Dr. Sarath Obeysekera 

Lessons from Hambantota and the Way Forward

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1. Executive Summary

Sri Lanka’s strategic location along the East–West international shipping route presents a unique opportunity to develop a high-value marine and offshore industrial economy, rather than relying solely on port-based logistics and transshipment activities.

In 2015, a comprehensive proposal was submitted to develop a Hambantota Dockyard Project, aimed at ship repair, conversion, and offshore services. The proposal demonstrated strong technical, economic, and strategic merit. However, the absence of a national marine industrial policy and delays in institutional decision-making resulted in the opportunity not being realised in its intended form.

This paper outlines:

• What the Hambantota Dockyard proposal achieved conceptually
• Why marine industry–led development is superior to port-only models
• How Sri Lanka can still recover this opportunity through a national, multi-location marine & offshore strategy

2. Strategic Importance of Marine & Offshore Industries

Ports generate value only when anchored to industry. Globally successful maritime hubs such as:

• Dubai (Drydocks World)
• Sohar (Oman)
• Singapore

derive the majority of their economic value from:

• Ship repair & conversion
• Offshore engineering
• Marine fabrication
• Skilled technical services

These sectors generate:

• Continuous foreign exchange earnings
• High-skilled employment
• Strong backward linkages (steel, welding, coatings, logistics)

3. The Hambantota Dockyard Proposal – What It Got Right (2015)

The Hambantota Dockyard Project proposed in 2015 was industry-led, not asset-driven.

Key strengths:

• Location: ~10 nautical miles from the main East–West shipping lane
• Natural deep water suitable for 300,000 DWT class vessels
• Availability of ~50 hectares of contiguous industrial land
• Integrated connectivity (port, airport, highway, rail)

Proposed facilities:

• 300,000 DWT dry dock
• Floating dock
• 1.5 km quay length with four berths
• Phased development:
  • Phase I: Ship repair & conversion
  • Phase II: Shipbuilding and offshore works

Economic impact:

• Approx. USD 400 million FDI
• ~3,000 direct skilled jobs
• Technology transfer and managerial expertise
• Development of a marine industrial cluster

4. Why Hambantota Could Have Competed with Dubai

Dubai’s maritime success was industry-first:

• Drydocks preceded large-scale port expansion
• Offshore conversion created continuous demand
• Marine clusters followed naturally

Hambantota possessed:

• Comparable geographic advantage
• Superior natural depth
• Lower operating costs
• Immediate access to South Asian and Indian Ocean fleets

The key difference was policy sequencing, not feasibility.

5. Lessons Learned (Policy-Safe Analysis)

Without assigning blame, the following structural gaps are evident:

• Absence of a unified National Marine & Offshore Industry Policy
• Overemphasis on port asset utilisation rather than industrial value creation
• Fragmented institutional responsibility across ministries
• Slow investment facilitation mechanisms for complex marine projects

6. Why the Opportunity Still Exists (2026 Outlook)

• Global fleet ageing → increased repair and conversion demand
• Congestion and rising costs in traditional hubs
• Growth in green retrofits, ballast water systems, scrubbers
• Sri Lanka’s existing but underutilised marine skill base

7. Recommended National Strategy

A Tiered Marine Industry Development Model

Tier 1 – Trincomalee

• Heavy ship repair
• Offshore structures
• Floating and semi-submersible docks

Tier 2 – Hambantota

• Large-vessel repair & conversion
• Offshore maintenance
• Green ship retrofit hub

Tier 3 – Modera / Galle / Beruwala

• Yacht and leisure craft MRO
• Nautical tourism support services

8. Implementation Framework

• PPP model with land lease (not port asset transfer)
• Multiple international partners
• EDB-led single-window facilitation
• Vocational and engineering skill pipeline development

9. Conclusion

Sri Lanka’s future maritime competitiveness depends not on ports alone, but on industrial capability. The Hambantota Dockyard proposal offers a proven blueprint that can still be adapted and scaled nationally.

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Prepared by:

Dr. Sarath Obeysekera