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ADB reaffirms its commitment to bolster the recovery of SMEs

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By: Staff Writer

Colombo (LNW): The Asian Development Bank (ADB) reaffirmed its unwavering commitment to bolster the recovery of stressed small and medium enterprises (SMEs) and praised Sri Lanka’s steadfast dedication to rebound from the economic crisis.

The assurance was extended by ADB Country Director Takafumi Kadano yesterday during a meeting with State Minister of Finance Shehan Semasinghe held at the Finance Ministry.

Kadano shared insights into forthcoming projects in Sri Lanka, particularly in the power sector. Recognising Sri Lanka’s commendable efforts in steering clear of a crisis, he highlighted the potential for progress that often emerges from adversity and expressed optimism about the ability to transition towards a sustainable, long-term economic trajectory.

With an unequivocal commitment to sustained support, Kadano underscored that the ADB’s assistance would remain resolute, especially in alignment with the initiatives of the International Monetary Fund. 

He reiterated the ADB’s keen interest in conducting an in-depth study of Sri Lanka’s SME sector to identify and implement effective support mechanisms.

State Minister Shehan Semasinghe also appreciated ADB for continued assistance throughout the crisis and subsequent recovery phases. 

Shedding light on the segment most severely impacted by the crisis, he emphasised the vital role of SMEs in the economic fabric, urging their swift revitalisation. He highlighted the Government’s efforts in providing concessions to revive these enterprises and underlined the pressing need for additional support.

Sri Lanka is seeking the Asian Development Bank (ADB) aid to200 million he  said adding  that finnac ministry is discussing with ADB for a credit guarantee scheme worth $200 million, to support SMEs.

“This scheme will be established and implemented by the Ministry of Finance. The discussions are progressing well,” he disclosed.

He added that the government is very concerned about the SME sector and is keen to get them out of the rut. “The SME sector is hit the hardest by the pandemic, and the ensuing economic crisis.

We are looking at many avenues to emerge from the bad situation.”  He also said the government is expecting the banks to pass on the benefits to the sector by lowering inflation rates and reducing interest rates.

“We do understand the banks’ constraints but with improving economic indicators, we expect the banking sector to help out the small and medium entrepreneurs.”

Sea water purification project to commence in Jaffna

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By: Staff Writer

Colombo (LNW): The National Water Supply and Drainage Board (NWSDB) of Sri Lanka is set to launch a project that purifies seawater for the daily use of people in the Jaffna district.

The plant will provide safe drinking water to 300,000 people belonging to 60,000 families of the city of Jaffna and its surrounding urban and rural areas.

NWSDB adds that initial work of the project has begun, and will be completed early next year.

A cabinet paper has also been submitted for the calling for tenders related to pipelines for the project.

As soon as it is approved, tenders will be called to design, build and operate the first-ever desalination plant through sea water reverse osmosis in Jaffn

With a capacity of 24,000 m3, the facility, partly financed by the Asian Development Bank (ADB), will be designed-built over a period of two and half years,

The project  is aimed to channel approximately 27,000 cubic meters per day (m3/day) of raw water approximately 50 kilometers (km) from Iranaimadu irrigation tank in Jaffna peninsula to treat and distribute drinking water to the water scarce Jaffna and nearby towns.

The farmers benefiting from the tank have raised concerns on the water adequacy in the tank to share with drinking water needs in the Jaffna peninsula.

However, considering the concerns of farmers, the water abstraction rate reduced from 50,000 to 27,000 cubic meters per day.

Nevertheless, some farmer organizations continued their protest against abstraction of water from Iranaimadu tank for the drinking water project. Severe drought experienced in Kilinochchi resulted in extremely low water level in the Iranaimadu tank, aggravating farmers concerns on water sharing.

Considering the urgent need of water supply facilities to Jaffna Peninsula and its suburbs,a mutual agreement has been reached with ADB to carry out a Rapid

Assessment on the feasibility of alternative water sources for JKWSSP mainly focusing on desalination of sea water.As a result of the rapid assessment study and their recommendations with regard to desalination, option will be suitable and changed the water source to surface water to sea water.

