Submitted by: Sarath Obeysekera Chairman / Marine & Offshore Engineering Specialist EDB Advisory Board Member

Strategic Inclusion of Trincomalee Offshore Engineering & Marine Hub in the National Export Development Plan (2025–2029)

Submitted by:

Sarath Obeysekera

Chairman / Marine & Offshore Engineering Specialist

EDB Advisory Board Member

To:

Hon. Minister of Industries

Democratic Socialist Republic of Sri Lanka

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1. Purpose

This paper seeks to highlight a critical strategic omission in the draft National Export Development Plan (NEDP 2025–2029):

The absence of a clearly defined high-value offshore engineering and marine industrial development strategy centered in Trincomalee, specifically the proposed development of the Clappenburg area as an Offshore Engineering Hub.

This project has the potential to:

• Attract substantial Foreign Direct Investment (FDI)
• Reverse brain drain
• Position Sri Lanka as an Indian Ocean offshore engineering center
• Generate high-value export earnings
• Support energy security and maritime industrialization

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2. Strategic Gap in the NEDP

The NEDP identifies:

• Marine-based industries (including boatbuilding)
• Logistics and transshipment development
• Port-led industrial growth
• Knowledge-intensive exports
• FDI-linked export expansion

However, it does not explicitly address:

• Offshore oil & gas engineering services
• Offshore renewable energy fabrication
• FPSO conversion and repair
• Subsea engineering services
• Offshore rig repair and marine heavy engineering

While Sri Lanka Ports Authority and port expansion initiatives are mentioned, there is no targeted strategy to leverage Trincomalee’s natural deep-water advantage for high-value offshore engineering activities.

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3. Why Trincomalee is Strategically Unique

3.1 Natural Deep-Water Advantage

Trincomalee Harbour is one of the finest natural deep-water harbours in the world. It offers:

• Deep draft suitable for offshore rigs and heavy marine structures
• Calm waters ideal for fabrication and floating dock operations
• Large available land bank for industrial estate development
• Strategic proximity to Bay of Bengal energy routes

Unlike Colombo, which is primarily a transshipment hub, Trincomalee can become a production-based maritime industrial cluster.

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4. Proposed Development: Clappenburg Offshore Engineering Hub

The proposal submitted through the EDB Advisory Board recommends:

Development of Clappenburg Area as:

• Offshore fabrication yard
• Rig repair and refurbishment center
• Subsea structure manufacturing facility
• Offshore renewable (wind) foundation fabrication base
• LNG and marine energy service zone

This aligns directly with:

• NEDP Strategic Objective 1 (Logistics & Hub Operations)
• Strategic Objective 3 (Export-oriented FDI)
• Strategic Objective 6 (Skills & Innovation)

Yet it remains unrecognized as a national flagship project.

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5. Economic Impact Potential

5.1 Foreign Direct Investment

High-value offshore engineering projects typically attract:

• USD 200–500 million initial FDI
• Technology transfer partnerships
• Global EPC contractor participation

Countries such as:

• Singapore
• Vietnam
• Malaysia

have leveraged offshore engineering to move from low-value manufacturing to high-value marine industrialization.

Sri Lanka can follow a similar pathway.

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5.2 Brain Drain Reversal

Sri Lanka produces:

• Naval architects
• Marine engineers
• Welding technologists
• Offshore structural engineers
• NDT specialists

Many migrate due to lack of high-value domestic projects.

Establishing an offshore engineering hub would:

• Retain skilled engineers
• Create high-paying technical jobs
• Encourage diaspora return
• Strengthen NVQ and TVET marine specialization

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5.3 Export Revenue

Offshore engineering services generate:

• Project-based USD inflows
• Long-term service contracts
• Regional Bay of Bengal energy support services

This aligns with NEDP’s goal of reaching USD 36 billion exports by 2030.

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6. Geopolitical and Strategic Relevance

The Bay of Bengal is emerging as a major energy and maritime zone.

India, Bangladesh, Myanmar and ASEAN countries are expanding:

• Offshore gas exploration
• Floating LNG
• Offshore wind

Sri Lanka must strategically position Trincomalee before regional competitors dominate this niche.

Failure to act will leave Sri Lanka limited to low-margin transshipment activities.

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7. Policy Recommendations

1. Immediate Inclusion in NEDP

Explicitly identify:

Trincomalee Offshore Engineering & Marine Industrial Hub” as a flagship project.

2. Call for International RFP

Through EDB and BOI, issue a global RFP for:

• Strategic marine engineering partners
• Offshore yard developers
• Energy EPC firms

3. Establish Special Marine SEZ

Designate Clappenburg as:

• Marine & Offshore SEZ
• With tax and duty facilitation
• Simplified customs regime
• Fast-track approvals

4. Institutional Coordination

Create a Joint Task Force involving:

• Ministry of Industries
• EDB
• BOI
• SLPA
• Ministry of Energy

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8. Conclusion

The NEDP rightly emphasizes logistics, digital exports, and diversification. However, it underestimates Sri Lanka’s potential to move into high-value offshore engineering and marine heavy industry.

Developing Clappenburg in Trincomalee is not merely a regional development project.