Govt. opens up LCL and MCC operations to private sector

The Finance and Mass Media Ministry has issued a gazette opening up the Less than Container Load (LCL) clearance operations to private sector liberalising the Multi-Country Consolidation (MCC) and entrepot trade to all players effective from October 1, 2018, albeit certain restrictions.

A couple of weeks ago, Mirror Business exclusively reported that the relevant gazette would be issued shortly by the ministry, liberalising MCC operations, which is seen as a vital step towards the realisation of Sri Lanka’s aspiration to become a maritime hub in the Indian Ocean.

According to the gazette, Sri Lanka Customs has been authorised to appoint Inland Clearance Depots (ICD) to handle import, export and transhipment, including MCC involving LCL. 

The approval to establish ICDs would be granted by the Finance and Mass Media Ministry, which would be published in a gazette by Sri Lanka Customs. 

However the ministry has imposed several entry restrictions including a minimum investment requirement of Rs.500 million, TEU traffic availability of 500 TEUs per month (two ways) and ICD land requirement (land and warehouse ) of 125,000 square feet. 

Further, the gazette stated that ICDs should be located within a reasonable distance from an  international port or an airport, which would facilitate the movement and handling of cargo during 24 hours in all seven days of the week.

The annual licence fee is set at Rs.0.5 million and the application fee is Rs 100,000. 

Shippers’ Academy Colombo CEO, Rohan Masakorala said that liberalisation of the MCC business will enable Sri Lanka to compete with leading MCC hubs such as Hong Kong, Singapore and Dubai, given Sri Lanka’s advantage in connectivity and price competitiveness.

He predicted that the country can expect a turnaround in this sector in about a year’s time, following the liberalisation.  MCC operations were opened up for a short period in the late 1990’s, but was shut down due to security concerns related to the civil war and some illegal activities carried by certain individuals.