This project is developed to construct a seawater reverse osmosis (SWRO) plant to produce about 24, 000 cubic meters (m3) of fresh water per day.

Considering the proposed restructuring, the project meets the eligibility criteria for additional financing. 120 Mn USD approved by Asian Development Bank for the development of water supply infrastructure facilities.

Prefabricated terminal to be constructed at BIA to tackle congestion

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By: Staff Writer

Colombo (LNW): In an effort to alleviate the current severe congestion at Katunayake Bandaranaike International Airport (BIA), which is experiencing nearly 25,000 passenger arrivals and departures a day, Airport and Aviation Services (Sri Lanka) (Private) Limited has opted to swiftly construct a prefabricated terminal.

This interim solution aims to mitigate the congestion, until the completion of the ongoing construction of the second terminal.

According to a statement from the Ports, Shipping and Aviation Ministry, the prefabricated terminal initiative is projected to cost approximately Rs.15 billion and is anticipated to be completed within a span of six months.

Following the completion of the second terminal’s construction at BIA, the prefabricated terminal will be repurposed for domestic flight operations.On August 23, 2023, Ports, Shipping and Aviation Minister Nimal Siripala de Silva conducted an on-site inspection of the construction site to oversee the progress firsthand.

Airport and Aviation Services (Sri Lanka) (Private) Limited Chairman Major General (Rtd.) G.A. Chandrasiri and several other officials also participated in the occasion.

De Silva said with the prefabricated terminal, Sir Lanka would be able to handle the surge in traffic to BIA, until the second terminal comes into operation.

He also said the funds to be utilised for the construction of prefabricated terminal would be borne by Airport and Aviation Services (Sri Lanka) (Private) Limited.

The construction of the prefabricated terminal building on a temporary basis will be done within six months, said Minister Nimal Siripala de Silva.

While the existing airlines flying to Colombo have added frequency, new airlines have added Colombo to their radar. With the winter season coming and Sri Lanka averaging over 125, 000 arrivals per month the airport needed to be expanded.

“This is why we are building a temporary terminal building as the original building on the pipeline would take time to be opened pointed out.”

A state-of-the-art passenger terminal building on par with global requirements was planned and is expected to be opened in late 2024.

He said this while participating as the chief guest in a conference held at Katunayake Airport on Tuesday on how to contribute to the research process of this sector to take Sri Lanka’s aviation industry towards sustainable development through digitization.

The Minister also disclosed that novel methods should be used for the practical training and knowledge development of new professionals entering the aviation sector in Sri Lanka.

Many countries in the world are already using the research process to boost the aviation industry and to boost Sri Lanka’s aviation industry, universities, academics and industry experts should look at this segment.

Central Bank orders all banks to reduce the interest rates on lending

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By: Staff Writer

Colombo (LNW): Central Bank of Sri Lanka (CBSL) has issued an Order reducing the interest rates on lending products of all licensed commercial banks (LCBs) and licensed specialized banks (LSBs) with effect from August 25 (Friday).

Accordingly, the interest rates on pawning facilities, pre-arranged temporary overdrafts, credit card advances, and new and existing Sri Lankan Rupee (LKR)-denominated lending products are also reduced adequately.

This was mentioned in the Order issued by the CBSL on the maximum interest rates on LKR-denominated lending products issued on Friday.

In the recent past, the CBSL adopted several policy measures such as reduction of policy interest rates and the statutory reserve ratio, thereby facilitating a reduction in market interest rates.

Yet, despite the considerable easing of monetary conditions, the CBSL said interest rates on lending products of certain financial institutions continued to remain excessive and are not in line with the current monetary policy stance, posing challenges for individuals and businesses.

Accordingly, the CBSL’s Monetary Board issued an Order on the interest rates applicable on LKR-denominated lending products of licensed banks, directing them to reduce interest rate on pawning facilities to 18% per annum, pre-arranged temporary overdrafts to 23% per annum and credit card advances to 28% per annum commencing the next billing cycle.

