SRI LANKA: Suicide Attack on Colombo Port Bad for Business

By IPS Correspondents Reprint | | Print |

Waruna Karunatilake

COLOMBO, Apr 12 1996 (IPS) - Sri Lankan security forces foiled a suicide attack on the high-security port early Friday, but the rebel raiders have upset government efforts at confidence building.

The sea raid at dawn by Tamil separatist guerrillas was detected by the Navy, which destroyed at least two rebel boats, killing all the occupants, military officials said.

Port and Shipping Minister Mohammed Ashraff said the port would get back to normal by late afternoon when the workers returned to their posts.

But the fact that the Tigers could carry out such a brazen attack on the well-guarded port will seriously affect long term plans to make the harbour a transshipment hub for South Asia, industry sources say.

The rebels fighting for a separate homeland for the last 13 years have made several daring attacks on Colombo since last October. On the night of Oct. 20 the Tigers blew up one of the country’s biggest oil storage facilities on the outskirts of the city, taking the war in the north and east to the capital.

This January, suicide bombers drove a truck packed with explosives into the Central Bank building in the heart of Colombo’s business district, killing some 150 people and injuring thousands during the morning rush hour.

The Tiger attacks have crippled the economy. After two years of 5 percent growth, the economy this year is expected to slow down.

“After this attack the Colombo port will be automatically perceived as a terrorism-prone port pushing up insurance costs which would affect freight charges as well,” Ravi Karunanayake, managing director of Rotonvander Freighting, said.

With a Singaporean ship berthed in the port suffering some damage from rocket propelled grenades (RPG) fired by the rebels, a worried shipping industry thinks the cost of insurance could increase by anything between 100 and 350 percent.

“The biggest problem for the port will be the loss of transshipment business. Because of the high insurance costs some of the key shipping lines could start avoiding Colombo,” Karunanayake said.

The Colombo Port handled one million containers last year after increasing its handling capacity to 1.8 million containers with the completion of the final stage of the expansion of the main Jaya container terminal.

The project which took 16 years to complete was financed with a 30 billion rupee loan (a dollar is 40 rupees) from the Japanese government.

“We have to start repaying the loan from this year and we had projected that the port would loose 500 million rupees this year. This is the worst time for us to loose business,” a senior port official, who did not want to be identified said.

Those in the business think it is only a matter of time before the shipping lines divert their transshipment business to Singapore, Bombay or Dubai and bypass Colombo.

“This is not going to just affect the port but the economy at large. Increased freight charges will increase not only the price of imports but also add costs to our exports which would make them less competitive in the world market. The economy is already in a downward spiral and this would add to the problem,” said Savanthi Artanayake, an economist at HDF Securities.

However, an optimistic Minister Ashraff assured reporters hours after the attack that there was no reason for worry. “We will have problems in the short run. But by further increasing security we can win back the confidence of shipping lines.”

The rebels launched the attack in the early hours of Friday, on the eve of the Sinhala and Tamil New Years, the biggest festival for the island’s people.

Port officials said newly installed sonar equipment detected two rebel divers entering the harbour around 5.45 a.m. Sentries fired at the frogmen and dropped depth chargers killing the two. Minutes later a fishing boat entered the harbour firing machine guns and RPG.

Minister Ashraff told reporters that the attack came hours after Sri Lanka’s Air Force had taken delivery of a shipment of arms, including three fighter planes.

According to him the fact that the raid was foiled was proof that “security measures we had taken worked. We think that at

least one RPG was fired at a ship carrying liquid gas but missed the target and hit a vehicle carrier which was slightly damaged.”

He acknowledged that if the RPG had hit its target, “it could have been a disaster.”

Security in Colombo has been tight since the January suicide bombing of the Central Bank. On Monday, the government extended a state of emergency in the war zone and Colombo across the island.

Military analysts think Colombo is preparing for a major battle to regain areas still controlled by the rebels on the mainland and in northern Jaffna peninsula.