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Ceylon Shipping Corporation turns tables on its financial performance

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Reports loss reduction of Rs. 1.15 billion in two years

Posts Rs. 636 million profit in fist 8 months of FY 2021/22

If CSC’s fleet size is increased, country can save millions of dollars spent on ship chartering, says chairman

by Sanath Nanayakkare

The Ceylon Shipping Corporation (CSC) has made an impressive turnaround in its fortunes from a loss-making State Owned Enterprise (SOE) to a profit making SOE within two years.

In the Financial Year 2020/21, CSC has posted a profit of Rs. 636 million in the first eight months of financial year 2021/22 , changing the situation completely different from the losses it made in 2018/19 (Rs. 1,523 million) and in 2019/20 (Rs. 1,085 million) which had caused problems for them.

CSC Chairman, Wineendra S. Weeraman, told The Island Financial Review that the profit curve of CSC was a well thought out one.

“When I assumed duties as chairman of CSC in December 2019, nobody was interested in taking over the helm at the CSC under such dismal financial circumstances,” he said.

Weeraman said that he first gave priority to settling a loan of USD 75 million taken from the People’s Bank by the previous management for purchasing two ships.

“This loan was on a Treasury guarantee and I decided to clear all arrears because I didn’t want to carry it forward paying a huge interest on the loan capital. In the accounts, I saw that we had an outstanding payment amounting to Rs.1,400 million which had to be collected from Lanka Coal Company – the procurement entity of the CEB. Through an official process, I was able to recover these funds and use it to repay that loan. Whatever I had to pay I paid and I took the decision to charter out our ships at the opportune moment despite the threat of Covid-19. Those were the key decisions I took and that is how we are making profits now,” he said.

Further speaking he said:

“Currently the main business of CSC is delivering coal to Norochcholai power plant. In this connection, CSC deals with Lanka Coal Company and the Ceylon Electricity Board (CEB). The CEB charters our two bulk carriers ‘Ceylon Breeze’ and ‘Ceylon Princess’ each with 62,000 deadweight tonnage, to bring in coal to Sri Lanka from South Africa. The CEB pays us in Sri Lankan rupees when they charter our vessels, but when they charter foreign vessels for the purpose, they pay in US dollars.”

“CSC brings in one third of the total coal requirement for Norochcholai Power Plant. We can help save a massive amount of US dollar payments made as ship chartering costs if CSC has its own fleet to deliver the entire requirement of coal.”

“At the height of Covid-19, despite concerns among experts that we should keep the two ships at anchorage, upon verifying of IMO regulations and the advice of Harbour Master and Medical Officer of the Sri Lanka Ports Authority, I decided to send our ships to sea and bring in much needed foreign currency to the country, without leaving the ships idling at sea incurring losses for six months. With that operation, we were able to bring in 3 million USD within about 6 months.”

“When we charter a ship to transport coal to Norochcholai Plant, procured through Lanka Coal Company, the charter hire alone costs between US$ 1.3 million and 2.0 million on top of other costs for each charter. If we have another four vessels in our fleet, we can prevent this foreign currency outflow happening time after time.”

“If we bring the fleet up to six vessels with a tanker or two, we can bring in the entire supply of coal, rice, sugar and even petroleum products without chartering international vessels over an infinite number of years. How many millions do we pay for transportation of fuel and other commodities? Being the purchaser of these products, we should be able to dictate the terms of their transportation. We can ask them to use our vessels. If the government says all fuel imports to Sri Lanka needs to be carried on CSC vessels, then we can save a lot of millions of dollars.”

“The policymakers of the government should support us in this regard. They should support key government organisations such as CSC and put some muscle into its capacity to make it more productive in its operations and empower it to support the economy of the country in a more robust way. We have made requests to policymakers pertaining to this objective including the former chairman of CSC who could assist us in fund arrangement,” he said.

“CSC’s annual turnover is about Rs. 3.8-4.0 billion whereas Sri Lanka Port’s Authority’s annual turnover is about Rs. 55 billion. Comparatively speaking, CSC is also contributing to the economy in a notable way with the limited resources it has. The CSC has great potential for growth if it gets the necessary policy support.”

“CSC employs 125 staff in-house. On each vessel we have about 22-23 crew members – that’s about 46 on both vessels and we have a reserve pool of crew for crew changes. Our salary structure is very competitive with that of international shipping lines. We pay a ship master about USD 8,500- 9000 per month. We have to pay such salaries to ensure deployment of qualified and skilled people on board our vessels. However, the upside here is that the entire crew is Sri Lankan”.

