By: Staff Writer
November 24, Colombo (LNW): Once regarded as a cornerstone of Sri Lanka’s maritime identity, the Ceylon Shipping Corporation Ltd (CSC) stands today as a reminder of both resilience and risk within the state enterprise landscape.
After weathering years of operational and financial storms, the corporation’s return to profitability in 2023/24 offers a glimmer of renewal but also exposes the fragility of its recovery.
CSC’s journey mirrors the fate of Sri Lanka’s broader public sector: burdened by legacy inefficiencies yet striving to redefine its purpose in a global shipping industry transformed by competition, technology, and economic uncertainty, several shipping sector experts said.
CSC was originally set up to serve the country’s import and export shipping needs, with the vision of retaining foreign exchange by reducing reliance on foreign carriers. Operating vessels such as Ceylon Breeze and Ceylon Princess, its income streams today come from voyage earnings, vessel leasing and charter-hiring.
In 2023 alone, the company reported earnings of Rs 878.67 million from voyage income and Rs 5,336.83 million from charter hiring, shipping ministry sources revealed.
But beneath these headline numbers lies a more fragile reality. CSC still carries negative net assets, a clear warning flagged repeatedly in its audit reports, they added.
The primary burden stems from a US$ 70 million loan plus US$ 5.44 million in capitalised interest secured in 2016, used to purchase its two ships.
With the rupee depreciating by 12.4 percent in FY 2023, CSC recorded a massive exchange loss of Rs 2,811.9 million, eroding much of its operational turnaround.
Moreover, despite the 2016 Cabinet decision (No CP/16/0035/737/003) and Public Finance Circular No 415 directing all government importing agencies to prioritise CSC, the policy has been largely ignored.
Between 2021 and 2023, over 300 waivers were granted allowing agencies to bypass CSC and use other shipping providers a major blow to its revenue base and the very purpose of its establishment.
Officials at the Ministry of Ports, Shipping and Aviation are aware of this predicament. As noted in parliamentary documentation, the Ministry remains committed “to make Sri Lanka a service supply centre with maximum competition,” signalling intention to revitalise the shipping sector.
Yet implementation remains weak. A high official of the ministry stated that it has to “ensure that strategic assets such as CSC are firmly embedded within national logistics policy.”
CSC has attempted to diversify exploring container feeder services to Bangladesh and Oman, passenger/ferry operations, and bunkering ventures at Colombo but momentum is slow. Financial constraints, foreign debt exposure, and bureaucratic inertia continue to hold back progress.
External pressures such as port congestion at the Sri Lanka Ports Authority’s Colombo terminal and global shipping disruptions increase its risk profile.
If Sri Lanka wishes to keep CSC as a viable national asset rather than yet another loss-making SOE, decisive intervention is needed.
The government must enforce its import policy, ensuring that all state and donor-funded imports are channelled through CSC, and back it with fiscal and institutional support, shipping sector exper said. .
A strategic partnership model combining private management expertise and state ownership would bring flexibility and innovation to an otherwise stagnant enterprise, he pointed out. .
Investment in digital platforms, optimisation of fleet utilisation, and integration of CSC into the broader Indian Ocean regional logistics network can unlock latent potential.
Without such reforms, the company risks drifting further into irrelevance, losing not just revenue but strategic control over maritime logistics and foreign-exchange flows, he emphasised.
