Almost Full

Jan 06, 2009 (LBO) – A private container terminal in Colombo port which is the main money-spinner for Sri Lanka’s John Keells Holdings group, may be nearing its full capacity, analysts and port officials said. But the business was affected when JKH was forced to return its fuel tank farm to the port when the privatisation of LMS was challenged and overturned in a court case.

The court also ended the effective monopoly LMS held in bunker fuel supply in Colombo port.

The loss of the fuel storage tanks and competition will affect the profitability of LMS, which opted to use floating storage, a more expensive option.

Analysts have been warning that SAGT was nearing capacity as its volumes continued to grow last year, although the growth was slower than in 2007 when volumes went up 15.8 percent to 1,546,497 TEUs compared with 2006.

Most of Colombo port’s container volumes come from transhipment business from the Indian sub-continent.

Transhipment accounts for about 70 percent of Colombo’s total box volumes.

But container volumes are now slowing down noticeably because of the global downturn in trade following recession in industrial economies.

SAGT’s box volumes in December 200

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