Colombo Port in stiff competition with India’s new port Vizhinjam
The growing threat of the diversion of transshipment business to India has come closer to becoming a reality as the Vizhinjam Port in Kerala is set to ensure vessels reroute with no stops in Colombo.
Sri Lanka will be a feeder port as mother vessels will in time to come call in India, Global Shippers’ Forum Chairman Sean Van Dort told The Sunday Times Business on Thursday.
The Colombo Port’s main business comes from transshipment operations to India and Bangladesh.
He noted that Sri Lanka needs to improve on its efficiency levels at the Colombo Port in order to remain competitive with others in the region.
In addition, the port also needs to adopt pricing that will ensure Colombo will remain attractive to shipping lines to carry out their operations and not move out to the new Indian port.
In this respect, the industry has always been keen on the authorities welcoming shipping lines to invest in the terminals. But continued opposition from various parties including trade unions have created a number of blocks to these investments.
“We must allow shipping lines to invest.” Mr. Van Dort said adding that the current circumstances doesn’t augur well for Colombo.
The latest terminal here, the Adani-run West Container Terminal that has become operational could shift some of the transshipment traffic to Vizhinjam in a bid to ensure that shipping lines will reroute to the Kerala port.
India’s Economic Times had quoted the Adani Ports and Special Economic Zone Managing Director Karan Adani as stating that within one year all India’s all transshipment cargo will be handled from Vizhinjam International Seaport as this strategic deep-water maritime project is “much better equipped”.
It was noted that about 75 per cent of India’s transshipment cargo is handled at ports outside India and that as a result Indian ports lose upto US$200-220 million of potential revenue each year. Colombo’s main business is transshipment and over 70 per cent of this volume is headed to India.
Commenting on these latest developments and the possibility of Colombo Port losing out on the competitive offers made available at Vizhinjam, the Sri Lanka Ports Authority (SLPA) Chairman Admiral Sirimevan Ranasinghe told The Sunday Times Business that in line with the targets it was unlikely that they could attract such a large number of traffic. He pointed out that with Colombo having achieved 7.8 million TEUs in 2024 and with just 3.5 million TEUs being targeted by 2027 at Vizhinjam it was unlikely that they could attract such a large amount of traffic.
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