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- Location holds key to success -

Ideally placed in the Indian Ocean, Sri Lanka aims to consolidate on its function as a transshipment hub

In an enviable position at the centre of the Indian Ocean, there was a time when Colombo was the most important port between the Gulf and the Far East. Sri Lanka still operates as a major transshipment hub, which services smaller ports in India. But in recent years business has declined because of growing competition, not just from Singapore, but from ports such as Aden in Yemen and Salalah in Oman. The intention now is to restore Colombo's position as a transshipment centre, while also developing two other ports in the south, Galle and Hambantota.

At the same time the country's main airline, recently renamed SriLankan Airlines, is also setting out to capitalise on the country's location. It has been successful in modernising and expanding its operations since Emirates Airlines acquired a 40 per cent stake in 1998. SriLankan Airlines aims to make Colombo a transit point for travellers flying between Europe and Asia, as well as increasing its flights to and from India. There have already been changes at the port of Colombo.

In September 1999, the government signed a concession agreement with South Asia Gateway Terminals (SAGT), a consortium headed by John Keells Holdings, a Sri Lankan conglomerate, P&O Netherlands and P&O Nedlloyd, to redevelop and re-equip the container facilities in Queen Elizabeth Quay. SAGT has already increased productivity and improved on past performance, and it now contributes 14 per cent of the port's volume. More recently, in November Ronnie De Mel, minister of ports development, told officials that work should now be undertaken to deepen the access channel to the port so that larger vessels can use it.

A plan is also being drawn up to construct a new South Port outside the Queen Elizabeth Quay. "The construction of breakwaters, dredging and reclamation works would be undertaken by the government, while the rest of the project would be offered to the private sector," says Mr D Godage, chief engineer for planning and development at the Sri Lanka Ports Authority (SLPA). Mr De Mel says that Galle and Hambantota are the next two ports ear-marked for development. "We have still not finalised our plans about which we shall develop as an international and regional port. There's no scope for two large ports in addition to Colombo." He adds: "Even if we get a new, larger port, it may have to concentrate on things like bunkers rather than transshipment. We may have a special port that will cater to ships needing refuelling.

Business travellers can meet halfway in Sri Lanka

"On the other hand, the role of transshipment hub is not lost. Our location makes us an extremely good gateway to India, Bangladesh and even Pakistan. So we have to improve the efficiency of our port to retain our position as the main hub of the South Asian region." At SriLankan Airlines there is satisfaction over the results of partial privatisation in 1998. "Now we are standing on our own feet, and our performance as well as our new partner has contributed to a reevaluation of our status by the financial institutions," says chairman Mr SK Wickremesinghe. "As a result we have been able to purchase six aircraft under our own scheme, and we did not need to furnish guarantees."

Victor Abeysekera, SriLankan Airlines' manager of corporate communications, says: "Looking at the geographical position between Europe and Asia, Japan and South Africa, you find that we fall right in the middle. This represents nine and a half hours before you break your journey, whereas if you choose Singapore as a hub, it will probably be 14 hours." SriLankan Airlines has its eye on business travellers, he says. "If you're a person in Europe and you want to meet somebody in the Far East, you are going to spend a good part of 24 hours getting there. Anybody would rather fly nine hours and meet up in Sri Lanka, have the conference there, and basically spend one-tenth of what you would in Europe." Mr Abeysekera adds that another concept is the twinning of destinations in South Asia. "What we are doing is building links with other airport hubs," he says. By dovetailing the timetables between twin destinations scheduling has been improved.