COLOMBO, July 10 (Reuters) – Sri Lanka is likely to discuss energy, power and port projects during a presidential visit to New Delhi next week, the foreign minister said on Monday, as India tries to push forward stalled initiatives with its crisis-hit neighbour.

India’s support was critical for Sri Lanka last year after it almost ran out of dollars and sank into a financial crisis that left it struggling to fund essential imports including fuel and medicine.

India provided about $4 billion in rapid assistance between January and July in 2022, including credit lines, a currency-swap arrangement and deferred import payments, and sent a warship carrying essential drugs for the island’s 22 million people.

Sri Lanka will now focus on grid connectivity between the two countries, port development and renewable energy projects, largely in the northern part of the island, when President Ranil Wickremesinghe visits India from July 21 for two days, Foreign Minister Ali Sabry told reporters.

“Trincomalee energy-hub development, port development, possible refinery – basically we are discussing with India,” Sabry said, referring to a strategically important natural harbour on Sri Lanka’s northeast shore.

“We are now continuously reviewing the progress and finding ways to fast track those, if possible.”

The two countries want to expand and develop the Trincomalee harbour into a major port.

Regional rivals India and China have long battled for influence in Sri Lanka, which is strategically located in the Indian Ocean.

Sabry said both China Harbour Corp and Sinopec (600028.SS) were keen to invest in Sri Lanka. Sinopec has already been short-listed for a $4 billion refinery near southern Sri Lanka’s Hambantota port.

Sri Lanka is in talks with both countries to renegotiate its debt after defaulting last May. Sabry said the talks were making good progress.

“The idea is to conclude all these things by September and to officially come out of bankruptcy and start repayments,” he said.

Source: REUTERS

By: Isuru Parakrama

Colombo (LNW): An extraordinary gazette has been issued on the petroleum products licensing regulations for the import, export, selling or supplying petroleum products in Sri Lanka.

The gazette was declared by Power and Energy Minister Kanchana Wijesekara, in compliance with Section 07 of the Petroleum Products (Special Provisions) Act, No. 33 of 2002 read with Sections 05 and 06 of that Act on the advice and recommendation of the Committee appointed under Section 03 of that Act.

Accordingly, these regulations shall apply to an applicant and any person or body of persons issued with a licence under these regulations to import, export, sell, supply or distribute petroleum in the country under Section 05 of the Act.

The regulations are cited as the “Petroleum Licensing Regulations No. 01 of 2023.”

By: Staff Writer

Colombo (LNW): The Government is taking every possible step to attract more foreign direct investment into the country lobbying Indian investors to start joint ventures in the island.

Sri Lanka is expecting foreign direct investment inflows to rise by a fifth to US$1.3 billion this year, a government official said with India likely to play a lead role despite the Sri Lankan economy facing its worst crisis in decades.

Continuing his discussions with senior Indian private sector figures, Sri Lanka’s High Commissioner to India Milinda Moragoda held a meeting in New Delhi with the Federation of Indian Chambers of Commerce and Industry (FICCI) President Subhrakant Panda.

Panda, who is also the Managing Director of Indian Metals & Ferro Alloys Ltd. (IMFA), India’s foremost fully integrated producer of value-added ferro chrome, engaged in fruitful discussions with High Commissioner Moragoda.

Panda and the High Commissioner of Sri Lanka discussed a range of issues pertaining to possible cooperation between FICCI, Trade Chambers in Sri Lanka and the Sri Lanka High Commission.

The High Commissioner provided Panda with an update on the assistance provided by the Indian Government during the economic crisis.

Moreover, he underscored Sri Lanka’s current state of readiness to embrace large-scale investment from India. Panda shared valuable insights into FICCI’s rich history spanning 96 years, highlighting its vast network that encompasses not only India’s largest companies but also small and medium-sized enterprises (SMEs).

Both parties recognized the significance of targeted sector-specific investments, aiming for greater integration with the Indian economy. It was agreed to engage with Sri Lankan trade chambers and the High Commission to take this initiative further.

Although FDI inflow was pushed to the brink last year by power cuts, chronic shortages of fuel and food and soaring inflation, Sri Lanka managed to raise its FDI by 38% to $1.08 billion, data from the Board of Investment (BoI) showed.

Part of the bump came from India, which wants to keep China’s expansion in its neighbour in check. India’s Adani group signed up for two wind power plants worth $442 million last year.

In the first quarter, Sri Lanka has already received proposals worth $600 million, said BoI Director General Renuka Weerakone, with 22 new projects and six expansions.

“The acid test is really in what comes in, that is what really helps the economy,” she disclosed.Sri Lanka is banking on information technology, solar and wind, bunkering and mineral processing to attract investments.

India’s MCS Group has signed a $20 million deal for mineral processing, the largest Sri Lanka has received so far in 2023, Weerakone said.

“Japan is very interested in minerals, so is China,” she said. “The raw material we have is something we can really pitch to get new investments.”

Sri Lanka has untapped deposits of graphite, phosphate and other minerals to attract investors but policy frameworks are yet to be updated, creating a bottleneck for FDI, Weerakone added.

Over the last decade, China has invested about $3 billion in Sri Lanka, accounting for nearly a quarter of its FDI, while India made up about $1.3 billion. In the last two years, India took the lead, followed by the United Kingdom in 2022 and Netherlands in 2021.

By: Staff Writer

Colombo (LNW): The proposed South Asia Subregional Economic Cooperation (SASEC) Port Access Elevated Highway (PAEH) Project will be completed next year.

The government will construct about 5.3 kilometers (km) of an elevated toll highway with related facilities between New Kelani Bridge (NKB) and Galle Face in central Colombo 1.

