Dr Sarath Obeysekera

Shipyard in Mutwal Fishery Harbour

Government is vigorously promoting boat building industry in Sri Lanka and appointed a dedicated state minister to support the industry. Export Development Board has also established a cabinet approved Advisory Board to develop Marine Industry with emphasis to further assist nautical tourism and ministers but the support is lacking.

Government and banks are also not supporting the industry because the importance has not been clearly understood.

As the CEO of a newly established shipyard in Sri Lanka I decided to highlight the woos related to difficulties of the boat building fraternity who are  struggling  with myriad of obstacles.

Question

What are the difficulties faced by you as a boat builder ?

Answer

Walkers Colombo Shipyard is the second shipyard in Sri Lanka next to Colombo Dockyard which handles large scale shipbuilding.An abandoned fishery  harbour was leased out where a state of the art shipyard has been built with expectations to get state support vis a vis relaxations in local bureaucratic rules and regulations governed by the outdated Boat Building Ordnance  in Sri Lanka.Several meetings were held with EDB and the Minister of boat building and sought speedy solutions .Director Merchant Shipping  ( DMS) which is the custodian of the outdated Boat Building Ordnance need changes to suit today’s requirements but action is quite slow due to bureaucracy.

DMS has also added more bureaucratic rules by imposing a new code called SCV (Code of safety for Small commercial vessel Code) engaged in Sri Lankan waters which seems like doubling up the bureaucracy. Generally a boat built in Sri Lanka or abroad should carry a Certificate of Seaworthiness issued by a Classification Society like  Lloyds ( UK)  ,DNV/GL  ( Norway/Germany ) , IRS ( India) ABS ( USA) , NKK ( Japan )  Rina ( Italy )  which DMS uses as a basis and issue another certificate to use in Sri Lankan Waters .This procedure has  now  become more cumbersome because DMS does not depend on the certificate issued by  Classification Societies ,but re impose more rules under SCV code which not only delays the deployment of a boat built in Sri Lanka ,but also make then costlier.  DMS which is understaffed and also having a very stringent mind-set keep visiting the boat builder imposing more rules and delay deployment to generate income. In order to overcome these problems EDB with the help of the Advisory Committee have proposed to establish a  Regulatory Frame work based on single local rule book formulated on the basis of conditions stipulated in SCV codes and Classification Rules .At a meeting held with the new state minister, it was agreed that the authority of DMS is vested to function under the new ministry and Regulations based of newly established rules to be imposed on boat building and boat yards.

Sad to say that this action is at standstill as the enthusiasm of the government is somewhat lacking.

As per the latest budget proposals ,importing of boats older than two years has been curtailed by imposing additional taxes with a view to support local boat  building but we cannot see any development in that sector.

Regarding the issues faced by our shipyard, the Fishery Harbour owner where the shipyard if located is trying increase the lease rental and contemplating to evict the investor citing low lease rental paid .Sadly government has not understood the importance of the Boat Building Industry and trying to milk the investor which may lead to the death of the shipyard .Many letters were written to the top level of the government to intervene and help but action is not foreseen.

Second issue which the shipyard is facing is with the Banks in Sri Lanka, repayment of the loan taken by the local investor to build the shipyard is defaulted due to lack of business hampered by the bureaucracy, and the banks have taken court action to acquire assets and kick the investor out.

Very soon the shipyard may be closed down unless government extends helping arm to resurrect the industry.

Question

What are the specific issues related to rules imposed by the  Central Bank lately?

5000 ton capacity steel dump  barge waiting for deployment

Answer

Shipyard has been awarded the repair of a large heavy capacity barge which was used to carry 5000 tons of agregate from India to Maldives .The barge named Sea grace which has turtled in Maldivian waters upside down was returned and towed to Colombo by the Malaysian Owner  and Walkers Colombo Shipyard has been entrusted to repair, The work has been completed but the owner is unable to take the barge away due to restrictions  imposed on travel for the  crew and the owners and offered the shipyard to buy the barge for one tenth of the value and use it in Sri Lanka to generate income .The price quoted was mere 150,000 US dollars and company approached the banks to allow transfer of the funds which is provided by another local JV investor .Bank has informed the shipyard that transfer of money is prohibited by the Central Bank and shipyard has been told to get permission from the Central Bank and Import and Export Controller .
We have written a request letter to Central Bank and our officers were not even allowed to meet the officer concerned and request was left at the reception. Officer concerned  has been contacted and we  informed that we are export oriented industry and we have to generated large sums of foreign currency to the country and requested a  speedy solution.

