Colombo (LNW): The Auditor General’s Department has launched a special probe into the use of substandard medicines, following reports on a number of incidents in the Health Sector surrounding controversy.
Following investigation, a report is expected to be submitted to Parliament, said Auditor General W.P.C. Wickramaratne.
Previous investigations on the National Medicines Regulatory Authority (NMRA) and the Ministry of Health revealed significant information about the use of substandard and unregistered drugs, the Auditor General emphasised, adding that the Parliament Committee on Public Business has also discussed the matter.
Meanwhile, a separate probe into the computer system related to the purchase and distribution of medicines will also be conducted, he added.
Colombo (LNW): The Government is alleged to have succumbed to Indian pressure kicking China out of Sri Lanka’s Liquefied Natural Gas (LNG) space.
The alleged move concerning LNG infrastructure projects in Kerawalapitiya has sparked concerns among various stakeholders within the energy sector. Sources claimed that the move could possibly jeopardise the Kerawalapitiya LNG-led clean energy power complex which was in the power development master plan into disarray.
The concerned projects are “Development of FSRU at Offshore Kerawalapitiya on BOO Basis and Mooring on BOOT Basis” initiated by the Ceylon Electricity Board (CEB), and the “Construction of a Re-gasified Liquefied Natural Gas (R-LNG) pipeline system from Floating Storage Regasification Unit (FSRU) to existing Kelanitissa and Kerawalapitiya power plants on Build, Own, Operate and Transfer (BOOT) basis” initiated by CPC.
They were published through an international bidding process in early 2021, (after four previously failed G2G/unsolicited attempts) which should have become the first project that introduced LNG to Sri Lanka.
Sources said the projects have experienced a long and stringent evaluation of the technical and financial proposals, after which it was deemed that the Chinese company, China Harbour Engineering Company Ltd., (CHEC) was the only Technically Qualified bidder.
“Such infrastructure ought to have been commenced if it were not for the economic issues faced last year, whereas both projects stagnated at the final stage of this procurement process for nearly one year,” sources said.
Especially with the FSRU&M Project, its Concession Agreement has been ready since September 2022, only requiring Cabinet Approval, and had the Ministry drafted the cabinet paper, it could have commenced right away as informed sources on the matter commented.
“Any delay or diversion in implementing these critical projects may be detrimental to Sri Lanka and Government’s plans to make Sri Lanka energy secure/independent and might create significant value chain losses which can only be avoided by robust, righteous, and timely decision-making,” sources pointed out.
As an essential energy infrastructure, after multiple studies, the projects were the only proven feasible way out to LNG in Sri Lanka, which is deemed a clean energy source with lower carbon emissions and higher economic efficiency.
The projects are of the potential to serve up to 8 power plants with capacity of 2,400 MW. By replacing diesel with LNG for power plants, the projects will facilitate the diversification of the energy mix. Hundreds of million US dollars in foreign exchange per year are expected to be saved, and the public will meanwhile reap benefits by way of reduced tariffs.
Sources alleged that plans underway by the Government to suspend this procurement process and the move ahead of President Ranil Wickremesinghe’s historic visit to India was an indication of the Government bowing down under the pressure from the giant neighbour.
Colombo (LNW): The government has decided to increase fuel quota under the QR system next month as there was a significant reduction in the consumption of petrol and diesel owing to drop in using vehicles for un necessary travelling and long distance driving by motorists.
Power and Energy Minister Kanchana Wijesekera revealed y that fuel quotas might see a further increase next month.
The decision comes after a comprehensive evaluation of fuel cargo plans and supply for the upcoming six months, carried out by the Ceylon Petroleum Corporation (CPC).
Fuel import plans, refinery operations, refinery upgrade proposals, QR quotas storage capacity, stock automation, distribution, and agreements with fuel stations were among the topics discussed.
The comprehensive evaluation of these aspects will serve as the foundation for determining the appropriate increase in fuel quotas for the following month.