“Before Covid when we chartered out our ships to international parties during the off-season, we earned USD 8000-13,000 per day per ship. With the spread of initial Covid wave, these prices came down to USD 6,500-7,500. After the second wave of Covid, the freight rates skyrocketed to about USD 35,000-40,000. So this is the best period for the global shipping industry and we should make the best out of this situation for CSC.”

“The greatest difficulty we have with the CEB is that we fight with them to get priority to us in charter services and they also prefer to give it to outsiders upon finding one single fault that could easily be rectified. And even after providing the services for them, they take months and years to pay our dues. Then we can’t operate maintaining a positive balance sheet.”

“I would like to urge the policymakers and top officials to take bold policy decisions to beef up the fleet of CSC.”

Talking about his future plans he said:

“There are several projects which I intend to start here. There were negotiations in 2017 – with Bangladesh Shipping Corporation to operate a feeder service here. If you take Port of Colombo, its capacity is 7 million TEUs. In Bangladesh it is 3.5 million. Twenty percent of their cargo is coming to Colombo. That is about 700,000 TEUs. Bangladesh ports are very congested. Ship owners don’t like to go there because it takes days to reach a terminal. If we sign this bilateral agreement, they are going to save on the number of days spent on transportation of their cargo. If we can sign it, CSC will be able to earn about USD 2 million per year. The SLPA also will earn from it when TEUs are brought to the Port of Colombo. It will be a win-win-win situation for all parties.”

“Bunker prices are very high here compared to Singapore. Sometimes we don’t get the bunkering business unless the prices fluctuate in a competitive manner to ship operators. If we supply them bunker off-shore or out of the port, they will prefer to get oil at a lesser price. I have submitted a proposal for a floating bunker as well.”

“And then the ferry service between Colombo and Tuticorin which was started in 2011. I am planning to resume this service. Not only Tuticorin, we can try various other ports in India.”

“Going further, I have a plan to arrange medium size cruise vessels between Colombo, Male and Goa. If we arrange these tours then everybody will find them exciting and enjoy these tours bringing us revenue.”

“CSC wants to get involved in passenger transportation as well. I have signed an agreement with Sail Lanka Yachting Group, a global company that builds yachts in Sri Lanka. They are already operating from the Colombo Port City Marina. They have agreed to manufacture bigger ships to partner with CSC’s plans for passenger transportation.”

“These are plans for the future and I have submitted them to the policymakers. If we want to make a maritime hub here, these things should be facilitated.”

“Ship repairing is another area. I also wait in queue to get CSC ships repaired. In addition to Colombo Dockyard, we need to build another dockyard, ideally in Trincomalee.”

“Finally, We need to be mindful of Sagarmala Programme which is underway in India targeted to culminate by 2035. It is designed across areas of port modernisation, new port development, port connectivity enhancement and port-linked industrialisation. One day it is going to affect us. So we need to equip all critical installations here to stay in the business and thrive in the new maritime sector emerging in the region. I appeal to the policymakers and top officials of the government to support CSC with bold policy-making for its exponential growth, bolstering key business verticals of the industry at the same time.”



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Jaffna Teaching Hospital secures lifeline water supply via ADB-funded Thalaiyadi sea water desalination plant

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The project represents a major financial investment coupled with rigorous environmental management to protect the surrounding coastal ecosystem

It marks Sri Lanka’s first-ever large-scale SWRO desalination plant

By Sanath Nanayakkare

The Asian Development Bank (ADB)-funded sea water reverse osmosis (SWRO) desalination plant in Thalaiyadi has delivered a crucial operational boost to the Jaffna Teaching Hospital, securing a reliable supply of purified, low-calcium water for critical medical care and specialized equipment.

Speaking during a site briefing with ADB officials headed by Country Director Shannon Cowlin, National Water Supply and Drainage Board engineers, and media representatives, Hospital Director Dr. T. Sathiyamoorthy confirmed that a dedicated supply line from the plant was successfully connected earlier this year following three years of planning and requests.

With a 175-year legacy of excellence, this 1,550-bed facility serves as the premier healthcare institution in the Northern Province. Currently providing specialized services—including neurosurgery, open-heart surgery, kidney transplants, and bone marrow transplants—the hospital is positioning itself for elevation to National Hospital status under Ministry of Health guidelines.

