New port in Sri Lanka a mega investment for China

COLOMBO - The massive terminal in Colombo is located mid-way on the lucrative east-west sea route and has facilities on a par with Singapore and Dubai according to Xinhua.The Colombo International Container Terminal, which is 85 percent owned by state-run China Merchant Holdings International, is designed to handle mega ships — a first for Sri Lanka which is aiming to become the region's shipping hub.Chinese loans and expertise were also instrumental in the construction of a new US$450 million deep-sea port at the southern Sri Lankan city of Hambantota which opened in June 2012.Independent shipping expert Rohan Masakorala says the new terminal made economic sense for China to tap in to the growing South Asian container cargo and gave Beijing a foothold along a strategic sea route."Terminal investments are a good business which can give a very good return," said Masakorala, a former secretary-general of the Singapore-based Asian Shippers Council."Through this investment, China is also securing the safety and efficiency of their main supply chain."Masakorala said about half of all world sea trade passed through the east-west shipping route and a presence at a mid-way point along that gives China a commanding position."For China to maintain economic growth at home, they also need to go out and secure their supply routes. In that sense, coming to Colombo is a strategic commercial investment."The Chinese investment in Sri Lanka has raised fears in New Delhi about China's influence in the neighborhood.But Priyath Bandu Wickrama, chairman of the state-run Sri Lanka Ports Authority, said India had nothing to fear from the new Colombo port and could be a major beneficiary."We will not allow any military base at our ports nor will we allow them to be used for any strategic military purpose by anyone," Wickrama said.Wickrama said shippers in India could save up to four days by routing their cargo through Sri Lanka rather than using Singapore or Dubai."Earlier, Indians along the east coast had to send their cargo to Singapore if they wanted to catch a mega ship going west. Now these mega ships will be going through Colombo and picking up Indian cargo," he said. "That saves time and a lot of money."The two major ports in south India, the Port of Cochin and the Port of Tuticorin, are too shallow for mega vessels such as the world's largest container ship, the MV Maersk Mc-Kinney Moller.
With a capacity of over 18,000 containers, the MV Maersk Mc-Kinney Moller, which was commissioned about two weeks ago, is expected to make up a fleet of 20 mega ships in the next two years plying the east-west route.
Professor Tsz Leung Yip, head of the International Centre for Maritime Studies at Hong Kong Polytechnic University, said Chinese expertise coupled with Colombo's strategic location would make Sri Lanka a key stop-over for international carriers who want to avoid Somali pirates off the Gulf of Aden.
"It is safer for ships to stop over at Sri Lanka and head to Cape of Good Hope, without calling at Dubai," he said.

Sourced: TravelDailyNews