The project will help the government develop a national master plan for its port sector, including the restructuring of Sri Lanka Ports Authority (SLPA). The impact of the project will be the realization of the most competitive and preferred ports and shipping destination in the region. The outcome will be harmonized and balanced port development facilitated in the nation. The project has two outputs: national port master plan and technical review of the final design of the port access elevated highway.
The executing agency will be the SLPA. The executing agency will provide policy guidance and national-level coordination in relation to the TA and ensuing projects, and be responsible for managing daily implementation activities. A TA advisory committee headed by SLPA's managing director will be established within SLPA to guide and provide support to the TA team for smooth activity implementation.
PROJECT RATIONALE AND LINKAGE TO COUNTRY/REGIONAL STRATEGY
As Sri Lanka is an island nation, maritime transport is essential for the nation. It is a dominant transport mode for international trade and accounts for a large share of the country's international logistics cost. Low-cost logistics is critical to Sri Lanka's economic efficiency and transition to an export-oriented economy because it affects both the competitiveness of exported goods and consumer price of imported goods of the country. Sri Lanka plays a significant role as a regional transport hub due to its strategic location in the vicinity of major international shipping routes. Ports and shipping are central to the economic ties between Sri Lanka and the rest of the world, including South Asia Subregional Economic Cooperation nations.
Sri Lanka needs to keep strengthening its ports' capacity and competitiveness by improving infrastructure, operational efficiency, and institutions, in order to maintain its role as a regional transport hub despite severe competition with the ports of other nations. The introduction of larger vessels and the emergence of gigantic container shipping line alliances have exacerbated the competition between international ports. Due to Sri Lanka's national economic growth and the rapid growth of international container shipping demand, the country urgently needs to strengthen its port capacity. Being left behind these recent trends will lead to the loss of economic opportunities and growth impediments in the South Asia Subregional Economic Cooperation region.
In spite of the needs for capacity strengthening, the Colombo port is constrained due to the urbanization of and growing congestion in Colombo City. The Colombo port development must cope with urban development on the land side. At the same time, the Colombo port cannot accommodate all development needs due to its limited port area inside the breakwaters. Hence, cargo handling capacity for container, dry bulk, liquid bulk, automobile, and other types of cargo, as well as passengers, needs to be strategically allocated to other ports to alleviate growing pressures on the Colombo port and facilitate national economic growth. Port development direction must be properly determined with full consideration of the economies of scale, the size of the port hinterland, potential demand, and connection to other transport networks. Also, developing local ports is vital for economic growth, and will contribute to addressing the significant economic divide among the regions in the nation.
Efficiency improvement in operations is another agenda in the port sector. The SLPA is a statutory corporation established under the SLPA Act of 1979 as the owner, operator, regulator, and supplier of marine and cargo handling services at the ports. SLPA is complex, large, and inefficient in comparison with other competing international port operators. As of December 2013, SLPA employees are no fewer than 9,900, and around 8,900 serves at the Colombo port. Build -operate- transfer concessions have been applied to some container terminals, which led to alleviation of the financial burden and efficient operations. Further institutional strengthening, including the restructuring of SLPA, needs to be sought with full consideration of a level playing field for all terminal operators, financial strength, efficiency, and competitiveness of Sri Lanka's ports.
Under these circumstances, the preparation of a master plan for the port sector was listed in the Ministry-wise Program of the government in 2015. Given that SLPA recognizes its lack of capacity to develop a master plan, this TA will support the Government of Sri Lanka to develop the national port master plan (NPMP). Also, the TA will identify priority projects, which will contribute to scaling up future ADB interventions in the nation.
The most competitive and preferred ports and shipping destination in the region realized
ADB will engage an international consulting firm through the quality- and cost-based selection method with a quality cost ratio of 90:10. The firm will be selected by full technical proposals. The TA will require about 47 person-months of international consulting services and 20 person-months of national consulting services in total to deliver the TA outputs. The TA consulting service period for the firm will be 18 months. The required experts for the consulting firm will be a senior port engineer, maritime transport specialist, economic assessment specialist, financial specialist, trade facilitation specialist, public administration specialist, environment specialist, port engineer, port operation specialist, information technology specialist, and social safeguard specialist. Individual consultants as reviewers will be recruited for 2 person-months to support the executing agency on technical matters, including validation of deliverables by the consulting firm. The consultants will be engaged by ADB in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). Advance contracting for the recruitment of consultants will be used to expedite the implementation.