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Sri Lanka Declared War Risk Zone, Shipowners to Pay

Maritime Activity Reports, Inc.

August 8, 2001

Sri Lanka Declared War Risk Zone, Shipowners to Pay Sri Lanka said Lloyds of London has declared the country as a war-risk zone which could result in hefty surcharges for ships entering the country's main port and hurt the trade-dependent economy. Surcharges of up to $150,000 could be slapped on larger ships entering Colombo port along with further charges for the amount of cargo carried. "Reinsurers in London have imposed a surcharge on insurance which we feel is completely unreasonable," Minister of Ports Ronnie de Mel said. The move comes after a massive attack at country's only international airport on July 24 by a suicide squad of Tamil Tiger guerrillas, who also launched a less destructive raid on the Colombo port in 1996. Last month's attack destroyed four commercial airliners and many military aircraft at an adjoining air force base, raising insurance premiums for flights to Sri Lanka and prompting airlines to review trips to Colombo. De Mel said he hoped the blanket label by the war-risk rating committee of Lloyds would be revoked soon. "All steps have been taken in the last several years to strengthen security at the port of Colombo," de Mel said. "The incident took place 20 miles (32 km) away," he said, adding that he did not believe there was any risk to ships arriving at the Colombo port. "I think there is a gap between perception and war risk," he said. More than a dozen separatists carried out the attack that caused estimated damage of more than $500 million to the national airline and $30 million to the air force. A Ministry of Defense statement said steps were being taken to increase security at the port, including the deployment of security personnel and the setting up of more watchtowers. Industry officials did not say what impact the surcharges would have on container volumes handled at the port. The port handled 1.7 million TEU last year, with almost 70 percent of that in trans-shipment volumes. Trans-shipment volumes have slipped in the past three years due to stiff competition from regional ports. The country has two other ports which service international shipping, at Galle on the southern coast and at Trincomalee on the east cost. - (Reuters)

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