Operating across a sprawling 13.5-acre compound, the institution functions much like a self-contained township, managing a massive daily footfall that underscores its role as a vital regional lifeline. The hospital accommodates over 1,500 in-patients on any given day, while its outpatient services face a relentless stream of visitors. Daily arrivals typically include 900 to 1,000 OPD patients, accompanied by up to 2,800 clinic visitors distributed across more than 30 specialized medical and surgical units.

When factoring in the wider operational ecosystem, the total daily population within the compound swells to approximately 10,000 people. This high-volume environment is sustained by a dedicated workforce of 2,400 healthcare professionals, alongside a daily influx of over 3,000 visiting relatives who pass through the facility to support recovering patients.

The Thalaiyadi seawater desalination plant

For decades, the hospital’s reliance on local groundwater presented severe operational bottlenecks. Jaffna’s limestone-heavy geology yields water with high calcium concentrations, causing severe mineral build-up that damaged millions of rupees worth of high-value equipment ranging from large-scale sterilizers to delicate endoscopic instruments.

The introduction of low-calcium desalinated water has immediately safeguarded key operational areas. The initial phase of the connection delivers purified water directly to high-priority sections, including operating theaters, intensive care units (ICUs), and main entrance public drinking facilities.

While the hospital’s total assessed daily demand stands at 1,500 cubic meters, desalinated water currently covers approximately 30% of total usage. The remaining 70% continues to depend on legacy systems due to internal piping networks that are nearly 60 years old. To resolve this, hospital management has floated tenders to overhaul internal distribution lines, enabling pure desalinated water to reach all wards.

Jaffna Teaching Hospital Director Dr. T. Sathiyamoorthy and ADB Country Director Shannon Cowlin during a meeting at the hospital premises

Engineers confirmed that the SWRO plant operates with a capacity of 24,000 cubic meters per day, guaranteeing ample volume for full hospital coverage. Furthermore, the ADB is structuring a new municipal wastewater treatment project for Jaffna, which will integrate the hospital and replace its aging internal waste treatment system.

Dr. T. Sathiyamoorthy stressed that clean piped water is vital to public health in Jaffna, where groundwater remains vulnerable to agricultural fertilizer runoff, commercial effluents, and historical pollution concerns such as the Chunnakam oil contamination incident. He noted that encouraging piped water consumption also reduces dependence on single-use bottled water, which risks microplastic degradation when exposed to the region’s intense heat.

The Thalaiyadi seawater desalination plant represents a major financial investment coupled with rigorous environmental management to protect the surrounding coastal ecosystem. Financially, the project carries a total capital cost of USD 55 million, anchored by a primary contract valued at LKR 14,559 million—structured across multiple currencies including USD 49 million, EUR 15 million, and INR 314 million, alongside local allocations.

Awarded to M/s Suez International under a comprehensive Design, Build, and 7-Year Operation framework, the project involves an operational expenditure of USD 0.55 per cubic meter, with management scheduled to transfer to the National Water Supply and Drainage Board (NWSDB) following the completion of the operational term in October 2031.

Simultaneously, extensive ecological safeguards have been integrated into the facility’s design to mitigate marine disruption. The offshore intake system is positioned away from sensitive habitats and utilizes low-velocity grilles to prevent fish entrainment, safeguarding the interests of the local fishing community. Furthermore, waste discharge is strictly regulated under Central Environmental Authority (CEA) and Marine Environment Protection Authority (MEPA) guidelines. Brine concentrate is sent through an offshore outfall equipped with specialized diffusers located more than 500 meters from the shore, ensuring rapid dispersion and limiting salinity impact to a tightly controlled 50-meter mixing zone.

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Sri Lanka opens up: A new season of direct connectivity

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Malik J. Fernando, Chair, Tourism allianCe

For as long as we can remember, flying to Sri Lanka has meant relying on a handful of options — SriLankan Airlines direct services, useful but limited in schedule and market coverage, or a stop in Dubai, Doha, or Abu Dhabi. That is beginning to change, and this winter season marks one of the more significant shifts in our aviation connectivity.

A wave of carriers is launching direct services into Colombo and it is worth taking stock of what that means for the industry — not just as a matter of flight schedules, but as a matter of strategy.

Europe, reconnecting

British Airways returns to Colombo on 23 October, restoring a non-stop link to London Gatwick. The UK remains one of our strongest, most loyal source markets, and a direct flight removes a genuine point of friction.