Three days have gone but Central Bank is sitting on the request claiming that the request has to go to a committee.

Can you imagine that such a relatively small amount of Dollars cannot be transferred for a legitimate business due to such unnecessary rules?

Banks are also not keen to help and convince the Central Bank to help.

If the barge is acquired by the Shipyard and put to use in Sri Lankan Waters, enormous amount of  foreign currency can  be generated

We are waiting! 

Question

What are the other issues faced in Development of Marine Industry and nautical tourism?

New Yacht lifting dock confiscated by Ceylon Fishery Harbours Coproration for delayed payment if lease in Trincomalee

Answer

There are few Fibre Glass Yacht manufacturers in Sri Lanka who have made a name in International market Launching space of boat built for export  is lacking, Most of the protected waters and owned by Fishery Harbour Corporation or Sri Lank Ports Authority ,who have no interest in helping the boat builders .Despite the requests by the industry to allocate part of the 20 harbours around Sri Lanka  to be used ad Mini Marinas for launching and operating in Sri Lanka .government turned a blind eye.

Few months back the representatives of Boat Builders met HE the President and emphasised the need to build a launching pad in Beruwala where clear instructions were issued to build a boat launching pad for boat builders .State minister took the initiative and entrusted the task to Sri Lanka Navy .Due to political issues and protests by fishing community building of launching pad is in abeyance.

Sri Lanka Ports Authority has been struggling to build Marina and Galle several tenders were called from local and foreign investors but the conditions stipulated in the Request for Proposal were not investor friendly and the Galle Marine seems like a dream.

Despite several articles in the national press government is not been convinced about the importance of development Nautical Tourism which can boost boat building industry and tourism in Sri Lanka.

Shipyard has been far ahead getting ready for Marina Development and built a 100 million Rs worth Yacht Lift ( picture above)  which is now anchored in Trinco ,because Ceylon Fishery Harbour Corporation has confiscated for delay of lease of just 6 million Rupees.

What a waste ?

Question

What the other areas of Marine Sector Development which need attention ?

Answer

Being the chairman of advisory committed under EDB I have been promoting development of Marine and Offshore Industry in Sri Lanka ,with emphasis to use Trinco Harbour as the nucleus .A detailed concept paper with a specific plan to develop the Offshore Industry has been submitted to the Presidential Task Force on Economic Revival and Poverty Eradication under the able chairman Basil Rajapakse.more than six months ago .Despite reminders sent thru EDB ,government has not been convinced about the importance of developing the Marine and Offshore Industry with a view to support Mannar Gas Development and LNG projects which are coming up .

I feel that the advisors appointed HE president are not providing the correct advice to the government regarding importance of these development.

Question

What is your opinion about development of fishery Sector?                             

Answer

Being a boat builder ,I have been promoting further development of fishery boat development and several proposals were made to Minster of Fisheries .One of the main issue is  40 to 45 feet long  multiday fishing vessels which go out to deep sea for over three weeks ,are not equipped with ice making or refrigeration facilities ,The boat  owners who spend about 15 million rupees to build conventional fibre glass boats of this size  and sail out with charged batteries to provide power in the night and without generators to run  ice making plant .but carry tons of ice blocks to cool the fish which are caught .By the time these boats return to shored 70% of the fish is rotten and we consume the same with no idea about the quality.

Ministry of fisheries imposed a rule to build longer and bigger boats because there is lack of space in fishery harbours to berth smaller boats.

Boat owners can afford 15 million Rupees  to build a new smaller boat which does not have space for ice plants, but building a bigger boat is not within their financial capability hence there is a reluctance to build bigger boats

We proposed to develop few large Fish Collector Vessels with all the facilities to help small boat owners to preserve the catch until it is brought to shore

Government tried to develop the Fish Collector concept but certain malpractices within Fishery Ministry ,the project was shutdown .

There is much to be done for existing fishery industry rather than building more and more fishery harbours which accommodates only  small primitive fishing boats .

Question

What is your final advise to the government ?

Answer

Simple .Appoint right people with unblemished record of integrity to the right place with no hidden agenda.