Asia/Pacific News
Reports: SLPA Set to Exit Bunker Business at Hambantota
The Sri Lanka Ports Authority (SLPA) looks set to exit the bunker business at Hambantota port, a move that would likely see operations turned over to the country's existing private sector players, local media reports.
Speaking to the country's Business Times, the newly elected SLPA Chairman Dr Lakdas Panagoda said for the moment it had stopped the purchase of any further bunker fuel after authorities determined that bunkering at the port had started without the proper planning, and it was set to make a large loss on the operation.
According to Dr. Panagoda, the last bunker purchase was made in December through a broker for $480 per tonne.
He explained that if the market value of the stock was $300 per tonne, even if it sold all the current inventory, the SLPA would incur a loss of $16 million.
Ship & Bunker data shows in early February IFO380 at the port hit a low of $325.50 per metric tonne (pmt), but on Monday had risen to $469 pmt.
Unnamed sources quoted by the Business Times said that "the SLPA had taken on work that they were unable to handle as bunkering was a specialised sector that should have ideally been given to the private sector as in the Colombo port."
The comments follow reports last month that Hambantota port was one of "several projects" that the newly elected government was investigating after coming into power in January.
Bunkering at Hambantota port, also known as Magam Ruhunupura Mahinda Rajapaksa Port (MRMRP), was scheduled to begin as early as May 2011, but after a series of delays eventually commenced in June of last year.
Bunkering operations at the otherwise Chinese funded port were the only part not open to external investment, with all bunkering at the port currently run by Magam Ruhunupura Port Management Company Ltd, which is owned by the SLPA.
In July last year, soon after bunkering had begun at the port, the SLPA told Ship & Bunker that reports of 25,000 metric tonnes (mt) of contaminated, unfit for sale bunkers being delivered MRMRP were "false rumours" intended to discredit the new bunkering operation.
