By Sagara Senadhipathi –
The sight of a comet never fails to fascinate the human mind. A comet appearing in skies above is regarded as harbinger of bad tidings or heavenly riches. The Halley’s comet in 1910 created a comet fever that engulfed the world.
Our portly Minster of Ports & Shipping Mahinda Samarasinghe has seen a new comet over the port of Colombo. It has bent him out of shape. He is enraged. He is fighting mad.
He tells anybody who cares to listen, that if liberalized, as proposed in the budget, our shipping sector will experience, illness, pestilence, shortages and great famine. The new comet also a Hayley’s has a ‘ y’ in the middle, has a tail as all comets do that points away from the sun.
The tail that points away from the sun and shields us from the current intrigues in our shipping sector is called ‘Advantis’. This is the celestial spectacle that has wobbled and warped the good sense of Minster Mahinda Samarasinghe.
The Sri Lankan Conglomerate Hayleys is controlled by Dhammika Perera our stock market oracle. Given our modest size, he commands a punch as good as that of Warren Buffet. In fairness to Warren Buffet, it must be said that the oracle of Omaha does not own any casinos in Las Vegas or was the US transport secretary. Our man was Transport Secretary under Mahinda Rajapaksa.
Our man is more hands on but shuns the spotlight. When he buys a company, he buys the punditry attached to it.
‘Hayleys Advantis’ is the transportation and logistics arm of Hayleys Plc. As the Daily FT reported on 17th August 2017, Hayley’s Advantis acquired 94.8 % stake in the Sri Lanka Shipping Company Limited for Rs.4.9 Billion. In a disclosure to the Colombo Stock Exchange Hayley’s Plc informs that the acquisition was in pursuit of a strategy to expand its maritime operations and paving the way for the establishment of the largest maritime and shipping company in Sri Lanka.
According to the Daily FT of 17th August 2017 “Sri Lanka Shipping has enjoyed an excellent and respected position in the local shipping industry and is headquartered in its own building at Nawam Mawatha named after its founder Chairman Robert Senanayake the second son of our first Prime Minster D.S.Senanayake and brother of Prime minister Dudley Senanayake.
Robert Senanayake became a pioneer in the local shipping industry when he bought Freudenberg and Company founded in 1873 by Philip Freudenberg a German who came to buy coffee and realized the need for shipping service that linked the colony of Ceylon with Europe in the wake the Suez Canal eliminating the need to round the cape.
Sri Lanka Shipping Company is a provider of a range of services as agent for liners and tramps.
The proposed port liberalization will make the new acquisition of Hayley’s Advantis a grand stable with no stallions. A Puswedilla that cos them Rs.Five Billion. Agency houses don’t have assets. They have agencies and name boards.
To Dammika Perera its acquisition is what Berkshire Hathaway meant for Warren Buffet. An anchor depictive of acquired continuity of some respectable continuity and brand value.
Despite our frequent and exaggerated bragging of its import as a maritime hub, Sri Lankan sea ports have not leveraged their strategic import. Indian transshipments account for 80% of the volume of the port of Colombo.
The former Minster Arjuna Ranatunga in February, this year said that Colombo Port has been ranked among the world’s best 25 ports in the Alphaliner rankings in 2017. Colombo port has a capacity for 7.5 million containers per year as of now. Utilization however stood only at 5.4 million in 2016 which is 69% of its capacity. It looks as if the port of Colombo is in step with Sri Lankan Airlines which according to its last published annual report has on overall load factor of 68%!
According to Logistics Performance Index (LPI ) Sri Lanka is ranked 68th among 160 countries and way below many in the region. Mr.Mahinda Samarasinghe demands an upfront US Dollars 100 million from possible foreign entrants to his nautical marvel.
The last published picture of him in conclave with Captains of the ship agency cartel – Ceylon Association of Ship Agents – CASSA showed his designer hair cut crown nearly colliding with the bald pate of the Advantis boss. As my grand moter Daisy aachchi would say Five Billion is not ‘Kadgu Ata or Kos Ata’.
Incumbents cartels with proprietorial privileges as parasitic middlemen are hard to budge. They use their access to political patronage to dull competition. If we are to make our port of Colombo a conducive hub for transshipments to the Indian sub-continent we need to offer a measurable value proposition to Indians who are already engaged in developing their port infrastructure which in the near future will infuse more competition.
Charting a new course, in maritime economics is not a choice but an imperative. Encouraging large operators to make a tangible presence in the port of Colombo is possible only by opening the field with a neutral regulator. An efficient port inevitably leads to strong export earnings and wider benefits.