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Asian Tribune - Colombo Correspondent
Asian Tribune is a leading on-line daily widely read by the Sri Lankan Diaspora. It has also a large readership in Austral-Asia.

Respected analysts and academics of the region contribute to it. It has correspondents in some of the major cities of Asia.

Right now the position of the Colombo Correspondent is vacant.

By Mandana Ismail Abeywickrema

The attack on the Colombo Port yesterday by the LTTE would have a direct impact on the economy, analysts feared.

Economic analysts say the attack would affect transshipments if insurance premiums were increased due to the high war risk factor.

Economist Dr. Harsha de Silva told The Sunday Leader the attack would result in an increase in transaction costs as insurance premiums would be increased and would directly have an impact on the transshipments.

According to de Silva, it would also have an impact on Sri Lanka?s target of being a hub port in the region.

A marine insurance expert told The Sunday Leader that the country might not face any immediate impact in the aftermath of yesterday?s attack where there would be an increase in the insurance surcharge on ships and cargo.

However, he noted that a repetition of such an act would have an impact as the ship owners would have to pay a higher surcharge and the cargo importers too would be forced to pay a higher insurance surcharge.

?When there is an increase in the surcharge, the burden will have to be passed on and it will finally go to the consumers,? he said.

He explained that while the present insurance rate stands at .05% it could vary depending on the risk exposure.

However, Ports and Aviation Minister Mangala Samaraweera who visited the site and commended the Sri Lanka Navy and Ports Authority for their action in dispelling any threat and resuming normal operations has said, ?This proves again that the Port of Colombo is one of the safest ports in the world.?

Deputy Ports and Aviation Minister Duminda Dissanayake told The Sunday Leader that the government did not expect the attack to have any affect on transshipments as the confrontation took place outside the harbor.

?Unlike the previous time when such an attack took place, this time it was out harbor and the vessels in the harbor were not affected,? he said.

Dissanayake said the containers that were damaged during the confrontation were in a vessel, which was out harbor. The attack damaged three containers in a foreign merchant vessel.

Dissanayake also said that there has still been no discussion whether the cargo owners would be paid any compensation for the damaged containers.

?The attack proved the high level of security in the port and we are confident that it would not have any impact on the transshipments and the economy on the whole,? he said.

Terminal operations in the harbour had resumed within an hour of the incident, and normal vessel movements commenced at 9:00 a.m.

The Tigers earlier entered the Colombo Port in April 1996, when it damaged foreign ships with RPGs, but security men blew the LTTE craft before they could cause major damage.

Since then, authorities have tightened security and banned fishing near ports.

Economic fall out after port attack feared

Now onwards the the cowards are going to deny their deaths to avoid benefit payments to the relatives.Goeabels machinery headed by the comical Ali Ramputtan will be in full swing.