The second phase of developing the Magam Ruhunupura Mahinda Rajapaksa Port (also known as Hambantota Port) recently commenced with the filling up of sea water to the basin. The ceremony was held under the auspices of Minister of Ports and Shipping, Arjuna Ranathunga where the Acting Chairman of Sri Lanka Ports Authority (SLPA) Capt. Asitha Wijesekara, Director to the BOD SLPA Saliya Senanayake, the Director SPD Ajit Hewageegana and a number of higher officials attended the event.

“The new government aims to transform the Port premises into the new socio-economic development with international industrial giants. Tomorrow, the port of Hambanthota will further be a land which will provide greater economic benefits to the Sri Lankan government through numerous value added products and services,” a statement from the SLPA released last week said.
An extract of the statement is given below.

The first phase of the Hambantota Port commenced in the year 2007. The complete amount incurred for the project exceeded US $ 500 million and 90% of this was based on the aid of loan granted by EX-IM Bank of China.
Even though, proper feasibility studies were not carried out regarding the viability of re-paying the large loan productively. This resulted to re-pay US $ 51 million or more than Rs.7 billion in Sri Lankan currency per year. It had been a burden to the Port and it was not a profit earning investment when compared to the investment incurred.

The activities of fuel storage complex had been commenced in the year 2009. The total investment is US $ 108.9. Fourteen oil tanks with the capacity of 80,000 cubic meters had been constructed under this project.
Oil tanks
Among these tanks, there are 8 tanks of fuel for ships, 3 tanks of fuel for aero planes and 3 tanks for liquidized petroleum. However, it was unable to obtain a satisfactory income as the operations were not carried out according to proper manner and a proper standard. New operational activities of the Fuel Complex constructed under the first phase of Hambanthota will be commenced by the present government within the forthcoming couple of months. It is expected to obtain the assistance of bunker brokers for this purpose. The aim is to make the Port of Hambanthota the best bunker hub in the Asian region.

Handling of transshipment of vehicles was commenced in the Port of Humbantota in 2012. The main aim of the present government is to expand the activities of transshipment of vehicles through the Port of Hambanthota with more productivity with the co-ordination of vehicle manufacturing companies and specific shipping lines transporting vehicles in mega vessels through the shipping routes. The Port of Hambanthota will be able to transship the vehicles manufactured in Japan and India to East-Africa, Gulf region and Europe, through the Hambanthota Port.

The construction work of the second phase of the Port of Hambanthota commenced in the year 2012, with the aid of US $ 808 million. Though, while taking the burden of the first phase which was based on unsuccessful port systems and rectifying same, the new government expects to take the second phase towards a successful development without destructing the national economy.

Investment opportunities
At present, 60% of the value of the port is required to re-pay the large amount of the total debt borrowed by the Port. Even though, the present government will not step down, to bring forward the development of the port with new objectives and strong transparency. It is planned to bring various businesses with a new force to the second phase of the Port of Hambanthota.

Accordingly, actions are being taken to invite the international investors for investment opportunities for third time and it is planned to bring a Petroleum Chemical Industry and other investors at an international level. Meanwhile, actions are also being taken to construct a main ship repairing center in the Port of Hambantota which falls within the region. By way of this the Port of Hambantota will be in possession of ship repairing center which would consist of dry docks and floating docks valued at US $ 400.

The total loan taken under the second phase will be paid, out of the revenue derived from the Port of Hambanthota without affecting the national economy. It is expected to carry out multi party businesses, through the Port of Hambanthota by mobilizing reputed excellence in the global marine field.

At present, 100% of excavation of the basin has been completed, and accordingly filling of sea water to the basin is taking place today. The total size of the water basin is 84 hectares. It consists of 14 million cm of sea water. It takes about 50 days. Aftermath of water filling activity, the Coffer Dam which was constructed with a length of 110m under first and second phases will be removed.

Completion of berth and possession of related equipment, including operational equipment, development of roads and construction, water and electricity works, other constructions and an efficient fire extinguish unit would be established under the future development activities of development of the Port of Hambanthota. All these activities would be completed before the end of this year.

The Port of Hambanthota, not like the earlier period, will be developed as a complete green port and in an environment friendly position. The new government aims to develop the Port with high productivity in this position. Actions have been taken to make Port of Hambantota a successful strategic Port through the process based on policy, though the same was revealed as one proceeded unsuccessfully.

The Port of Hambantota is being developed to make Sri Lanka a strategic Port Centre in the silk route, which can perform a productive task. Accordingly, a large space has been provided within the Port premises for operations of vehicles of import and transshipment. The operation of free industrial zone which is being constructed close to the harbor, will be commenced in completion of the second phase of the Port.