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12 Apr

Sri Lanka has enough cargo to service her own shipping industry

Sri Lanka has enough cargo to service her own shipping industry

Today we don’t have a shipping industry in this country. There isn’t a single locally owned ship to call our own," observes M.P. Gomis, a consultant in local and international shipping. In an interview with the Sunday Island, Gomis points out that the state support is imperative to revive the almost non-existent shipping industry here.

by Randima Attygalle

Q) Could you share your professional background in shipping?

A: I’m a qualified marine engineer and from 1975 I have been working from GP (general purpose) rank up to chief engineer on board general cargo vessels, tankers and bulk carriers. In 1987 I joined the Ceylon Fisheries Corporation as a managing partner and a consultant to its Marine and Mechanical Division. I constructed a 100 ton lifting capacity slipway using all local materials enabling repairs to fishing trawlers which belonged to the Ceylon Shipping Corporation (CSC), Ministry of Fisheries and numerous other private fisheries companies. Having worked there for three years, I joined Mercantile Shipping in 1989 as an Assistant Technical Superintendent and ended up as Director, Technical, managing about 13 ships. All coasters were under me and during the war, all the cargo supplied to the conflict areas were transported by Mercantile Shipping. We also assisted ICRC to transport sick people from the north to the south. .

I was also a member of the Ship Owners’ Association and was a consultant to one of the biggest shipping companies, Windsor Line in Singapore and Excel Shipping in Dubai. In 2001 I started my own shipping firm with two of my ship owning friends. Our company, Pearl Cruise Line, was the first to operate a Sri Lankan passenger ferry which we purchased from Germany and chartered to the SL Navy to transport troops from Jaffna to Trincomalee. It was in service for nearly two and a half years.

Pearl Cruise also became the first Sri Lankan company in 2006 to have procured the vessel Ocean Venture from Canada. I operated three big vessels including this for Windsor Line

The two vessels, Nimalawa and Seruwila were procured from an Egyptian ship owner and a local company respectively. Nimalawa became historic as it was attacked by the Sea Tigers in 2008 at Point Pedro during her charter to CGES (Commissioner General of Essential Service). At that time, during the height of war, she was carrying cargo (4,500 tons of food ) to Jaffna. Our attempt to tow the vessel to Trincomalee failed as none of the local or foreign towing companies were willing to come to a war-torn area.

I did not get any support from the government to tow the vessel and after the ship was repaired by my staff, when I sought clearance to sail from Point Pedro, the Navy demanded 23 million rupees as salvage cost. None of the government authorities/officials helped me in that predicament and whilst I was negotiating, the vessel ran aground due to a cyclone. The saga ended with a court case to claim insurance and paying the Navy Rs. 17 million. This is how the Government, especially with officers with no patriotic feelings, treated a local shipping company which was trying to come up.

Q: Can you compare the local shipping industry then and now?

A: The bitter truth is today there is no shipping industry in this country to talk about. There isn’t a single locally owned ship except one owned by Tokyo Cement handling their own cargo.

In 1972 during Mrs. Bandaranaike’s regime, CSC and Singapore Neptune Oriental Line (NOL) bought one ship each. They were Lanka Rani and Neptune Garnet of NOL. Gradually the fleet of CSC increased to 11 ships.

During the late Mr. Lalith Athulathmudali’s time as the Minister of Ports and Shipping, World Bank loans were obtained to build four ships which were out sourced to Argentina where the particular yard did not have the required expertise to build cargo/container vessels. In my opinion these ships could have been easily built by Colombo Dockyard. These vessels were named as Siri, Srimani, Srimathi and Sridevi and started running as a liner carrier between Colombo and Japan with 50 to 60 containers. However they couldn’t operate the vessels economically and all four ships were sold for a paltry sum. This was the beginning of the collapse of the shipping industry in the country. Subsequently the same fate fell upon the rest of the ships the country owned.

Then in 1983/1984 the Japanese government gave us two ships- Lanka Mahapola and Lanka Muditha. I later I acquired Lanka Muditha on bareboat charter as the Japanese Government didn’t grant permission to the CSC to sell the vessel outright.

In the mid 1990s, a few shipping companies operated in SL including Mercantile Shipping, Goodwill Shipping, Vallibel Lanka Shipping, Master Divers Shipping and Liverpool Shipping. They were mostly coastal ships but after the war all the shipping companies have faded away. Hayleys also owned a few ships plying in international waters but they are no longer ship owners.

Q) What is the way forward in reviving our shipping industry?

A: We need to get to the grass root level of the industry. The urgent need of the hour is to buy or bare board two to three vessels for our own requirements. Today there are ships chartered by CSC for government requirements. Eg. to transport coal to Norochcholai power plant. The requirement is 1.2 million tons per year and it is given to a foreign company and CSC is getting US$ 1 per ton commission. Instead of engaging in brokering work, the CSC as the professional shipping body of the country, it should have bought ships to cater at least to our current requirement, not forgetting the potential shipping requirements in petroleum, fertilizer and steel industries. The large amount of money spent on chartering foreign ships could have easily been saved to build up our own fleet.

Shipping which is a very important discipline, needs professionals, not those without knowledge in this field, to run the industry. If the CSC does not have people who understands the industry, then they should hire professionals /consultants in that field, get rid of red tape, carry out a complete overhaul in the industry and make use of the 120 staff working for it to make it a profitable organization for the country.

