Nov 29, Colombo: Sri Lanka's Minister of Ports and Shipping Mahinda Samarasinghe said he is not in agreement with the 2018 budget proposal to open the shipping agency services to foreign companies and it has been included in the budget proposal without discussions with his ministry.
Speaking at the Budget 2018 committee stage debate of his ministry on Tuesday, Minister Samarasinghe said he will not allow to open the sector to foreign companies without an investment guarantee since such a move will affect the local shipping agents.
"Our policy is not to destroy the local businessman," he said.
The Minister suggested to set a condition of at least $100 million investment for foreign companies if they want to enter in to shipping services.
He said there has been good progress in the port sector and steps have been taken to give priority to implement a number of delayed proposals.
He said in 2017, SLPA made a profit of 11 billion rupees in 2017 and the Ministry will commence the fifth stage of Jaya Container Terminal development.
The Minister further said that the existence of the Sri Lanka Port Authority (SLAP) depends on the development of the East Container Terminal of the Colombo Port.
The Minister pointed out that at present large ships can only enter the CICT terminal of the Colombo Port operated by a Chinese company and if the East Terminal facility is developed the SLPA could boost its revenue.
Minister Samarasinghe noted that the main challenge was the Hambantota port. The last government has taken a large amount of commercial loans to build the port.
He said the under the joint venture agreement, the Treasury had agreed to allocate money for settling the port's debt.
"USD 1500 million was borrowed to construct the Hambantota Port. Last year, Rs. 10 billion out of the SLPA profit was spent on debt servicing. As a result last year our profit dropped to Rs. 1 billion. This year Rs. 12 billion is needed to service debt. The Treasury took over the debt payment following the joint venture agreement. Therefore, we have been able to raise our profit to Rs 11 billion this year."
He stressed that the existence of SLPA depends on the East Container Terminal and Cabinet approval is expected for the development of the terminal and also the west and north sections.
The Minister observed that if the Trincomalee Port can be connected to tourism, then tourism can be developed. A large development plan is in progress now to develop the Trincomalee Port, he added.
Minister Samarasinghe said a national action plan for the shipping sector will be formulated and draft bills in the sector will be amended accordingly.