Shipping insurance companies dub Hambantota port in Sri Lanka as 'High Risk'

After the departure of the two ships which were released by the navy by the use of force, no ship has berthed in Hambantota.

Published: 14th December 2016 06:21 PM  |   Last Updated: 14th December 2016 06:21 PM   |  A+A-

Cars for transhipment being unloaded at Hambantota harbor Sri Lanka

Ships at the Hambantota port in South Sri Lanka

Express News Service

COLOMBO: Shipping insurance companies have dubbed Hambantota port in South Sri Lanka as a “high risk” one after local striking workers detained two vessels, including a large Japanese vessel carrying vehicles, for several days last week, the Sri Lankan Minister of Ports and Shipping, Arjuna Ranatunga, told newspersons here on Wednesday.

He also said that two or three foreign shipping lines have told the government that they will not be using Hambantota hereafter because detentions by harbour workers amount to piracy.

“But we are trying to convince them that the workers’ actions cannot be described as piracy. It was only a strike over possibility of retrenchment. We hope to convince them about this in a few days,” Ranatunga said.

After the departure of the two ships which were released by the navy by the use of force, no ship has berthed in Hambantota.

“Some ships were diverted by us to Colombo, while others which were due to call at Hambantota chose not to,” Ranatunga added.

The strike, which includes a sit in as well putting obstacles to prevent the two ships from leaving, is still on with the support of former President Mahinda Rajapaksa who in whose pocket borough the port is situated.

About 498 non-permanent workers recruited during Rajapaksa’s rule, are on strike to demand absorption into the regular cadre .They are also against the government’s decision to privatise the port through a Joint Venture with a Chinese company (China Merchants Ports Holding Company or CMPorts) because once privatised, the labour force is bound to be pruned drastically.

Ranatunga told the workers that they would not be retrenched and that government would negotiate with the Chinese company to ensure that the entire existing labour force is retained. He asked them to withdraw the strike and join duty by 2 pm on Thursday or be ready to be sacked. He warned them that if they continue the strike, the Chinese company would have no motivation to take them.

On the “Framework Agreement” entered into by the Sri Lankan government with the China Merchants Ports Holding Company, the Minister said that several matters which are mentioned in the agreement are still being negotiated before a “Final Agreement” is signed on January 8, 2017 to mark the second anniversary of the Sirisena-Wickremesinghe government.

The Minister made it a point to say that the security of the port will have to be with Sri Lanka Ports Authority (SLPA) in conjunction with the Sri Lankan navy, as is the case with every other port in Sri Lanka.

This is contrary to the relevant clause in the Framework Agreement which says that security will be with the Joint Venture Company in which the Chinese company will have 80% stake.

“I will not sign the agreement if SLPA is not made in-charge security,” Ranatunga said.

Asked if it will be possible to change the Framework Agreement so fundamentally, he said that the Framework Agreement is only another term for a Memorandum of Understanding (MoU). It is not a Final Agreement with all the details stated. The latter are still to be negotiated.

Ranatunga said that many changes have already taken place since talks with China on the Hambantota port began, which gives rise to the hope that further changes will be brought about.

“For example, the Chinese asked for a 199 lease and we said we will give only on a 51 year lease. Later they came down to 99 years from 199,” he pointed out.

The Minister said that he is not against the Public-Private Sector model to run Hambantota port because foreign countries prefer to invest through public-private partnership arrangements instead of giving loans.

“Also, the only way we can develop Colombo and other harbours in Sri Lanka is to make the Public-Private Partnership in Hambantota a commercial success. Right now we are sustaining Hambantota and other ports with the profits generated by Colombo port,” he explained.

On the  repayment of the US$ 1.4 billion loan taken from China to build Hambantota port, the Minister said that so far, Sri Lanka has been paying only the interest.

“We can’t afford to start paying back the principal,” he said.

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