04 May CASA sets record straight on dollar payments to SLPA
In response to the Daily FT article last week on some reservations expressed by shipping lines over the Sri Lanka Ports Authority (SLPA) requirement of payments in dollars from 1 June, the Ceylon Association of Shipping Agents has issued the following statement.
The shipping lines have been making payments to the private terminals in the Port of Colombo SAGT and CICT in dollars for quite some time. Only SLPA was accepting SLR.
In a recent meeting the Minister of Ports and Shipping requested if the shipping lines could make payments to the SLPA in dollars and the shipping line agents have agreed to facilitate this as far as possible with some clear exceptions which were explained to the Minister.
Navigation and Stevedoring charges in respect of container vessels was agreed to be paid to SLPA in dollars by lines and the shipping line agents who have difficulties will contact SLPA and explain their position to obtain an extension for settlement in dollars.
Some exceptions will need to be considered by the SLPA Chairman, as discussed and explained to the Minister of Ports and Shipping at the recent meeting. The limiting factor would be shipping lines, who have large amounts of rupees accumulated in favour of principals which have not been remitted to principals due to banks not being able to convert to dollars. CASA would request some grace period from SLPA to remit the same or pay in rupees until these funds are used.
Furthermore, CASA has requested that other charges such as LCL charges, change of status, reefer electricity charges and payments for conventional vessels such as break-bulk, casual callers, tanker vessel payments, will need to be continued to be paid in rupees while the option could be left to the agent to pay in dollars if required and possible by principals.
Sri Lankan flagged ships and receivers of free out cargo will pay stevedoring charges in rupees.
Pipeline and storage charges at JCT Oil Bank will have to be allowed to be settled in rupees.
Continuous application of mandatory conversion by banks needs to be addressed with the Central Bank by SLPA to enable agents to pay in dollars.
SLPA will need to accommodate payments for the same vessel in both dollars and rupees.
The SLPA, CICT and SAGT have endeavoured to continue to provide uninterrupted services to shipping lines and the trade in very trying circumstances providing the much-needed impetus to the economy and to the growth of overall container volumes in Sri Lanka by 6% (99,822 TEUs and transhipment by 7% (96,546 TEUs) for the first three months of the year compared to that of 2021.