It will provide a direct link to the city center and the port from Colombo – Katunayake Expressway (CKE) via NKB, and then extend the expressway network into the city.

The project will help alleviate traffic congestion in the densely populated areas of Colombo, improve last-mile connectivity from the country’s expressway network to the international port in Colombo, provide better logistics services for freight operations, and facilitate regional trade.

The estimated cost of the Project is Rs, 28.002 Billion. The Project was commenced in 2019 and it is planned to be completed in 2023 and now it has extended to 2024.

Minister of Transport, Highways and Mass Media, Bandula Gunawardena has commented on the implementation of the Port Access Elevated Highway Project, highlighting that 30% of the project is yet to be completed.

He stated that the project is expected to conclude by the end of September next year.The Minister further added that an expenditure of US$ 60.2 million will have to be incurred by the government to conclude the entire project.

A special inspection tour of the Port Access Elevated Highway Project was led by the Minister today, along with a group of Chinese stakeholders involved in the project.

The relevant project was commenced in 2019 to alleviate traffic congestion in the densely populated areas of Colombo, improve last-mile connectivity from the country’s expressway network to the international port in Colombo, provide better logistics services for freight operations, and to facilitate regional trade.

The project includes the construction of an elevated toll highway spanning approximately 5.3 kilometres between the New Kelani Bridge and Galle Face in Colombo, which aims to provide a direct link to the City center and the Port from the Colombo- Katunayake Expressway via the New Kelani Bridge.

The Port Access Highway Project was originally scheduled to be concluded in 2023, however, delays occurred due to the fallout of the economic crisis in the country last year.

Commenting further regarding the matter, Gunawardena emphasized that the Asian Development Bank (ADB) acts as the main lender of the project, adding that out of the total cost of $ 360.2 million, the ADB provides$ 300 million as such the local government should incur $ 60.2 million.

By: Staff Writer

Colombo (LNW): Sri Lanka’s tourism industry has recorded an impressive rebound in the first half of 2023, with earnings reaching nearly US $ 1 billion, along with steady growth in arrivals.

Tourism earnings for the first six months amounted to $ 986.2 million, reflecting a substantial 45.1% increase compared to the same period last year, whilst June earnings stood at $ 158.4 million, the latest data released by the Central Bank showed.

The month of June witnessed a significant milestone for Sri Lanka as tourist arrivals surpassed the 100,000 mark, a feat not achieved in the past four years. At the end of last month, the country welcomed a total of 100,388 tourists, surpassing the initial target of 87,521 and registering an impressive year-on-year growth of 206%.

This remarkable performance has injected new hope into an industry that had been severely impacted by multiple crises in recent years.

“A significant part of the economic recovery has come from the tourism industry, which has rebounded magnificently.

The increase in visitors not only gave the tourism industry a much-needed boost, but it also had a weighty impact on the nation’s overall economic recovery,” Tourism Minister Harin Fernando disclosed.

Arrivals in the first six months amounted to 624,874 (as against 32,856 or recording a 206% YoY increase in crisis-hit 2022) – a welcome development for the triple-hit tourism industry, but performance is still down by 46% compared to the same period in the benchmark year 2018.

The revival of Sri Lanka’s tourism industry has instilled renewed confidence in the sector’s potential for growth. With ongoing efforts to enhance infrastructure, promote sustainable tourism, and ensure the safety and satisfaction of visitors, the country is determined to regain its status as a preferred destination for travellers worldwide.

As the industry continues its journey towards recovery, stakeholders and authorities remain committed to implementing effective strategies that will propel Sri Lanka’s tourism sector to new heights and create a positive impact on the overall economy.

By: Staff Writer

Colombo (LNW): The Ceylon Petroleum Corporation (CPC) has recorded a profit of Rs. 43.4 billion for the first four months of 2023, according to the Mid-Year Fiscal Position Report issued by the Minister of Finance.

The average import price of crude oil in the global market dropped further, from USD 81 per barrel in December 2022 to USD 78.5 per barrel in March 2023.

 However, the total petroleum bill, which is close to USD 1,599.7 million, represented about 30 percent of total imports into the country during the first four months of 2023 with a 16.8 percent drop compared to year on year.

The imports of petroleum and petroleum products by the CPC for the first four months of 2023 amounted to USD 877.35 million, representing nearly 54 percent of the total petroleum bill.

A decrease in the import cost in line with the decline in international oil prices has resulted in improvements CPC working capital rotations during the period starting in January 2023; it has also led the CPC to record a profit of Rs. 43.4 billion for the first four months of 2023.

Further, due to the weak financial position and liquidity constraints of the CEB and SLA, the total outstanding liability, including CEB and SLA, to the CPC increased to Rs. 238.9 billion.

On the other hand, the CPC has residual liabilities to the Government for its on-lending of the Indian Line of Credit facility (USD 697 million), liabilities to the National Iran Oil Company (USD 251 million), and the Bank of Ceylon (Rs. 26.2 billion) at the end of April 2023.

Therefore, CPC was unable to settle the Indian Credit Line worth USD 697 million, which was used to facilitate fuel importation.

 Hence, the treatment of these cross liabilities between the Central Government, CEB, SLA, and CPC would be addressed in the Government’s overall strategy for restructuring the balance sheets of key SOEs.

The Government has signed agreements with two established companies in petroleum producing countries for the importation, storage, distribution, and sale of petroleum products through the predetermined distribution dealers operated in Sri Lanka.

This will introduce competition in petroleum retail in Sri Lanka and improve service standards for the benefit of the consumers.