By Rohan Masakorala - From Daily FT
Last week we saw the exporters and importers of this country
being held to ransom by few organised truckers by blocking the movements into
the main port of Colombo and disrupting container movements.
The loss to the economy for the 24-hour shut down will never
be officially calculated, but will run into millions while also disrupting the
supply chain, to say the least.
Free market and competition
We are into business in an economy which has embraced free
market and competition, and the business of ports should be transparent and the
most competitive as the local exporters, manufacturers and consumers can be
directly affected if the Government doesn’t ensure fair play when offering
opportunities at an institution that
play a vital role in the economy.
Given the importance of the port sector, I have been
clamouring for many years to get an independent ombudsman to be appointed to
regulate the activities of the port to ensure a transparent competitive
environment is created for businesses to engage in activities with the port.
It is very clear that there is an organised group within and
outside the port to monopolise its transport activity. Around 6,500 to 8,500
movements happen daily to and from port. This includes import, export and empty
container movements, cement, flour and others.
The monopolistic environment
In the past the Ports Authority security and permit division
used to issue annual or monthly permits, but last year I discovered that to
renew or to get a new permit, the applicant had to go to the Ministry, where
even the SLPA Chairman cannot authorise a permit. I as a former Director of
SLPA saw this as a joke, but realised that this was a serious issue which in my
mind without any doubt was an opening created for red tape and big corruption.
The then Ministry has had no reason or any discussions with
the trade why such an inconvenient mechanism was introduced. Talking to the
sources in the trade it was understood that on one side officials and port
employees along with existing trucking organisations wanted to monopolise this
business of transporting goods to and from the port. Hence working in hand in
glove all have benefited in this so-called group which acts as a mafia at the
cost to the exporters, importers and the consumer.
Bribery has been rampant, costing some truckers as much as
Rs. 200,000 per annum for renewal and for a newcomer as much as Rs. 1 million,
according to reliable sources. Some truckers were happy to pay this as it
helped them to retain the monopolised environment.
Under whatever circumstances, last week we saw when new
permits were issued, the monopolised group did not want more competition coming
in. They held the exporters and importers to ransom until the courts
intervened. It is time that the exporters and importers take this matter to the
Government as they are the ones who are finally paying corruption and bribery
money.
In a meeting with the former leadership of the Ports
Authority who introduced online bill payments for exporters and importers,
which was a very positive step, I suggested that permits also be made online.
But it seems that the then Ministry was not keen to provide this trade
facilitation and the SLPA was hence reluctant to move forward.
A better way of trade facilitation is expanding automation
I propose and suggest to the new regime that the container
transport business to and from the port should be fully liberalised. Even a
small-timer who wants to buy a lorry and who can canvass business from an
importer or an exporter should have the freedom to obtain a port permit. This
is an example of proper income distribution, not for a few big people to
dominate. It will also enable market forces to decide the best import/export
transport rates. The fact remains that the industry has not seen much or any
reduction in container transport prices although diesel prices have been
revised many times in recent months.
The simplest way in this modern day and era is to make
permits an online application platform of the SLPA through automation, so that
transaction cost too would further reduce. It is only on an annual basis the
said truckers should submit to SLPA the Inland Revenue licence, health
certificate of the vehicle, Police clearance for driver/cleaner and any other
relevant documents.
To further enhance credibility and security of the vehicles,
like in any other developed port, the SLPA can introduce e-tags and scanner
barcodes as it is reported that in some instances unscrupulous truckers use one
permit and use many trucks by switching/duplicating the number plates of the
vehicles, which reduces revenue to SLPA and compromises security.
I wish that the said line ministries and authorities will
open their eyes and take this opportunity to introduce online port permits and
stop these rackets and show good administrative governance in practice.
The shipping industry must also play a positive and an
active role in enhancing trade facilitation and demanding better services from
port operators.
(The writer is the CEO of Shippers’ Academy Colombo, an
economics graduate from the Connecticut State University USA,
senior consultant Ports and Aviation- SEMA, past chairman
Sri Lanka shippers’
Council, former director of SLPA & immediate past
secretary general of the Asian Shippers’ Council.)
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