Sri Lanka is planning to set up a dedicated dry port for US bound exports, to meet US security concerns.

"We are considering setting up a dedicated dry port in Orugodawatte for US-bound containers because of US concerns of terrorist infiltration," said Secretary to the Ministry of Trade, Dr K Ratnayake.

"When the Orugodawatte dry port is ready all the security checking will take place there and a train will carry the sealed containers to the harbour for immediate loading."

Ready-made garments are the biggest direct export from Sri Lanka to the US, being worth about US$1.6bn.

Garment companies say the re-location of export handling to Orugodawatte will not have an impact on garment exports unless additional security measures contribute to logistical delays.

In addition to complying with US security measures, Sri Lanka has also been trying to work out a free trade agreement with the US to safeguard the garment sector.

But trade talks have not progressed and the Sri Lankan market share in the US shrank by about 2% in 2006.

By Dilshani Samaraweera.