Sri Lanka Port Hums Again--for How Long? : Shipping: Colombo was crippled from June to August as workers obeyed a strike call by the People’s Liberation Front. The regime sees business as usual in 1990.

Colombo Port, traditionally one of the busiest in South Asia, is again buzzing with activity after having been paralyzed this summer by rebel-inspired strikes.

Officials are pressing ahead with ambitious expansion plans and cutting the fees they charge shippers to revitalize the port and support Sri Lanka’s war-ravaged economy.

But shipping analysts worry that the government’s efforts may not be enough to reassure merchants, who prefer to do business in calmer places.

The port was crippled from June to August, as workers obeyed a strike call by the People’s Liberation Front. In that period, many foreign ships bypassed Colombo, and export shipments vital to Sri Lanka’s economy were delayed.

But the strikes petered out by September, and port work has returned to normal, said Vas Gunawardene, chairman of the Ports Authority.

He said two new shipping lines plying through Colombo, coupled with Sri Lanka’s deregulation of export shipments, should boost the port’s business.

Gunawardene also said he had traveled overseas recently to reassure clients that the port facilities are reliable. His job was made difficult by the escalating political violence in Sri Lanka that has claimed the lives of foreign business people as well as hundreds of Sri Lankans.

Aside from its conflicts with the People’s Liberation Front, the government is locked in a fierce struggle with the Liberation Tigers of Tamil Eelam for control of Tamil-dominated areas of the country.

“There were many apprehensions about the situation here,” Gunawardene said. “Shipping companies were worried about the continuity of stability. I was able to allay their fears.”

Gunawardene predicted Colombo’s cargo handling would fall by 8,000 containers this year, from the 1988 figure of 638,000. But he said volume would pick up in 1990.

“Business next year is expected to improve, and in the year 2000 we are aiming for 1.4 million containers.”

He added that a third container berth would be built in Colombo by 1992 to increase capacity.

Tommy Ellawala, chairman of the private Sri Lanka Shippers Council, added that the port’s activities were expected to increase because the government announced Dec. 1 that Sri Lankan exporters can use any shipping line.

Exporters had previously been compelled to give preference to the state-owned Ceylon Shipping Corp., a policy criticized by foreign shipping lines.

Port officials said Contiship, which runs a world service through New Zealand and Australia, began using Colombo’s port last month. They said the Soviet Union’s Blacksea Shipping Co., which carries tea and rubber, would start operating here this month.

Gunawardene also said various port charges were cut by 50% this month to attract more ships.

However, shipping analysts said that the port remains vulnerable to rebel strikes and that the government’s forecasts of rising business may be too optimistic.

Government officials said rebel activity has diminished since the leader of the People’s Liberation Front, Rohana Wijeweera, was killed here Nov. 13. But the fighting continues.

One shipping expert, who declined to be identified, said: “For the moment, the port is working OK. But if strikes occur once again, Colombo would have a more difficult time retaining its image as an efficient and productive port.”

Mahinda Ratnayake, general manager of Ceylon Shipping Lines, said the volume of export cargo is unlikely to increase in the near future.

“More ships could come, but they will share the same cake,” he said, adding that export tonnage had been flat in the past few years.

Colombo’s port was dealt a heavy blow when the American President Lines shifted its trans-shipment center from Colombo to Fujirah in the Middle East.

“That was a large slice of the business: 80,000 containers a year,” Gunawardene said.

Ratnayake, whose Ceylon Shipping Lines is APL’s local agent, said the APL pulled out because of the labor unrest in Colombo Port and because Fujirah had other cost advantages.