War Risk Premium on Colombo removed

The Additional War Risk Premium, the underwriters in London had imposed on vessels calling Colombo port, will be removed from March 8, Rauf Hakeem, Minister of Ports Development and Shipping, said yesterday.

At a hastily convened press briefing held at the ministry, Mr. Hakeem said that the official confirmation of the war risk surcharge removal, from Lloyds of London, was expected during the course of yesterday.

"We are again competing on a level playing field. Colombo port is no longer the ‘odd man out’, the minister added.

The removal of the surcharge was the direct result of discussions Sri Lanka’s High Commissioner in London, Mr. Mangala Moonesinghe, has had with the insurance agents in the United Kingdom. The Memorandum of Understanding, the Sri Lanka government signed with the Liberation Tigers of Tamil Eelam too had an impact on the new development, the minister pointed out.

On Thursday the War Risk Rating Committee in London had taken the decision to remove the 0.05 per cent surcharge on Colombo. The additional surcharge was something the shipping community in Sri Lanka had been wery worried about, Mr. Hakeem said adding that he was grateful to the port users who had been so patient for so long.

Commenting on the ministry’s endeavours towards seeking relief from the underwriters in London, the minister said that services of a security consultant was engaged. The recommendations were accepted and implemented. His report had described Colombo as a model port in the region, the minister pointed out.

The war risk premium was imposed on vessels calling Colombo in August last year immediately after the incidents that took place at the Katunayake airport, which struck a severe blow to the country’s economy. The losses, especially to the aviation, travel and shipping sectors were enormous. The minister said the losses caused to the shipping agents amounted to US$ 100 million and to the exporters it was about US$ 50 million. The loss to the Sri Lanka Ports Authority has not yet been estimated.

"The new development is an impetus and a boost to the business community as a whole," the minister added.(RS)