Sri Lanka slashed refueling charges at its main port on Thursday in a bid to woo back ships which are bypassing the country to avoid a prohibitive war-risk insurance surcharge, officials said. They said the move was a first step towards liberalizing bunkering operations at the Colombo port, which has been badly hit by the surcharge imposed after Tamil Tiger guerrillas attacked the country's only international airport last month causing an estimated $1 billion in damage.
"From now on fuel will be at sold at Singapore rates which will be 30-50 percent cheaper," said a senior port official who did not want to be identified. He said the move would cut the price of marine diesel to around $175 per ton from the $330 per ton charged by Ceylon Petroleum Corporation, the state-owned oil firm which has a monopoly on bunkering at the port.
"The new prices will go into effect immediately, but it will be some time before private operators can begin bunkering," said the official. He said the liberalization of bunkering had now been approved in principle by the government and that "other measures are also in the pipeline" to make the port more attractive.
The move was announced hours after a high-level industry team headed by the minister of ports left for London on Thursday to appeal against the war-risk surcharge. Shipping industry officials said the country was in danger of losing 60 percent of its cargo capacity after the insurance industry declared
the entire country a war zone. Shipping lines have begun slashing services to the Colombo port, which was attacked by a Tamil Tiger suicide squad in 1996. The war-risk penalties were expected to deal a fatal blow to Colombo's lucrative trans-shipment business which accounted for 70 percent of the 1.7 million twenty-foot equivalent units the port handled last year. - (Reuters)