Analysts opined the potential increase in fuel quotas in August is likely to have a positive impact on consumers and businesses alike. “With a surge in economic activities and the resumption of various sectors, a steady and reliable fuel supply is crucial to sustain the momentum of growth,” they pointed out.
Sri Lanka has recorded a significant reduction in fuel demand over the year from January 2022 to January 2023, with consumption of auto diesel and petrol dropping as much as 50 and 30 percent respectively, Power & Energy Minister Kanchana Wijesekara said.
He noted that retail and industrial fuel sales records of the state-run Ceylon Petroleum Corporation (CPC) show a reduction of about 50 percent in auto diesel, about 30 pertol in petrol, and about 70 percent in kerosene use.
Following the implementation of the QR-based National Fuel Pass, Sri Lanka’s monthly fuel import bill dropped to USD 230 Million, from USD 500 Million.
In a statement, the Energy Ministry says the distribution of fuel to the public, under the QR-code-based quota system has resulted in major savings for the state.
According to the Energy Ministry, six Million vehicles have registered with the National Fuel Pass so far, while 93% of the fuel stations across the country have implemented the QR-based fuel dispensing system.
Colombo (LNW): In the wake of Sri Lanka’s moves to recover from an unprecedented economic crisis, the government‘s foreign financing is set to strengthen with the resumption of funding from bilateral and multilateral creditors the first half of this year
As such, disbursements and new financing commitments received from conventional bilateral creditors have poured in significantly during this period. .
Multilateral creditors continued their operations and some of their projects were repurposed to cater to the budget financing requirements of the Government, a finance ministry report indicated.
The Government of Sri Lanka and the World Bank, European Union (EU) and Agence Française de Development (AFD) have recently signed financing agreements to help strengthen Sri Lanka’s management of public finances.
The grant of EUR 9.8 million for Public Finance Management aims to support improving economic governance, transparency, and accountability in how public finances are spent.
Under the Extended Fund Facility (EFF) 2023-2026 of the International Monetary Fund (IMF), Sri Lanka received the first tranche of US$ 333 million to meet budget financing needs.
Furthermore, it is evident that the Emergency Credit Lines received from the Government of India helped substantially to ease the foreign currency needs for the importation of essential goods.
$131 million was received under the Credit Lines in the first quarter of 2023. Accordingly, the Government secured $ 670.3 million during the period OF 1Q 2023 under review.
The government has received $ 142.5 million from India, $114.2 million from the World Bank nd $ 58 million from the ADB.
Foreign financing from the donor countries has also come down with the Netherlands loan of $ 3.9 million and German grant of $ 1.3 million.
The Government obtained a total of $40.9 million in Official Development Assistance (ODA) commitments by entering into two grant agreements with the Government of Japan in the first quarter of 2023.
This consists of $ 37.1 million for fuel grant assistance under the Japanese Economic and Social Development Programme and $ 3.8 million for the improvement of infectious waste management extended by the Government of Japan. This grant commitment was made for the health and social welfare sector.
The grant of EUR 9.8 million for the Public Finance Management reforms is provided through a multi-donor trust fund that is financed by the EU and AFD and administered by the World Bank.
The World Bank Group CPF, lays out a two-phased approach that starts with a focus on urgent macro-fiscal and structural reforms and support to protect the human capital and most vulnerable population.
After the first 18-24 months, and subject to successful implementation of the reform program and international debt relief and financial support, the CPF focus will gradually shift to investments in longer-term development needs that will help promote private sector job creation.
Colombo (LNW): The issuance of a new circular by the Ministry of Health to all health officials restricting them from providing information to the media without prior consent of the department heads has met with immediate backlash by health professionals, in what they call it a severe blow in the head against the freedom of speech and expression of the health employees.
The circular in question was singed by Secretary to the Health Ministry Janaka Shri Chandraguptha and asserts that disciplinary action will be taken against any official that provides information to the media, without the consent of the relevant department head.
The circular affects all officers in the Health Sector including Provincial Health Secretaries, Heads of institutions of the Ministry of Health, Provincial Directors of Health Services and Regional Service Directors.
