Thursday, February 2, 2017

problems at the Colombo harbor; the most logical solution

The protests we saw at Hambanthota has come to Colombo; from one harbor to another. Protests headlined by leftist political leaders gathered in the streets of Colombo and went through the usual process, marching along the streets with placards, trying to enter the barricaded office knowing well that entry will be denied, pushing temporary barricades and being subjected to  water cannons will end the days episode. 
Leaders would make fierce speeches about selling state resources, imperialism, and many injustices done to poor people, disband and go away. 
Watching this process on the TV reminded me, once asking a manager in the port about two container terminals operating those days in the Colombo port. Jaya terminal was government owned and the other was managed by a private company. I was trying to compare the working of the two to just to get an idea.
I was told, that private company charges about twice the fee for handling of a container that Jaya terminal. Something like 50 $ to 25 $, I am not too sure of the figures, but I remember it was double. So I was curious to know the comparison of number of ships calling to both platforms because according to free market theory no ship should call on private jetty.
Shockingly, the private jetty was receiving more ships despite the much lower fees.  I didn’t get a satisfactory answer for the reason for this inconsistency, but I felt it is the efficiency of the private sector management over that of state.
Now these current protests, I guess,  must be on an extra terminal in addition to those two. So if the government is genuine on looking for best returns for the nation from this asset they should be going through following process.
Asses the income they would get from this new terminal, if they run it. This can be calculated from the financial performance of the jaya terminal 
Estimate the investment needed to build and equip the terminal
See whether project is financially viable for the state to undertake from above two figures.
If viable set up a local syndicate to raise money through financial instruments like bonds, shares etc
If not viable call tenders and hand over the management to internationally reputed terminal operator.
If unions don’t agree tell them to operate the terminal 
This should satisfy even the hardest of the leftists, union leaders or self appointed  patriots, I suppose 

1 comment:

  1. Just enough to offer few posts of advisor to president to trade unionists, Mahinda did it.

    Government bribe SLFP MPs to avoid protest, bribe farmers and gov.officers for same, now no option left for trade unionist to survive, so they pick areas more damaging to economy, so bribing them too may cost effective.


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