The liberalization of the industry, which contributes to around $ 400 million, enables foreigners ease of entry into the Sri Lankan market. This controversial move, which jeopardizes the local shipping and freight forwarding industry, has resulted in the Finance Minister’s fellow Cabinet ministers ganging up against him, Colombo Telegraph reliably learns.
At the forefront of this battle is Ports Minister Mahinda Samarasinghe, a close ally of President Maithripala Sirisena, who has said in no uncertain terms that he will not let Samaraweera’s proposal pass.
Samarasinghe argues that his ministry, which is also the line ministry concerning the matter, has not been consulted before including the proposal in the budget.
“When this was proposed before, our ministry said firmly that it would completely destroy the local industry. But Mangala has arbitrarily included the proposal in the budget bypassing us. I am taking this very seriously,” Samarasinghe had told some of his Cabinet colleagues on the sidelines of the Cabinet meeting today.
Several leading shipping agents have also informed Samarasinghe of their grave concerns and urged him to raise this matter with the President. It is learnt that they have also lobbied several other influential Cabinet ministers.
Samarasinghe, who represents the SLFP, had said he would take it up with the President and push for rescission of the proposal.
Meanwhile, addressing a post-budget forum in Colombo on Monday, Finance Minister Samaraweera said changing the core principles of free enterprise and liberalisation was “non-negotiable”, indicating that he was not ready to backtrack on the matter.
“I would say nothing is cast in stone. We are willing to listen to suggestions where there may be anomalies to correct, but the basis of free enterprise is non-negotiable, liberalisation is non- negotiable. But within those parameters, certainly, we are willing to be flexible,” Samaraweera told the post-budget forum.
Despite the resistance from others in the local industry, from Maersk Line – the largest container shipping line globally and a prominent player in Sri Lanka, said it fully supported the 2018 budget proposal to open up the shipping and logistics sector to foreign investments and the introduction of an independent port regulator.
Steve Felder, Managing Director India, Sri Lanka and Bangladesh for Maersk Line in a statement issued on the subject mentioned “Maersk Line supports any efforts that governments make to liberalize and improve the business environment for the maritime industry, and for our customers. In this spirit, we commend the proposals tabled in the Sri Lankan parliament last week, which included removing the restriction on foreign ownership of shipping agencies & amendment of the Merchant Shipping Act, which are intended to further support the development of Colombo as a key Maritime hub.”
The statement said the liberalization of shipping agencies is expected to reduce transaction costs for carriers using Colombo as a transshipment hub thereby making it attractive for shipping lines like Maersk to further increase volumes especially given the growth of new transshipment hubs in this region.
Felder further said, “if the proposals tabled in the Parliament last Thursday which included removing the restriction on foreign ownership of shipping agencies, and the amendment of the Merchant Shipping Act, are approved, we will engage closely with our headquarters and our valued partners in Sri Lanka, and together evaluate options on increasing our footprint in Sri Lanka.”
Meanwhile, a Writ of Mandamus was filed by UPFA MP Vasudewa Nanayakkara against Minister Mahinda Samarasinghe and three others compelling the Minister to pass regulations under the provisions of the Merchant Shipping Act to prevent monopolization and cartelization of the shipping industry in Sri Lanka. (By Thilini Samarakkodi)