Sri Lanka should plan to benefit from War
Posted on April 1st, 2026
Dr Sarath Obeysekera
⚓ Strategic Opportunity: Sri Lanka as a Neutral Maritime Services Hub
My experience at Colombo Dockyard with Islamic Republic of Iran Shipping Lines shows three critical truths:
- War-affected fleets always need repair capacity outside conflict zones
- Neutral देशों (like Sri Lanka) become trusted service points
- Margins are high when capacity is scarce
Why This Opportunity Will Re-emerge
If tensions ease or reconstruction begins:
Iran will need:
- Tanker fleet refurbishment
- Naval auxiliary vessel repairs
- Dry docking outside sanction-sensitive zones
But Today’s Reality Is
Unlike my earlier tenure:
1. Sanctions Environment
- Iran is still under varying levels of international sanctions
- Companies dealing with them must avoid exposure to:
- OFAC
- Secondary sanctions from US/EU
This is the single biggest constraint today
2. Compliance Requirements
Modern shipyards must ensure:
- Transparent payment channels
- Non-sanctioned vessel certification
- Insurance clearance
So the strategy must be carefully structured—not politically naive
Strategic Framework for Sri Lanka
1. Position Colombo as Neutral Repair Hub”
Build on:
- Port of Colombo and Trincomalee
- Existing capability at Colombo Dockyard
Target:
- Commercial tankers (not military vessels initially)
- Third-party managed fleets
2. Develop Trincomalee for Heavy Industry
Leverage:
- Trincomalee Harbour
Potential:
- VLCC / ULCC repair (large tankers)
- Floating dry docks
- Offshore fabrication
This is where scale can surpass Colombo
3. Ship Recycling (Scrapping Yard) – High Potential
Model to follow:
- Alang Ship Breaking Yard
Key requirements:
Environmental compliance
Follow:
- Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships
Waste handling systems
- Oil sludge
- asbestos
- heavy metals
Labour standards
Avoid reputation damage seen in:
- Bangladesh
- Pakistan
If done properly:
- Sri Lanka can become a premium green recycling hub” (higher margins than low-cost yards)
Business Model (Your Experience Scaled)
Based on your figure (~$1M per tanker):
Scenario:
- 10 ships/month = $10M/month
- $120M/year (repairs alone)
Add:
- Recycling
- Fabrication
- Offshore support
This becomes a $300–500M maritime cluster
Strategic Advantage Sri Lanka Has
1. Neutral foreign policy
- Not seen as hostile by Iran, India, or West
2. Geographic position
- Near major shipping lanes
3. Skilled workforce
- Proven capability from Dockyard legacy
Risks We Must Address
Sanctions exposure
- Must use legal structuring
- Possibly work via:
- third-country operators
- non-sanctioned vessels
Political inconsistency
- Investors fear policy reversals
Port authority bottlenecks
- As you’ve seen in Trincomalee
Practical Way Forward (Action Plan)
Step 1: Cabinet-Level Policy
- Declare Neutral Maritime Services Strategy”
Step 2: Create Special Zone (Trincomalee)
- Separate regulatory framework
- Fast-track approvals
Step 3: Invite Strategic Partners
- Japanese (your proven link)
- Korean shipbuilders
- Middle Eastern tanker operators
Step 4: Compliance Shield
- Dedicated legal & sanctions advisory unit
Final Insight
Your instinct is exactly right:
War does not only create destruction—it creates floating assets that must be repaired somewhere safe
Sri Lanka’s opportunity is not to take sides—but to become:
the workshop of the Indian Ocean
Regards
Dr Sarath Obeysekera