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Sri Lanka Ports Authority Revises Export Tariffs, The recent increase in SLPA tariffs has been a source of controversy for the exporters. Industry stakeholders have pointed to the negative impact of this increase on the exports industry. After all, a large portion of imports are parts and raw materials for exporting products. The impact of the drought and power cuts is already hurting exports and a further increase in SLPA tariffs will only add salt to the injury. This is why the EDB has decided to open the SLPA tariff discussion publicly.
SLPA’s Three-Year Development Plan
The SLPA’s new Three-Year Development Plan will focus on improving customer care by providing more facilities for the maritime sector. The plan takes into account the views of port users, trade unions, and the business community. It will also make necessary improvements in the human resources plan. It is the responsibility of the Ministry of Ports and Shipping to ensure that the organization has the necessary capacity to meet its future demands.
The SLPA has created several pathways to achieving licensure. Students may choose a pathway that focuses on building key SLPA skills and preparing for graduate-level study. Pathways may take anywhere from two and a half to five years to complete. Pathway programs include general education courses that are more intensive than those in the SLPA core curriculum. The program also offers students expanded opportunities to pursue free electives and specialize.
SLPA tariff hike
The SLPA is violating the law by revising its export tariffs. It has also violated the gazette on freight payment. The new rates are in dollar terms, making SLPA the only beneficiary of the depreciation of the local currency. The textile industry is reeling from this unexpected decision and is preparing for another one. The industry considers the decision unilateral and arbitrary. It also says the new rates will hit exporters’ competitiveness.
There are many reasons for the SLPA to postpone the tariff hike. One of them is the fact that it will be difficult to increase the tariffs of a single commodity, and that the proposed hike would be accompanied by a negative impact on the entire economy. While the increase will hit exporters harder than importers, it will also hamper the country’s momentum in export growth. In particular, the National Export Strategy is critical to transforming the country’s economy into an export-driven economy.
SLPA’s relationship with China
The Chinese state-owned enterprise China Merchants Port Holdings has agreed to lease a deep-sea port in Sri Lanka for US$1.5 billion. The Hambantota port, located near the busy east-west shipping lane, has great potential to become a logistics hub. China has already invested nearly US$2 billion in the Hambantota port, and wants to continue investing in Sri Lanka’s infrastructure and economy.
The loan repayments have reduced Sri Lanka’s debt burden, which was low when the port leasing was contemplated. In fact, the debt servicing to China was negligible in comparison to the other financial obligations. In 2015, SLPA received five loans from China Eximbank, totalling 1.26 billion USD. The Chinese lender offered preferential loans at 2% interest. The leased port could begin generating foreign exchange within a few years.
SLPA’s export strategy
SLPA’s upward tariff revision is a highly controversial issue that has created concerns among importers and exporters. However, the SLPA seems adamant on implementing this change even though international trade actors have consistently insisted that the rates should remain unchanged. The Export Development Board, the country’s apex trade agency, has stated that such an increase is undesirable. The import and export industry in Sri Lanka is highly dependent on exports and the implementation of a national export strategy is necessary to help it achieve its goals.
The Sri Lankan Port Authority (SLPA) is currently delaying its proposed port tariff hike until December, after which the committee recommended that it be postponed. The new rates will apply from January 1, 2019, and will substantially increase port charges and related tariffs. As a result, the new rates will have a significant impact on SLPA’s competitiveness as an exporter. However, this move is not enough.
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