Chinese-managed CICT, H’tota port stay on growth path in 2020 despite pandemic woes

RORO vessels berthed at Hambantota Port

By Nishel Fernando 
Despite the pandemic woes, China Merchants Port (CMPort) Holdings Company Limited-managed Colombo International Container Terminal (CICT) of the Colombo Port and multi-purpose Hambantota Port continued to remain in the growth path last year. 

In 2020, CICT’s container throughput recorded a 1.9 percent year-on-year (YoY) growth to 2.93 million TEUs, while the overall container volumes at the Colombo Port declined by 5.2 percent YoY, thereby, resulting in an increase in market share for CICT in the year, according to CMPort and the provisional figures of the Central Bank.

In 2020, all other key terminals except for East Container Terminal (ECT), which commenced operations in October last year, posted above-mid single-digit declines in container volumes handled. The ECT, which went into operations with the first quay wall, handled 41,741 TEUs at the end of last year.

The Hong Kong headquartered CMPort in its annual report highlighted that CICT was able to sustain and increase its performance mainly due its focus on attracting more quality routes during the challenging year.

Moreover, CICT also maintained a 99 percent customer satisfaction in their service offerings in the year, one of the highest among subsidiaries of CMPort, reflecting a high level of efficiency and quality in its service delivery to customers. 

Meanwhile, the operator of the Hambantota Port, Hambantota International Port Group (Private) Limited (HIPG), reported a 41.4 percent YoY growth in revenue, reaching HK$ 205 million in the year. In addition, it was able to contain losses to HK$ 123 million in 2020, from HK$ 145 million in 2019.

During last year, the Hambantota Port handled 1.78 million metric tonnes of cargo. In particular, bulk cargo volumes recorded a significant growth of 145.6 percent YoY to 1.24 million metric tonnes, mainly driven by accelerated growth in clinker volumes.

The total number of vehicles handled at the Hambantota Port declined by 6.3 percent YoY to 0.388 million vehicles, which was mainly due to the suspensions of automobile production in plants in India combined with a drastic drop in vehicle imports. However, the port saw a steady recovery in vehicle transshipments since last December up to this April.  

Further, expanding its operations, HIPG last year commenced the fuel oil bunkering services for vessels under new environmental standards.

“Overseas homebase ports adopted a market-oriented approach to enhance service capability and expand value-added services, exerted business synergy and thereby strengthened the strong momentum of development,” CMPort stated.

Meanwhile, CMPort last year introduced Fujian Transportation Maritime Silk Road Investment and Management Co. Limited as a strategic investor to further develop the Hambantota Port. It disposed 20 percent of its stake in HIPG to the strategic investor for US $ 268 million.

“…through which it has optimised its corporate governance structure while maintaining its control over HIPG… Synergies with HIPG will be realised by leveraging on the advantage of resources of its various shareholders both at home and abroad, thereby achieving sustainable development of HIPG in the long run,” CMPort remarked.

Meanwhile, CMPort highlighted that 26 firms came officially onboard to set up their operations in adjoining industrial park to Hambantota by end of last year. The industrial park, which is divided into three clusters, aims to replicate the success of CMPort’s strategic Port, Park & City model, which was first effectively implemented in the landmark industrial zone - Shekou in Shenzhen, China.

HIPG has also expressed intentions to enter into containerisation business in the near future, citing the need to facilitate import/export activities of the industrial park. The move has raised concerns among some industry experts in the country on a potential threat to the status of the Colombo Port as a regional transshipment hub. However, CMPort has dismissed such concerns citing that it would attract new businesses. 

CMPort outlined that it has been focusing on the enhanced collaborated development between HIPG and CICT to elevate them to become world-class shipping centres in South Asia and to increase the influence of its overseas homebase ports.

“In terms of overseas homebase ports, the group will continue to build them into international shipping hubs in South Asia with the focus on both the ports operation by strengthening the cooperation with shipping companies and the revitalisation of HIPG’s existing assets to satisfy the demand of the projects in its industrial parks within the port zone,” CMPort said.