The CSC not only failed to hire professionals but they did not even entertain ‘free and voluntary consultations’ in that regard. When I came to know that CSC was planning to buy a new bulk carrier I submitted a proposal for a 52,000 DWT bulk carrier built in 2008 (with five 30 ton cranes) where only one third of the total cost (USD 12 million) to be invested initially and the balance to be paid over the next few years whilst operating. But the CSC placed an order with China for a brand new ship for USD 35million when the current market price of such a vessel is not more than USD 26 million.

At the same time, we must not forget that there are various institutions in the country which conduct training courses for seafarers. A lot of young people follow these courses paying money but end up frustrated as their employment on board ships are not guaranteed. The government must, at least now study the relevant statistics of these institutions such as the number of trainees passing out in different disciplines, the number employed to date, etc and take necessary steps to solve the problem.

Q: How can we make optimum use of our natural harbors?

A: Trincomalee harbor which is strategically located is one of the most beautiful harbours in the world. In the 1940s we had the largest floating dock in Asia in Trinco and it is still one of the deepest ports in Asia. But unfortunately we haven’t made use of it. My proposal for a floating dock in Trinco fell on deaf ears of authorities who had other fraudulent motives.

Now we have a harbor in Hambantota in the vicinity of international marine lanes where approximately 2,000 ships ply up and down every day. It is an excellent port for bunkering but we have to attract the business by granting incentives, at least initially. But unfortunately instead of granting incentives, the ships calling on Hambantota Port have to pay so many unwanted and unrealistic dues which have discouraged ship owners. For example when our vessels call on UAE ports (a desert!!) we pay only US 3.50 per ton for fresh water but when ships enter Colombo, Galle and Hambantota harbours they have to pay US 8.50 per ton for water which is ridiculous! I consider this as a diabolical and a deliberate attempt by certain individuals to ruin the industry.

There are also plenty of opportunities for offshore businesses, such as offshore repairing. Once reputed firms such as Walkers, Colombo Commercials etc. used to have lucrative offshore repairing facilities which are not available now. Instead of one company monopolizing the field, if a couple of more institutions are allowed, competitive price and various incentives could attract more business.

Q: Your vessel Seruvila was the first cargo vessel to arrive in the Hambantota Port. But shortly after that you quit the industry. Why was that?

A: Yes that’s correct. My vessel was the first cargo vessel to arrive in the Hambantota Port with Buddha statues to ceremonially open the harbour by the former President at an auspicious time in the first week of October, 2011. Whilst I was in Miyanmar to sign a cargo contract for M.V Seruvila and Lanka Mahapola, a high ranking official of the Cultural Ministry approached me and asked whether I could help them to deliver these Buddha statues from Myanmar to SL. I promptly agreed and even refused the freight charges. Also, in order to keep the draft of the vessel less than 8.5 meters due to the rock on the piloting way, I even did not carry cargo which cost me more than 13 million rupees.

I was mainly operating from Myanmar, India, Bangladesh, Persian Gulf and Red Sea ports when the request to enter the harbor was received. The famous rock in the Hambantota Port was not cleared at that time and no vessel was willing to come. The funniest thing is todate I have never received even a word of thanks from anyone for the favour I did; but on the other hand they continued to harass me in various ways compelling me to sell all my ships in frustration.

As a private ship owner, in various situations, I also had to incur colossal losses. Seruvila was arrested in Cochin, India, requested by ‘Sri Lanka Shipping authorities’ in order to carry out a ‘full condition survey’. Lanka Muditha was arrested in Kakinadar with a load of sugar bound to Colombo on the advice of ‘our own flag administration’, as the chief engineer’s dispensation certificate expired on the day of leaving the harbor which could have been easily extended after arriving in Colombo. Lanka Mahapola was arrested in Karachchi, Pakistan on a false complaint made by an ‘unknown’ person, alleging the cargo was short for which the ship is not liable. Seruvila was prevented from leaving Colombo until the ‘defects’ (which were very insignificant) were rectified.

Lanka Muditha came to Colombo, discharged her cargo but again arrested by the flag administration stating that vessel has to dry dock prior to departure in spite of the fact that the due date for next docking was three months later.

Lanka Mahapola released from Karachi went to Dubai load 10,000 tons of fertilizer to Colombo and when she came to Colombo the CSC requested me to hand over the vessel within 48 hours in spite of a legal binding agreement and contrary to clauses on how to terminate a contract! The vessel was given to one ‘SSS Shipping’. Lanka Muditha after been taken over from me was laid up in Galle with plans to give it to the same party.

Q: How do you wish to contribute to the industry in future?

A: I will only be too happy to help the state authorities build up our merchant fleet. It would definitely be a very transparent activity with no fraudulent motives in it.

Q: Finally, what about our regional counterparts?

A: We can take the best cue from the Maldives. Their shipping industry is so strong with a fleet of more than 60 ships. The entire South Asian shipping industry is run by the Maldives. They do trading with us, India, Singapore and Malaysia. The government support is pledged to them and so many incentives are offered.
(The Island - 08022015)



Sri Lanka has enough cargo to service her own shipping industry

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