Dr Sarath Obeysekera
General
Port of Trincomalee commands a large, natural and a wide body of sheltered water in Sri Lanka. The Port of Trincomalee could be developed to play a major role in this unique economic region considering its locational advantage, deep water port facilities, large hinterland for establishing industries and accompanied with quick land connection to Port of Colombo, with the expansion of express way network.
1. Proposed Action Plan
The Export Development Board has initiated a consultancy service to carry out the Feasibility study on market, technical and financial aspects for creation of business opportunities for layup and to receive the possibility of attracting investors to develop certain sections of Trincomalee Port to facilitate construction and assembly of structures related to marine and offshore sectors. This includes enhancement of Port facilities and continue layup stacking and stacking of structures of oil rigs and other vessel.
1.1. The Chairman/ CEO of EDB through a letter Sri Lanka Ports Authority(SLPA), has requested assistance from SLPA to collaborate with EDB to conduct the study and provide technical support whenever necessary for the feasibility study of marine and offshore sector development.
1.2. In addition to the Port related industry development in the lands of Port of Trincomalee, and explore the business opportunities in the field of marine and offshore sector related investment in Port of Trincomalee EDB is of the opinion that it can generate much needed foreign currency in the country and would be a great opportunity to overcome the ongoing crisis.
1.3. Currently, the Clapenburg area of Trincomalee Port, year marked to be used for development of a Repair and Construction yard to carryout marine and offshore sector related heavy engineering work.
1.4. the land parcel which may be require to develop marine and offshore sector facilities and the location for future LNG facility has been studied in the feasibility study has been done by SLPA .
Interested investors for the Development of a yard to carry out Marine and Offshore related work in Port of Trincomalee may be selected using an EOI (Expression of Interest) followed by an RFP (Request for Proposal) process through open competitive bidding process on prioritybasis with a view to entice foreign investors with FDI.
As an alternative to calling offers which may take long time Sri Lanka can approach Indian Government to request a G to G ( Government to Government ) investment proposal on PPP ( Private Public Partnership) basis with plans to allow local companies like ColomboDockyard to join,
2. Approval
Considering the above facts, EDB has proposed to Sri Lanka Ports Authority with Ministry of Industries may seek the approval of the Cabinet of Ministers to
1.
2.
2.1. Conduct EOI process from interested investors through open competitive bidding process for the Development of Marine and Offshore Sector in Port of Trincomalee followed by a RFP process once the prequalification is made from EOI process.
2.2. Appoint Cabinet Appointed Negotiation Committee and a Project Committee including technically competent officials and a treasury representative to handle all procurement matters pertaining to the Project and to determine successful proposals and make recommendations to the Cabinet of Ministers.
3 Proposed contents of the Cabinet Memorandum
CABINET MEMORANDUM m DEVELOPMENT OF MARINE AND OFFSHORE INDUSTRY
1. Background
Marine and Offshore is a key industry in Sri Lanka which is yet to be grown its full potential. SriLanka is blessed with several competitive advantages, compare to other regional countries who are reaping very lucrative benefits and strongly positioning for future opportunities. Sri Lanka has one of the best, safest and sheltered natural deep-water port located in Trincomalee
amongst other strategic ports such as Colombo and Hambantota located near the world’s busiest sea routes, where it is stated that nearly 200-250 vessels sail passing Sri Lanka per day from west to east and the country will benefit immensely if we venture into this market segment.
The Marine and Offshore industry can be developed in Sri Lanka due to its strategic location, with available competitive labor cost, technical capabilities, shipbuilding led industrialgrowth and with the government support through industrial parks, free zones, and special economiczones. Also, the absence of a marine hub between Dubai and Singapore is a deserving factor for the development of this sector. In addition to Oil and Gas exploration and development activities in offshore India has drawn a large traffic of Oil and Gas marine assets to go pass Sri Lanka for their jobs in India both in and out of India.
The Trincomalee Port is one of the largest natural deep-water harbors in the world. However, it hasnot been effectively utilized to its fullest capacityat present and has high potential to cater to the global Marine and Offshore
industry if properly developed. Also, the other ports such as Hambantota, Galle, Colombo can be developed or expand its capacity to provide Marine and Offshore Services.
By developing facilitates in the port of Trincomalee as the nucleus, the Marine and Offshore Engineering sector can contribute to the Sri Lanka Economy to generate high amount of foreign income. According to the available statistics from the industry and the projection for next few years, the country could earn US$ 10bby year 2034. By developing Offshore Construction projects, it is expected to generate income to Sri Lanka from 2025 to 2030 over 10 billion US $
In Sri Lanka there are few Sri Lankan companies who are able to provide most of the servicesrelated to Marine and Offshore Sector, particularly for all Oil Rig Layup facilities.