Edelweiss Air, part of the Lufthansa Group, is increasing its Zurich service to three times weekly from 26 October — a route that brings with it high-spending Swiss and DACH-region traveller our wellness and upscale properties need.

And in December, French Bee launches a new seasonal service from Paris, opening a cost-conscious but committed segment of the French long-haul market.

A first for Vietnam

A notable development is the arrival of two Vietnamese carriers — Vietnam Airlines and VietJet — both launching direct Ho Chi Minh City services. This is the first time Sri Lanka has a direct link to Vietnam, and it opens a corridor of travellers who may come to see Sri Lanka and Southeast Asia as a natural pairing. Beijing Capital Airlines and Batik Air are expected to add further capacity later in the season, strengthening our reach into China and Malaysia.

The Vietnam route connects us to more than tourists. Vietnam is drawing strong foreign investment and has established itself as a major manufacturing and export hub. A direct Colombo–Ho Chi Minh City link gives us an easier way to engage with that — not only holidaymakers, but business travellers, investors, and trade delegations.

Australia, and the low-cost gap it fills

SriLankan Airlines flies non-stop to Melbourne and Sydney, so Jetstar isn’t opening a new corridor — it’s opening a new price point, the first low-cost carrier to fly non-stop between Melbourne and Colombo, operating three times weekly, year-round, on its Boeing 787 Dreamliner fleet, adding over 100,000 seats a year.

More than “budget”: what these new entrants actually offer

It is worth being precise about what these new services bring, because labels like “low-cost” and “seasonal” can undersell the product. Several of the low-cost and long-haul entrants in this line-up — Jetstar, VietJet, French bee among them — offer proper business-class or premium-economy-style cabins, not a basic recline seat, and all of them are flying modern, widebody aircraft.

Just as important is brand familiarity. Jetstar is a household name across Australia, French Bee It’s trusted by French travellers, and British Airways needs no introduction. Recognisable, trusted brands lower the barrier to trying a new destination. And on the loyalty side, travellers on nearly every one of these routes can redeem frequent flyer points which is a genuine draw for the kind of higher-value, repeat visitor we want more of.

The new carriers market Sri Lanka in its home country with sophistication and reach — glossy campaigns, in-flight promotion, and placement across a crowded travel marketplace reaching the audience we most want to reach.

Why this matters beyond the season

For years, the majority of our long-haul arrivals have transited through the Middle East. That has served us well, but it has also meant a meaningful share of our connectivity has depended on a region that has had its share of instability.

Direct flights change that picture. They cut travel time, appeal to time-conscious, high-value holidaymakers, and, importantly, they diversify our routes to market. This is not a case against our Gulf carrier partners, who remain vital to our connectivity. It is simply a recognition that resilience comes from diversity.

What it means for the season ahead

Securing these routes is only half the job. It now falls to us, as an industry, to support the flights — through targeted destination marketing in each of these new source markets, so that load factors and yields justify the investment these airlines have made in Sri Lanka. Several of these services are seasonal, and our task is not simply to see them through a single winter, but to build the demand that gives an airline the confidence to extend a route year-round. We should not lose sight of the fact that Sri Lanka does not have an off-season — we are a year-round destination and our marketing should say so. Getting this right is as much our responsibility as it is the airlines’.

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‘Biodiversity imparting a powerful competitive advantage to SL’s businesses’

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By Ifham Nizam

Biodiversity is rapidly moving beyond the traditional boundaries of conservation to become an increasingly important economic and business issue, with Sri Lankan companies being urged to recognise nature not simply as an environmental responsibility but as an asset capable of influencing competitiveness, investment and access to international markets.

This was among the key messages at the opening plenary of the 11th Annual Technical Sessions of Biodiversity Sri Lanka (BSL), held on Tuesday at the Shangri-La Colombo under the theme “Beyond Borders: Partnering for Business to Prosper with Nature.”

The panel brought together leading figures from economics, business and biodiversity, including Dr. Nishan de Mel, Founder and Executive Director of Verité Research; Dr. Ruchira Somaweera, National Technical Executive (Ecology), WSP Australia and Adjunct Professor at Murdoch University; Siddarth Hirdaramani, Director, Hirdaramani Group and Director, Biodiversity Sri Lanka; and Shiranee Yasaratne, Senior Technical Advisor, Biodiversity Sri Lanka.

