Asia/Pacific News
Hambantota to Restart Bunkering to Assist with Debt Repayment
Sri Lanka Ports Authority (SLPA) says it will restart bunkering at the Port of Hambantota and increase vehicle transshipment activities in an effort to help repay debt accrued through loans taken for the port's construction, Sri Lankan media reports.
"It is expected to minimize the pressure to the financial flow at the Port of Colombo through these procedures," the SLPA was quoted as saying.
It is reported that loan installment and interest charges for Hambantota's first stage, as well as interest and commitment charges for the port's second stage, are both due to be paid this year.
SLPA said this was "the main financial challenge" it has to face in the new year.
Bunkering at Hambantota, which had been run by the SLPA, was suspended last year after it was eventually revealed that they had overpaid for a large quantity of low demand product, the quality of which was also questioned - a scenario exacerbated by bunker prices being in virtual free-fall on the back of collapsing oil prices.
The "bunkering irregularity" was said to have resulted in a $19.9 million loss for the port.
While it is unclear if the planned restart of bunkering at Hambantota will once again be run by the SLPA or if it will involve private sector players, last April Ship & Bunker reported that SLPA was urgently looking for joint venture partners to run bunkering services at the Port.
One thing that is clear is that Sri Lanka's Ports Minister, Arjuna Ranatunga, says that the port "has to be converted to a profitable venture."
"The second phase of the Hambantota port is scheduled to be completed by April," said Ranatunga, adding that several investors are already "keen" on investing in the port.
"We also plan to utilise the dockyard and the fuel refinery of the port so as to get the best outcome of the investments," added the minister.
Last month Ship & Bunker reported that bunkering at the country's port of Colombo was prospering having received a boost from an increase in vessel traffic.
