Sri Lanka - Major boost for maritime related FDIs

 Charumini de Silva

Sri Lanka has been delisting from war risk countries category by the maritime insurer Lloyd’s of London’s Joint War Committee (JWC). This will offer a major boost to the country’s shipping sector which is targeting strong growth over the next few years, industry sources said. Sri Lanka being delisted from the war risk is a significant achievement to the maritime industry as well as for the nation.

This decision will also facilitate a major boost in the Foreign Direct Investments (FDIs) related to maritime sector, Asian Shippers’ Council (ASC) Secretary General, Rohan Masakorala told Daily News Business.
He said premium related shipping lines will benefit much from Sri Lanka being delisted from war risk countries.

The war risk surcharge which was added to insurance policies for companies operating in Sri Lanka will be reinstated.

Exporters, importers, shipping lines and all stakeholders in maritime market will get better deals in the future.
Sri Lanka is expecting an increased number of ships arriving in the country and with the removal it creates a good signal to the country’s economy. The war risk surcharge on Sri Lankan shipments removal will be well received by the Government whose aim to develop the country’s status as a key transshipment hub for goods crossing on Asia-Europe routes.

The upcoming new container port facility at Hambantota is aimed at creating a strategic destination, which BMI believes will greatly increase Sri Lanka’s competitiveness as a major destination for large container vessels. BMI also expects the country’s container shipping sector to experience strong growth over the next few years.

Sri Lanka Ports Authority (SLPA) Managing Director Nihal Keppetipola said Sri Lanka having no additional war risk insurance premiums on country’s ports will increase the trade, Foreign Direct Investments (FDIs). It will also have a tremendous opportunity to develop business in the Northern and Eastern provinces.

The decision will also support the Colombo South harbour and the Hambantota port to give a healthy competition to the other posts in the South Asian region and it will be a better opportunity for Sri Lanka to be the hub in the region, he said.

Previously Sri Lanka’s war risk was at 3.4 percent and with the restoration of peace it was brought down to 2.6 percent and now the country has been removed from the risk area, which will uplift the maritime and the entire economy of the country.

The Lloyd London’s JWC has scaled the risks in the other South Asian countries such as India at 3.1 percent, Pakistan at 5 percent and Bangladesh at 3 percent.

source - www.dailynews.lk