vessels of the next generation. The channel with of the harbour is to be 560m and depth of 20m, with harbour basin depth of 18m and a 600m. turning circle. The development of phase -1 of the Colombo South Harbour is to be carried out in two stages. The first stage of development involving the infrastructure with funds US $ 300 million and the stage two the other terminal facilities US $ 700 million with private sector participation.

Investments needed
In fact, we have some good news. The Asian Development Bank has indicated that it is possible to give us up to US $ 225 m. So we have to find the balance and to go ahead with construction and simultaneously negotiate with investors for construction of container terminals for profit sharing basis since we will have to service loans to be obtained from the Asian Development Bank for the construction of breakwater. You may look at this as a golden opportunity, to consider very seriously in investing in a new port to be built in Sri Lanka.

A New Approach
Before wind up, I wish to invite your attention, on the need of the hour, that we have to sustain and grow over the time, continuously and strategically, to ensure that the required level of growth, and measure the growth in terms of our set goals. In this exercise, I propose that all of us, INAP member ports should be guided by the principles of Strategic Performance Management (SPM) including the Balanced Scorecard (BSC) method of measurement developed in 1992 by Drs. Robert Kaplan of Harvard Business School and David Norton. They recognized that an exclusive focus on financial measurement presented an incomplete picture as is only backward- looking.

Therefore, I wish to further emphasis the fact that modern management needs a variety of continuously measurable indicators that would assist us to perform against all the variables forming the enterprise’s strategic plan, if we are to sustain our position and to win future competition. It is a solid foundation for an ever growing port as it helps all of us to have a common understanding of our objectives, measures to achieve those objectives, our targets in respect of four main perspectives namely, finance, customer, internal business processes and learning and growth in realizing our own vision and the strategy to be adopted by each of those ports. I am readily available to you for any further clarification, assistance or guidance on this subject right now and also on telephone and via e-mail as exchange of views would contribute to enhance the friendship and co-operation among INAP members.