Colombo’s near-monopoly to continue despite proposed port tariff hike

Meanwhile, India’s triad of three deep-sea ports’ - Vizhinjam, Enayam, and Vallarpadam - planned cumulative capacity is roughly double the entire capacity of Sri Lanka ports put together.

Published: 30th November 2018 02:00 AM  |   Last Updated: 30th November 2018 08:38 AM   |  A+A-


Image used for representational purpose. (File photo | AP)

By Express News Service

KOCHI: The recent proposal of the Sri Lankan Port authorities to raise the port charges at Colombo has further underlined the near-monopoly and confidence of retaining the port’s superiority in the Indian Ocean, according to industry officials.

They said at the heart of the problem are ‘sky-high’ port tariffs of Indian ports. The average call cost for vessels of 3,000 TEU (12-foot equivalent unit) capacity in India works out to $32,000, compared with $7,000 in Colombo, $8,000 in Singapore and $12,000 in Hong Kong, according to, a shipping industry news website.

Meanwhile, India’s triad of three deep-sea ports’ - Vizhinjam, Enayam, and Vallarpadam - planned cumulative capacity is roughly double the entire capacity of Sri Lanka ports put together.

According to them, India’s ports remain underutilised despite inherent advantages. For example, the Vallarpadam port is running at less than half the normative capacity, according to the Indian Container Market Report 2017. But ironically, the Colombo port still handles 48 per cent of India’s international cargo despite the government’s policy declaration of curtailing the transshipments from India.

“As the volume of Indian cargo getting transshipped at Colombo increases, and with Colombo hiking port charges, it is Indian trade that is getting impacted with high freight costs. Insofar as Indian flagships, we are staring at a grim future, especially without the availability of institutional financing and the burden of multiple and regressive taxes,” said Anil Devli, CEO, Indian National Ship Owner’s Association, which represents 95 per cent of Indian tonnage.

In its latest policy revision, the Union Government has revised the cabotage policy, allowing foreign players to bid for domestic container shipping, without paying income tax, GST and abiding by any local labour laws. This has tilted the competition ‘decisively’ in favour of the foreigners and Colombo, he said.
Sabyasachi Hajara, former CMD of Shipping Corporation of India (SCI), said the cargo-related charges at the Indian ports are completely out of sync.

“Unfortunately, our neighbouring ports in Sri Lanka and Singapore are in an extremely advantageous position vis-a-vis Indian ports due to the low rates. Our EXIM trade is diverting to those ports due to this,” he said, adding that the Union Shipping Ministry seems to be having a death wish for the Indian shipping and the ports sector. “We don’t have a facilitating regime,” Hajara said.

While connectivity to the Vizhinjam port will be a big issue, Hajara said Vallarpadom is handicapped by its small draft. This is vividly reflected by the impressive growth of traffic in the Colombo port. 

In the first nine months of 2018, transhipment volumes grew 19.4 per cent to 4.2 million 20-foot equivalent units (TEUs).

Meanwhile, the global container lines also continue to favour Sri Lanka as they chose to transship Indian cargo at Colombo and not at an alternate Indian port despite being permitted tax-free access to Indian cargo for coastal carriage to do the same.

“With huge EXIM cargo volumes, the legacy of ship owning and operating skills, best quality seafarers’ pool, and growing economic muscle, India has the potential to emerge as a regional maritime ‘power-house’. If the government provides a level-playing field, our larger shipping ecosystem is also good enough to take on the best in business,” said Devli. 

Not surprisingly, the Colombo port is a transhipment hub and gets most of the business from Indian traffic, and it will continue to attract so in the distant future.

Stay up to date on all the latest Kochi news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp