Future Container Traffic

The current growth of Indian Sub Continent (ISC) exports is substantial and despite improved efficiency with the introduction of new privately operated terminals, existing Indian ports have not been able to cope with the increasing demand for their services; congestion and delays are a frequent occurrence. Against this background, forecasts for the next forty years of the potential container traffic through Colombo were prepared in 2004. These forecasts were based on current shipping and trade data and were developed by considering the following drivers:

  • Assessment of future domestic traffic, taking a conservative view of Sri Lankan Government projections.
  • Assessment of future total ISC transhipment volumes over the next 40 years.
  • The segmentation of the ISC transhipment market between Colombo and other principle ports competing for this traffic, including Singapore, Tanjung Pelepas and Port Klang to the east, Salalah, Dubai and Aden to the west and JNP and emerging new ports in India.

The forecast of container traffic has been prepared after extensive studies and following salient conclusions have been made used of.

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  • The level of domestic container traffic is projected to rise by 9.5% annually to 2010 and accounts for approximately 30% of the total container traffic with transhipment providing the balance.

  • The total container traffic at Indian ports is expected to grow at a rate of 12% per annum in the next few years; this will taper off to 9% in 2010 and 7% after 2015. This forecast is based on “export growth predicted by authoritative forecasting bodies” and marginal additional container penetration. The growth rates may be considered conservative since they are below growth over the last 5 years, which averaged 14% per annum and India still handles less than 5 million TEU, while China, with a similar population, handles over 40 million TEU.

  • The transhipment share of total ISC traffic is forecast to decline from 45% to 33% by 2008 as India receives more direct calls. This assessment has been developed on a port by port basis having regard to base load and the influence of cabotage on Indian port operations. Although some ports may receive 100% direct calls the continuing emergence of other small ports ensures a future market for transhipment.

  • The dominant position once enjoyed by Colombo is facing increasing regional competition. However on the basis that premier league levels of productivity will be offered, the institutional framework of the Sri Lankan port sector is modernized and the port operators are able to negotiate tariffs without external control, a revival of Colombo’s share of regional transhipment traffic is expected, with an increase from a 23% share in 2002 to just over 30% by 2015.

The base case level of average growth of 7.2% per annum has been adopted for port planning purposes. The projected throughputs to 2020 are illustrated below. It will be noted that the high case for 2005 was exceeded.

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The existing capacity of Colombo is 3.3 m TEU p.a. which with enhancements could rise to at least 3.7 m TEU p.a. The forecasts indicate that new capacity will be required within a few years.

The forecast, prepared in 2004 was reviewed in October 2006 and despite some local variations in predicted events it was concluded that there was no reason to change the long-term forecasts. Events which may have an impact on the forecast are

Some events which may have an impact on the forecast are

  • World Trade
  • US Economy
  • Indian Sub-Continent Economies and Traffic
  • The Rate of Development of Indian Sub-Continent Ports

Development Plan

The layout of the proposed Colombo Port Expansion Project (CPEP) has been designed to accommodate vessels with an overall length of 400m, beam of 55m and draft of 16m. The proposed layout illustrated in Figure 6 shows that CSH will be created by the construction of a major new breakwater to the west of the existing harbour and a smaller secondary breakwater. The harbour will be served by a new two-way channel with a depth of 20m and a width of 570m. The new breakwaters in the initial phase will enclose a basin area of 285 ha which will support three new terminals each with a quay length of 1200m and a land area of 58 ha. The basin will be dredged to –18m with provision to deepen it to -21m should a new generation of deep drafted vessels come on line. There is also provision to extend the breakwater under a second phase to provide area for a fourth Terminal.

Figure 5 : Layout of Colombo South Harbour – Phase 1

Each terminal has a planned capacity of 2.4m TEU per annum. It has been assumed that ship / shore transfers will be handled by 12 rail mounted gantry cranes and the yard will be operated by 40 RTGs. The area behind the berths will have a width of 476 m comprising a quay apron of 71m, a stacking yard of 325m, a rear yard of 45m, and common access road and utility corridor of 35m. The cross section is illustrated in Figure 7. Although planned around RTG’s the land area is sufficient to accommodate any yard handling arrangement which may be preferred.

 Figure 7.

Environmental Impact Assessment (EIA)

Under the Government of Sri Lanka procedures for EIA, CPEP is classified as a “Prescribed Project” in accordance with the National Environmental Act, No. 47 of 1980 (as amended by Act No. 56 of 1988). In addition, CPEP is classified by ADB as “Category A”.

The Central Environmental Authority, (CEA) maintains overall responsibility for the EIA requirements of the Act. The Act provides for the designation of Project Approving Agencies, which take responsibility for administering individual EIAs according to the location and nature of the project. The Project Approving Agency for the project is the Coast Conservation Department (CCD).

As such, an Environmental Impact Assessment has been carried out in accordance with briefs issued by both ADB and CCD. The EIA was submitted in 2005. It was based on extensive baseline surveys and covered the Physical, Biological and Socio-economic Environments.

Because the works are to be constructed on reclaimed land and 70% of the new traffic is transshipment, there will be minimum impact on the built environment. Potential impacts on the coastline due to the construction of the breakwater have been assessed.

Following due consultation with Government Agencies and Stakeholders, the coast conservation Department issued a permit on 8th February 2006. The Developer will be required to submit on and Environmental Monitoring Plan prior to commencing construction and the environmental performance of the project will be managed through an Environmental Management Plan.

Capital Cost and Cost Allocation

The SLPA wishes to minimise the public sector borrowing requirement by offering concessions on a competitive basis to consortia which include private terminal operators, shipping lines and financiers to build and operate the new terminals in partnership with SLPA, on a BOT basis.

The initial development costs for infrastructure comprising the construction cost of the breakwater, channel, land, access, utilities, small boat harbour and navigation aids is estimated to be in the region of US $ 320m. The cost of the first terminal comprising quay wall, yard reclamation and surfacing, buildings, power and services as well as terminal equipment is estimated to be about US $ 300m. The elements included in the cost estimate are shown in Table 4.

It is envisaged that all Basic Infrastructure necessary for Phase 1 of the project will be constructed as a single contract and that terminals will be constructed and operated by a public private sector partnership sequentially as and when required by the growth in demand.

Public Sector

Private Sector

Harbour Infrastructure

1st TerminalConstruction

1st TerminalEquipment


Main Breakwater

1,200m Quay Wall to –18m

12 quay cranes


Dredging and reclamation behind the breakwater.

Yard Reclamation

40 RTGs


Small boat harbour,
Sub-sea pipeline
Navaids

Yard Surfacing 48 ha

Vehicles
Tractors / Trailers
Reach Stackers


Shore access utilities & minor works.

Terminal infrastructure Buildings, power and services

Management Systems


Harbour Craft

 

 

Table 4: Investment Elements

As such, an Environmental Impact Assessment has been carried out in accordance with briefs issued by both ADB and the Government Agencies. The EIA was submitted in 2005. It was based on extensive baseline surveys and covered the Physical, Biological and Socio-economic Environments. Because the works are to be constructed on reclaimed land and 70% of the new traffic is transhipment, there will be minimum impact on the built environment. Potential impacts on the coastline due to the construction of the breakwater have been assessed.

Following due consultation with Government Agencies and Stakeholders, the Coast Conservation Department issued a Permit on 8th February 2006. The Developer will be required to submit on an Environmental Monitoring Plan prior to commencing construction and the environmental performance of the project will be managed through an Environmental Management Plan. A quarry with an existing permit for extraction and transport of rock has been identified. Should the quarry rock be sourced from an alternative location, the issue of a permit will be dependant on completing a formal EIA.

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