Located in the East-West maritime trade route with a world-renowned transhipment hub, the island nation boasts all the elements for a fully-fledged marina hub. It has scenic beaches with year-round sunshine, ancient ports in Galle, a natural harbour in Trincomalee and an entirely new Port City in Colombo, as well as easy access to exotic destinations to sail from in the region.
Two proposed marinas in the country are in the Galle Harbour located on the south-western coast and the Colombo Port City which has placed 13 blocks of prime land and a marina out of the 269 hectares re – claimed from the sea for investors.
Currently, the Galle Harbour provides yachting fa – cilities and is a popular port of call for yachts sailing past. More than 300 trade vessels are also said to sail ten nautical miles away
However, despite all these favourable factors, Sri Lanka does not have a fully-fledged functional mari – na, a significant fleet of yachts, or a culture of pleasure sailing in the country. And one may ask why Sri Lanka has not tapped into the leisure sailing industry yet, given the fact that it has been looking at growing high-end tourism as a post-COVID strategy to revive tourism.
Michael Sathasivam, founder and man – aging director of Symbiosis International, a company in luxury boating, superyachts, and marina development, says few people here understand what developers and investors like himself are trying to accomplish.
“A marina is not just a place to moor yachts. Nor is it the main money-spinner. It is the surrounding ecosystem – all the wining and dining, casinos, Micheline-starred restaurants, hotels, and whatnots,” he said.
“If you look at some of the largest marinas in the world, such as Monaco and Malta, there is a lifestyle and a culture. People live on their yachts for months”. Cruise tourists are estimated to spend around $350 a night in markets such as Singapore, Malaysia and Thailand. Sathasivam sees potential for Sri Lanka but is concerned that nothing is done. He bemoans the indifference and inconsistency of policy – makers towards this promising industry.
Investment constraints
In early 2020, the government announced its intention to solicit investments to develop the Galle Harbour. Meanwhile, the country also decided to follow a target-based plan to drive tourism revenue to $10 billion in 2025, up from $4.4 billion in 2018 by cutting out unnecessary regulatory barriers that hinder the expansion of the sector.
In 2015, the Sri Lanka Ports Development Authority began to develop a basic yacht marina at the Galle Harbour with an investment of Rs125 million which could berth 22 yachts of 15m length and 3m draft and include auxiliary services and repair facilities. This project never took off the ground. “The Request for Proposal (RFP) to develop the marina has been coming out for the past three to four years now, but investors are wary,” Sathasivam says.
A second phase was also planned which included a 900m breakwater, a multi-purpose berth for larger yachts up to 300m in length, and facilities for whale and coral watching, boat services, restaurants and hotels.
The only piece of available land is a 2.5ha block. This is barely enough to accommodate a proposed dry dock, repair facilities and a sailing school, Sathasivam says
Sathasivam gives three reasons why the proposed yachting marina at Galle is failing to attract investments. The first, and usual suspect, is the unfriendly business climate.
“Investors have not shown interest because of the complex and lengthy approvals process involving 19 different approvals from various regulatory authorities. It would take two years to get all the approvals before development work can start, demoralising any investor from the moment he commits to the project,” Sathasivam points out.
If investors are put off by the unfriendly business environment for marina development, the second problem is limited land. Real estate and infrastructure development are restrained because the state owns the land surrounding the Galle Harbour. There is a floating armoury, navy base, a fisheries harbour and a cement factory already occupying the land.
The only piece of available land is a 2.5ha block. This is barely enough to accommodate a proposed dry dock, repair facilities and a sailing school, Sathasivam says. “The most off-putting thing for investors was that they were required to pay $5 million just to bid for the land.” According to Sathasivam, the area also has a large wasteland which is not offered to investors. The third problem is that authorities refuse to grant duty-free status or provide concessions to develop ancillary services, housing and accommodation. “This is the least that they could have done after demanding an exorbitant amount of money just to place a bid,” he points out.
Sathasivam and a group of investors are keen to commit $300 million to develop yachting in Colombo and Galle. Of this, $60 million is allocated for Galle. “We want to build and operate the marina for 33-years when the lease contract ends. However, nothing moves. The people in charge don’t see the big picture and projects don’t take off,” he said. Countries like Singapore, Malaysia, Thailand, and the Philippines have mature marinas with berthing capacity for 100-300 yachts. Vietnam, a newcomer in the luxury yachting industry, has a 220-yacht berthing capacity.
India is entering the field with a 50-capacity marina in the Andaman and Nicobar Islands (ANI), part of a shipping transhipment hub. “The catch here is that the archipelago is located in the juncture of the Bay of Bengal and close to many Southeast Asian countries. Port Blair, the ANI’s capital, is 750 nautical miles from the Indian mainland, the archipelago’s northernmost island is just 22 nautical miles from Myanmar and the southernmost tip only 90 nautical miles from Indonesia. Thailand lies 270 nautical miles to the east of the ANI,” Sathasivam says.
“This new investment in the region will reroute all the shipping and cruising routes to India,” he warns. “We need to develop Galle fast as an entry point to Sri Lanka.” To speed up the investment process, Sathasivam suggests that Sri Lanka too should have an investment facilitation arm like in Indonesia and Myanmar where all the necessary approvals are granted under one roof and processes are simple. However, the call from many industries for a onestop investment board has gone unanswered for years.