The discussion placed particular emphasis on the growing role of biodiversity science in business decision-making, with Dr. Ruchira Somaweera bringing an important scientific perspective to the question of how companies—large and small—should respond to the rapidly changing global biodiversity agenda.

Somaweera, a wildlife biologist with extensive international experience in scientific research, environmental consultancy and biodiversity conservation, currently provides expert advice on biodiversity conservation and environmental management through his work in Australia. He is also an Adjunct Professor at Murdoch University and contributes to international scientific and conservation initiatives.

His participation in the panel underscored an increasingly important reality for business: biodiversity cannot be addressed only through isolated conservation projects, but needs to be understood in terms of how companies interact with ecosystems, supply chains and natural resources.

Opening the discussion, Dr. Nishan de Mel said he had been invited to step outside his familiar field of economics and examine biodiversity from an economist’s perspective.

Drawing a parallel with biodiversity, de Mel said economists had traditionally developed sophisticated ways of measuring inflation, productivity, employment and economic growth, but had failed to adequately measure the natural systems on which economic activity depends.

“The single largest input into the world economy, the one without which no one can get anything done, appears not to get measured at all by economists, he said.

That missing element, he noted, was nature.

De Mel referred to research by the World Economic Forum and PwC which examined the dependence of 163 industries and their supply chains on nature and biodiversity. He said the research estimated that economic activities moderately or highly dependent on nature represented an enormous share of global economic output.

The significance of those figures, he stressed, was not that nature could simply be assigned a monetary value equivalent to global GDP. Rather, they represented the exposure of the global economy to the degradation of natural systems.

The concept of risk extending beyond the traditional boundaries of a company’s balance sheet was particularly relevant to the theme of the forum, “Beyond Borders”.

For Dr. Ruchira Somaweera, the scientific dimensions of that relationship between business and biodiversity are increasingly difficult for companies to ignore.

The panel’s decision to bring a leading wildlife biologist into a discussion dominated by business and economics reflected the changing nature of the biodiversity debate itself. Biodiversity is no longer being discussed solely as a matter for conservationists, wildlife specialists or environmental organisations.

Businesses are increasingly being asked to understand what ecosystems provide, how their operations affect those systems and what risks arise when biodiversity is degraded.

The moderator specifically turned to Somaweera after hearing how major international companies and buyers were increasingly concerned about environmental performance.

He raised the question of whether the business advantages of biodiversity were confined to large corporations dealing with sophisticated international buyers, or whether small companies and firms should also be taking biodiversity seriously.

The scientific perspective offered by Somaweera is therefore critical to ensuring that biodiversity is not reduced merely to a corporate branding exercise.

Earlier, Yasaratne explained how the business community’s approach to biodiversity had changed considerably over the past 11 years.

She recalled that when the platform was established, businesses were still trying to understand how they could engage with biodiversity and ecosystem issues.

‘At that time there was more philanthropic activity for biodiversity, she said, referring to popular initiatives such as tree-planting campaigns.

The emphasis, however, has increasingly shifted towards understanding the science behind biodiversity and the business implications of ecosystem degradation.

From the business perspective, Hirdaramani said Sri Lanka’s biodiversity and environmental credentials could provide a genuine competitive advantage.

He used the apparel industry to illustrate the point.

Sri Lanka cannot compete with countries such as Bangladesh, India, Vietnam and China purely on the basis of low production costs or manufacturing scale, he said. Labour costs are higher, the country’s manufacturing base is smaller and Sri Lanka does not possess the extensive domestic supply chains available in some larger manufacturing economies.

“What we do have is a very positive biodiversity environment,” Hirdaramani said.

He argued that Sri Lanka’s environmental credentials, together with its strong labour standards and social compliance, had helped create a reputation as a responsible manufacturing destination.

Hirdaramani said this could translate directly into business opportunities, particularly when competing for customers who are prepared to pay a premium for responsible production.

The discussion also highlighted another fundamental economic problem: natural capital is often depleted without being properly reflected in conventional measures of economic performance.

De Mel referred to the work of economist Professor Sir Partha Dasgupta, whose landmark review for the UK Treasury reframed the environmental challenge as an issue of asset depletion rather than merely pollution.

He argued that countries routinely account for the depreciation of physical infrastructure and machinery, but national accounts generally fail to properly reflect the depletion of forests, fisheries, watersheds and other natural assets.

The message emerging from the BSL panel was therefore that biodiversity must increasingly be incorporated into the way businesses understand risk, competitiveness and long-term value.

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