The said circular has not clearly mentioned the provisions of the Establishments Code which concern the representatives of trade unions or health professionals’ associations, the Joint Council for Professionals of Supplementary Medicine said.
The circular in question was deliberately issued with the intention of suppressing the voice of the trade unions, alleged Council Chief Ravi Kumudesh, warning that trade union actions will be taken if the government proceeds with this communique to arbitrarily suppress the freedom of speech and expression of the health employees.
The Council added that an explanation is expected from the Health Secretary in this regard, and urged him to revoke the communique in question.
Jaffna International Airport receives daily international flights since June 16 via Alliance Air from Chennai: creates aviation history by becoming the 2nd Int’l Airport in Sri Lanka to have daily int’l flights after the Bandaranaike Int’l Airport: Mattala Rajapaksa Int’l Airport has 3 flights per week from Red Wings Russia while Sri Lanka’s first int’l airport Ratmalana airport does not operate scheduled international flights.
PM Dinesh Gunawardane informs Chongqing Municipal Committee Secretary & member of the Communist Party of China’s Central Committee Dr. Yuan Jiajun that China and Sri Lanka can cooperate in “space” science as Southern Sri Lanka has been identified as an area with the lowest gravity in the world and the Southern Ocean is most suitable for the landing of spacecraft.
Professor Aminda Methsila Perera, Head of the Department of Accountancy at Wayamba University warns of another possible economic crisis in September 2023: explains a 2nd phase of the crisis is likely, owing to the delay in the implementation of the conditions and agreements made with the IMF.
Foreign Affairs Minister Mohamed Ali Sabri says there is possibility of adopting the Indian Rupee as a “valid currency” in Sri Lanka, with anticipated arrangements to facilitate seamless business transactions for Indian tourists visiting Sri Lanka.
CB Governor Dr Nandalal Weerasinghe urges licensed banks to take immediate measures to adequately reduce the lending rates, in view of the CBSL’s reduction of policy interest rates: warns that inadequate and delayed reduction of lending rates “may compel administrative measures” by the Central Bank.
Head of the State-Owned Enterprise Restructuring Unit of the Ministry of Finance and former Lion Brewery CEO Suresh Shah says steps are being taken to split the Life and General Insurance businesses of SL Insurance Corporation into 2 separate entities prior to the divestment of the Govt’s controlling stake in SLIC.
State Minister of Finance Ranjith Siyambalapitiya says an import tax of Rs.25 per litre will be imposed on imported coconut oil from next week.
Announcement made that the 1st phase of the 2nd School Term for 2023 will start on July 24 & end on August 17, with holidays from August 18-27: 2nd phase of the 2nd Term will be from August 28 to October 27: 1st phase of the 3rd Term will be from Oct 30 to Nov 24, with holidays from Nov 25 to Dec 31 due to A/L examinations: 2nd phase of the 3rd Term will be held from Jan 1, 2024 to Feb 16, 2024.
Trade Minister Nalin Fernando says approval has been received to sell eggs imported from India to consumers via supermarkets and Sathosa stores: eggs imported from India are currently being sold at a price of Rs.35 to bakeries and hotels.
Left-arm seamer Dilshan Madushanka is in contention to make his Test debut on Monday as SL has decided to bring in both Madushanka and Asitha Fernando for the must-win 2nd Test against Pakistan.
Colombo (LNW): Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe urged all licenced banks to promptly take necessary actions to drop the lending rates, in compliance with the recent drop of policy interest rates declared by the CBSL.
Any insufficient and delayed adjustments by the banking and financial sector may compel the CBSL to consider implementing administrative measures, he added.
At the first auction held on 12 July after the second policy rate cut of 2% on 5 July, the CB raised T bill yield rates by about 1%. This is a contradiction to the monetary policy easing cycle that commenced on 31 May. However, only Rs. 99.7 bn out of Rs. 160 bn sought was raised from the auction.
This article shows how T bill rates increase continued on the next auction too, raising public concerns over the CB’s present interest rates policy and resulting cost to public funds that suffer bankruptcy due to the CB mismanagement of national debt stock.