The Term Lay-up” means ships are temporarily taken out of regular operations/service and placed on idle mode due to lack of business, lack of cargo, freight rates are not feasible to operate, having major repairs to be carried out or that the ship is arrested by law” or is under sale or waited to be scrapped. When ships are placed on lay-up, they are either berthed inside port at quayside with safe mooring or tied to a Mooring” at a safe anchorage location in sheltered waters. Not many ports/locations in the world or in our region offers the above basic requirement to ships, however, Sri Lanka is blessed with the Ports of Trincomalee and Hambantota They Have successfullymanaged to intercept this market segment withthe aggressive and smart promotion/business creation by selected private Sri Lankan companies.
The Sri Lankan lay-up locations (Trincomalee, Hambantota, etc.) are located closer to major shipping routes – enables quick reactivation when business commence. Multiple Industries will also be benefited by developing this sector. Considering Oil Rig layup, repair and maintenance, sectors involved in logistic /supplies to rigs laid up, bonded ware housing companiesto store parts, Ship Chandeliers, Fuel suppliers to rigs, local companies involved in renting equipment. are directly benefited. Among the indirect benefits recognized are training locals and foreign personnel through uplifting existing curriculum in higher education relating to this sector, on charging fees, enticing Foreign Offshore Design/construction companies to utilize Port City facilities and tax benefits to establish their offices in Sri Lanka, Training Staff to get involved in pending LNG Industry in management.
However, Marine and Offshore Industry currently faced some issues which is a huge impact for thedevelopment of the sector. Some of the short-termissues faced by this sector are given below. Byaddressing the below issues, sector can contribute more to the economy soon.
1. Lack of Berthing facilities for Quayside lay-ups, servicing, and repairs of Rigs/Offshore Assets.
2. Lack of Mooring facilities for Anchorage work/lay-ups, servicing, and repairs of Rigs/Offshore Assets.
3. Rig Height Restrictions imposed by Sri Lanka Air force for vessels that can enter and stay at
Trincomalee Port for lay-up and other services.
3. Recommendation / Approval
In view of above, the approval of the Cabinet of Ministers is sought for the following short termpriority proposals.
1. To resolve the lack of Berthing facilities for Quayside lay-ups, servicing, and repairs of
Rigs/Offshore Assets.
Ashraff Jetty in Trincomalee has been selected as a suitable site to established berthing facility for large vessels and oil rigs (Capsize, max. 300 m long). Expand the Jetty to accommodate the berthing of large ships facilities to be upgraded to have good strong bollards and fenders.
2. To resolve the lack of Mooring facilities for Anchorage work/lay-ups, servicing, and repairs ofRigs/Offshore Assets.
To lay-up ships, a port should have ample berthing space at anchorage. Further, the anchorage position should be in sheltered waters protected against winds and waves. Trincomalee has these conditions and increase services into this business segment. Therefore, it is suggested to
fix mooring buoys for the identified ship layup locations within Trincomalee bay and providenautical mooring facilities in case coal or gas fire powered project in Sampur will emerge.
To resolve the Rig Height Restrictions imposed by Sri Lanka Air force for vessels that can enter and stay at Trincomalee Port for lay-up and other services. Due to China Bay Airport, Trincomalee flying path falling over the Trincomalee Port, the Sri Lanka Airforce has imposed restrictions to bringing ships over 45m of height. This is a bigbarrier for the growth and sustenance of the Trincomalee Port which is a natural treasure ourcountry is blessed with to earn much needed foreign exchange revenue and generate job /
business opportunities. The Sri Lanka Airforce conducts training school/flights and they consider the vessel height over 45m is a risk for their training flights. Sought out this issue with the Ministry of Defense and Sri Lanka Airforce.
investments to development Marine & Offshore industry in Sri Lanka under the leadership of
Sri Lanka Ports Authority can provide Night time navigation during the operations/
For night time navigation the ports need lights, buoys, and lighthouses to
ensure safety and maintenance can be outsourced to private parties. SLPA will beremunerated for these costs by increased traffic to the port for which it will receive port dues.
New deep-water oil jetty or CBM/SPM to be installed can accommodate larger mainline vessels up to 80,000 DWT with a maximum draught of 13.0 m.
New 350 m long jetty may be built with a draught of 12.0 m for an LNG floating storage hub atClappenburg Island.
Long term: marina and dedicated cruise berth in front of the city; 360 m long berth dredged at CD -11.0 m to allow for the largest cruise vessels with a maximum draft of 10 m currently in service.
The proposed high income generating projects are as follows
Invite Mega players from worldwide (i,e. Chinese, Singaporean
Keppel/Sembawang, South Korea Hyundai /Samsung) to invest jointly with Sri Lanka and initiate a plan to develop the Trincomalee harbour as an Offshore Construction center focusing on Ship /Tanker conversion / modification to FPSO(Floating Production storage and Offload) units.
Development of Trinco Tank farm as storage /slop reception facility for Super Tankers with future for a super-size graving dock
Initiate development of Offshore Wind Farm Construction can be initiated Promotion of PortCity can be done as the center of excellence in establishing design and digital outsourcing activities and invite local companies to development of Warehousing in Trincomalee. Colombo Corridor for Bonded warehouses
Establishment of an LNG power plant in Trinco to provide power to future Shipyard can also be considered
- The problem I am facing is that nobody wants to take my advise
Regards
Dr Sarath Obeysekera