Sri Lanka: Dredging Allows Colombo Port to Dock Bigger Ships

Colombo’s new deep draft terminal constructed under the Colombo Port Expansion Project (CPEP) received its first container carrier, an 11,000 TEU Ultra Large Container Ship (ULCS) “MV CMA CGM PEGASUS” operated by CMA CGM, the world’s third largest container group and number one in France, on the 5th of August, 2013.

The vessel touched Colombo on its China-Europe leg, plying on its FAL3 (French Asia line) service. The first terminal of the CPEP, Colombo International Container Terminal (CICT) was constructed on a Built Own Transfer (BOT) agreement with a Public-Private-Partnership between the Sri Lanka Ports Authority (SLPA) and the China Merchants Holdings (International) Co., Ltd. (CMHI). The consortium that has been formed as the operating company for the terminal is Messrs. Colombo International Container Terminal (CICT) Ltd., with which the SLPA holds a substantial equity partnership. Within, so short a time as one year and seven months, a major part of the construction of the terminal was completed to start operations.

The vessel “MV CMA CGM PEGASUS” docked at the CICT at 07:20 hrs. and handled 1556 moves commissioning the latest state-of-the-art handling equipment fixed at the terminal. According to published literature, world’s first ULCS has been built in 2006 and 185 ULCSs used to plough the trade route between Asia and Europe without calling at Sri Lankan or Indian Subcontinent (ISC) ports prior to the construction of CICT. “Now CICT can handle “Triple E” vessels and it will push Colombo into the big league”, one local shipping expert said.

The CPEP, with a total annual container throughput of 7.2 Million twenty foot equivalent units (TEUs) and a monumental breakwater of 6.8 Km, augmented container handling capacity with facilities to serve mega ships was bestowed upon the nation by His Excellency Mahinda Rajapaksa, the President of the Democratic Socialist Republic Sri Lanka on this very same 5th day of August, 2013.

The CPEP comprises two phases, viz., Harbour Infrastructure Works and Construction of Terminals. The project expands the present Port of Colombo on its south with an additional 18-meter-deep harbour basin surrounded by breakwaters, thereby providing a calm water area to set up three modern container terminals of 1200 meters in length, each having a capacity of 2.4 Million TEUs, in stages. The Harbour Infrastructure Works consisted of construction of breakwaters in the open sea to the bathymetry level of – 18 meters and dredging of main channel to -20 meters up to a length of 9 km with a width of a little more than half a kilometer to cater for two way shipping. Construction of Harbour Infrastructure Works commenced in April 2008 and completed in April 2012 at a cost of Rs. 44.8 billion allowing time for terminal construction.

A ceremony was held on board the vessel “MV CMA CGM PEGASUS” in commemoration of the service’s maiden call at the CICT of the Port of Colombo, on the 5th of August 2013. To mark the significance of this move, plaques were exchanged among officials of SLPA, CMA CGM, and CICT. SLPA was represented by Managing Director, Capt. Nihal Keppetipola.

At the plaque exchange ceremony, Managing Director of SLPA Capt. Nihal Keppetipola stated with an optimistic note “The rationale behind the decision to construct capacities outside the existing port in Colombo was the cargo forecast done by Scott Wilson of UK several years ago, which stated in their analysis that the potential for container cargo at the Port of Colombo is tremendous with the Indian Subcontinent (ISC) domestic cargo growth plus the mega ships over 18,000 TEUs carrying capacity ordered on the global vessel production drawing board. These giants could only touch deep draft mega hubs along the Asia-Europe shipping lane. Therefore, it was imperative to build capacity over the existing port in order to ensure Colombo gaining mega hub status in South Asia”.

“Colombo can now handle vessels having a carrying capacity 18,000 TEUs or even more. There is another equally pleasing piece of news for me to share with you today. That is, the government of Sri Lanka has declared its ports as free ports and the ports have been empowered to establish free zones to promote logistics integration. So our strategy would in the future be Capacity Expansion coupled with Logistics Integration. The SLPA has already started construction of the second terminal of CPEP, the East Container Terminal with its own funds and it will also be ready for operation in early 2014”, he further added.

Mr. Farid T. SALEM, Executive Officer of CMA CGM Group, who has flown all the way from France to grace this occasion said, “Sri Lanka has every chance to realize its aspirations of becoming the maritime hub in the region. You now have a deep sea port for mega careers, a stable government and more importantly, Sri Lanka is blessed with a geo-strategic location. I am proud to state that CMA CGM’s terminal investment arm, Terminal Link has entered into a new strategic partnership with CMHI which will allow us to join our complementary forces to operate and further develop in Terminal investments. I fervently believe that the moment is very opportune today for Sri Lanka, there are very favorable economic indicators that evince that Sri Lanka is on the forward march”.

Assistant President of CMG and Managing Director of CMHI, Dr. Hu Jianhua, commenting on the occasion, said, “ Today, I am very happy to see that Sri Lanka’s first deep draft terminal, its mega maritime PPP project, commenced operations smoothly. China realized Sri Lanka’s maritime potentiality a long time ago and that is the only rationale for our investment here on this terminal. I can see that relations between China and Sri Lanka have reached a peak level, especially during the Administration of His Excellency the President Mahinda Rajapaksa. The Chinese assistance to various sectors of Sri Lanka is on a very high level, and is very apparent in the port sector.”

Overseas Operation Officer of CMHI and Director and CEO of CICT, Mr. Nelson Liu, also opined optimistically at the function, “It is a moment of great significance for CICT today as we have completed a major part of the terminal ahead of schedule. We are fully confident that the total 1200m quay length of the terminal will be ready by next year. This is only the beginning and there is no other alternative port than the Port of Colombo in the region for mega liners having a carrying capacity of 11,000 TEUs. Therefore, the capacity growth is of paramount importance for Colombo”.

The Master of the vessel “MV CMA CGM PEGASUS” Capt. Nikola Tabar explained some of the salient features of the ULCS vessels including its eco-friendly features. “I am happy to have a stop-off in Colombo on my voyages and when all the other terminals of the expanded port take shape, I am sure, it will be one of the best ports in South Asia”, said, Capt. Nikola.

Deputy Chief Operations Officer of CICT, Mr. Ray Ren and General Manager, Mktg. and Commercial of CICT, Mr. Tissa. Wickramasinghe also participated in the ceremony.

Mr. Ikram Ghazali, Director CMA CGM Lanka (Pvt) Ltd, and Mr. Kalinga Seneviratne, Deputy General Manager (Operations and Logistics), CMA CGM Lanka (Pvt) Ltd, represented the local office of CMA CGM.

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Press Release, August 8, 2013