19 July T bill auction
The CB at the auction held on 19 July also raised T bill rates by 0.31%-0.91%. At such higher rates, Rs. 75.5 bn against the funding requirement of Rs. 160 bn was raised (see CB’s press releases below).
As a result, the cumulative increase in T bill rates at the last two auctions is about 1.5%. This an undisputed loss to public funds as against significant monetary easing cycle on the table with the advice of the IMF and unexpectedly speedier disinflation path towards the monetary policy target of 4%-6%.
CB’s questionable interest rates policy
CB’s general practice has been to use T bill rates to drive its interest rates policy while retraining the use of policy interest rates (overnight standing deposit facility rate – SDFR – and standing lending facility rate – SLFR, known as policy rates corridor). This is especially evident from April 2022 as T bill rates were heavily used to convey the monetary policy path.
For this purpose, T bill rates are manipulated through several devices such as EPF funds, post-auction private placements and CB’s post-auction direct purchases of T bills.
As a result, T bill rates show a diverse behaviour against policy rates (see the Chart below) that questions the monetary policy rationale.
Further, this can help manipulation of the auctions for the benefits of certain dealers. For example, auctions held on 31 May, 5 July, 12 July and 19 July are cited.
Accordingly, hiking T bill rates at the last two auctions in contrast to the CB’s policy interest rates could be a hidden monetary policy attempt to facilitate certain dealers and investors, especially, foreign investors to encourage hot-capital inflow to boost the CB’s foreign reserve and country’s BOP in order to mislead the public that the economy is being stabilized back. This is nothing but the old monetary policy game that the CB played on foreign debt that caused the country’s bankruptcy at present. The present CB Governor as the then Senior Deputy Governor is quite familiar with this flawed model.
Therefore, it is advisable that the public stays alerted on possible policy abuses and resulting losses to public funds.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 10 Economics and Banking Books and a large number of articles published.
The author holds BA Hons in Economics from University of Colombo, MA in Economics from University of Kansas, USA, and international training exposures in economic management and financial system regulation)
Colombo (LNW): Two former LTTE cadres who were convicted of launching the bomb attack on the Central Bank of Sri Lanka (CBSL) on January 31, 1996 killing 91 people have been granted presidential pardon.
Selliah Navaratnam (69), an ex LTTE member who had been sentenced to serve 200 years in prison, and S. Shanmugarajah (56), another LTTE member who had been sentenced to life in prison, have been granted the President’s pardon and released from the prison on Tuesday (18), the Department of Prisons announced.
Photo: Ada Derana
The vicious attack on the CBSL building in 1996 killed 91 individuals including 41 CBSL officials, whilst leaving 08 CBSL officials totally blind, 11 officials partially paralysed, and hundreds of people wounded.
PMD: Minister of Foreign Affairs Ali Sabri said that President Ranil Wickremesinghe’s desire is to make the most of the development opportunities in the Indian Ocean region, which is the world’s largest emerging economic region.
Today, no country in the world can advance alone, and every developed country in the world has made progress through regional partnerships, the minister said, adding that the President’s program is to fulfill the development expectations of Sri Lanka by developing Indo-Sri Lankan relations in a manner that benefits both parties and does not threaten them.
Minister Sabri stated this while attending the press conference held at the Presidential Media Centre this morning (22) to inform about the two-day official visit of President Ranil Wickremesinghe to India and the vision of India-Sri Lanka Economic Partnership.
Emphasizing that the President or the government will never do anything that threatens the country, the minister also said that it is the government’s aim to implement those activities with the full understanding and agreement of all parties.
Ali Sabri, Minister of Foreign Affairs, further commented;
“We firmly believe that fostering a robust and enduring relationship with our close and longstanding partner, India, holds significant advantages for both Sri Lanka and the entire region. Acknowledging the prevailing consensus that approximately 2/3 of the world’s total growth will unfold in the Asia Pacific region over the next few decades, it is widely recognized that India and China will play pivotal roles in leading this growth.
In light of these realities, President Ranil Wickramasinghe emphasizes the need to capitalize on the vast development opportunities presented by the Indian Ocean region. Drawing parallels with successful models seen in the European Union, Middle Eastern countries, China, and the North American region, we are determined to harness similar development dynamics.
Recently, President Wickramasinghe conducted a two-day official visit to India, engaging in crucial discussions with key stakeholders. Notable meetings were held with Indian Foreign Minister Dr. Jayashankar, India’s Chief Defence Adviser, and Prime Minister Narendra Modi, alongside other members of the Sri Lankan delegation.
India’s invaluable assistance during past economic crises, including financial relief and leadership in negotiations with the International Monetary Fund, has been instrumental for Sri Lanka. President Wickremesinghe expressed heartfelt gratitude to Prime Minister Modi and the Indian government for their unwavering support on behalf of the Sri Lankan Government and its people.
Additionally, on the occasion of the 75th anniversary of our diplomatic relations, we convened discussions to further enhance our economic, social, and people-to-people ties.
Recognizing that progress to the next stage for Sri Lanka necessitates investments and market opportunities, we firmly believe that a collaborative approach with India will yield substantial benefits. Discussions with Prime Minister Modi included not only intergovernmental matters but also emphasized collaboration between the private sectors to reach mutually beneficial agreements.
An important consideration was the possibility of adopting the Indian rupee as a valid currency in Sri Lanka, with anticipated arrangements to facilitate seamless business transactions for Indian tourists visiting our country, similar to the successful approach adopted with Singapore.
Furthermore, we explored avenues to bolster the strong relationship between India and Sri Lanka. Current daily flights operating between India and Palali Airport and the potential for a future passenger ferry service were among the topics discussed. Improving internal airline relations was also a key area of inquiry.
The prospect of promoting cruise tourism emerged as an appealing initiative to strengthen ties in the tourism sector, given its attraction to Indian tourists and its potential to revitalize Sri Lanka’s tourism industry.
With the South Indian region experiencing rapid development, both nations’ leaders recognized the strategic importance of connecting ports to ensure Sri Lanka can leverage the economic growth in Tamil Nadu, Andhra, and Telangana. Scholars are actively engaged in discussions to devise a framework for establishing these port connections, leading to a consensus among leaders to present it to the Parliament for a decision.
Anticipating that renewable energy could meet 70% of our country’s national electricity needs by 2030, we are keen to explore the market potential for exporting surplus energy. Deliberations on creating a conducive environment for the export of solar and wind power were extensive, culminating in a memorandum of understanding to facilitate collaborative efforts. Furthermore, opportunities for cooperation in green hydrogen and green ammonia through innovative technologies were explored.
In recognition of the significance of technical knowledge for the advancement of our agricultural sector, a memorandum of understanding was signed to acquire expertise in various fields, including animal husbandry and dairy production.
Appreciating India’s substantial progress in digitization, we sought technical assistance to accelerate our own digitization efforts in Sri Lanka.
In the realm of education, collaboration between Indian and Sri Lankan universities was bolstered, with contemplation on the possibility of investing in establishing a prominent Indian university within our borders.
Turning our attention to the plantation Tamil community of Indian origin residing in Sri Lanka for the past two centuries, India has expressed its commitment to implementing several programs aimed at their progress, with a notable investment of 750 million Indian Rupees.
The prospect of establishing a university in the Nuwara Eliya area was also a subject of discussion, paving the way for future agreements.
Attention was devoted to addressing the concerns of the fishing community, with a focus on gradually halting bottom trawlers in the North and seeking opportunities for Sri Lankan fishermen to operate beyond the Indian border. Constructive dialogue between the two parties remains the cornerstone for resolving these issues.
Lastly, both sides unanimously agreed on the imperative of maintaining the entire Indian Ocean region as a safe zone, acting collectively with the utmost commitment to safeguard mutual security.
In conclusion, our President’s visit to India has served as a significant platform for strengthening cooperation and collaboration between our nations. We look forward to translating the shared vision into concrete actions that will yield lasting benefits for Sri Lanka, India, and the entire region.”