The CBSL has directed all licensed banks to reduce the annual nominal interest rates applicable for all new and existing LKR-denominated lending products, excluding credit card facilities mentioned above and any other categories of lending products by at least 250 points by October 31, 2023 and further 100 basis points by December 31, 2023 in comparison to the interest rates that prevailed as at July 31, 2023.

However, if the annual nominal interest rate applicable to any LKR-denominated lending products as at August 25, or anytime thereafter is 13.5% or lower, the CBSL said it is not mandatory to give effect to the reduction required in the Order.

Further, in the cases where the applicable annual nominal interest rate as at the date of this Order or any time thereafter is 13.5% or less, the licensed banks are not supposed to increase the interest rates of such lending products from the level maintained as at August 25.

In addition, all licensed banks are instructed to reduce the penal interest rates charged on all lending products, including credit card facilities already granted, to a level not exceeding 200 basis points per annum, for the amount in excess of an approved limit or in arrears, during the overdue period, with immediate effect.

CID launches probe into Viranjith Thambugala’s assets

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By: Isuru Parakrama

Colombo (LNW): The Criminal Investigation Department (CID) has reportedly launched a probe into the assets of Viranjith Thambugala, owner of ‘Aura Lanka Herbals’, and a self-proclaimed holistic medical practitioner, investor, entrepreneur, a philanthropist and an internet personality.

The probe has been launched by the Illicit Asset Investigation Division of the CID on the orders of the Inspector General of Police (IGP).

Thambugala was recently driven into controversy followed by a storm of social media allegations involving an aloe vera plantation project, claiming that he was engaging in illegal activities through the project.

It is in this backdrop where the IGP’s orders come in that a probe be launched into his businesses and the manner in which his assets were earned.

Sri Lanka Original Narrative Summary: 27/08

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  1. Former CB Governor Ajith Nivard Cabraal says the present Govt and the Central Bank have “outsourced” the economic management of the country to the IMF: laments that the the most important macro-fundamental indicator of “Growth” is blatantly ignored by the present Govt at the behest of the IMF, and the people are seriously affected by the contracting economy.
  2. NPP & JVP Leader Anura Kumar Dissanayake says SL is now in the clutches of the IMF which functions under the USA, just as it was under British colonial rule where SL had no freedom or sovereignty to decide on its taxation or fiscal policies: asserts that when professionals questioned about the PAYE tax, the President and CB Governor admitted they couldn’t do anything about it and that the matter should be dealt with the IMF.
  3. Netherlands Ambassador Bonnie Horbach says around 3,000 items which were “collected” during the colonial period may be in museum vaults in the Netherlands: says that as a part of the recent policy of the Dutch Govt to return the stolen artefacts to their rightful owners, researchers from former colonies will be granted access to those collections: more than 13,000 items of value have been documented as being pillaged & stolen by Western Colonial Powers during 443 years of Colonial rule from 1505 to 1948.
  4. Karapitiya Teaching Hospital Consultant Psychiatrist Dr Rumi Ruban says there’s a risk of memory loss among children due to severe addiction to mobile phones and the internet.
  5. Agriculture Minister Mahinda Amaraweera says the poultry association has reduced the price of chicken by Rs.100 per kg: also says the import tax of Rs.75 per kg of maize has been reduced to Rs.25 by the Govt and that can be considered as the reason for the reduction.
  6. Ministry of Health says 50 more types of drugs that are in short supply will be imported within the next 2 weeks: currently, there is a shortage of 230 medicines in the medical supply sector.
  7. Finance State Minister Ranjith Siyambalapitiya says the review of the budget proposals will start from August 28: asserts the next budget will provide the necessary facilities to move the country’s economy from bankruptcy to positive: certain officials of the Govt & CB announced the country’s debt default on 12April’22.
  8. Asian Development Bank Country Director Takafumi Kadano reaffirms the ADB’s commitment to bolster the recovery of stressed SMEs: praises Sri Lanka’s dedication to rebound from the economic crisis: analysts point out that the Govt’s and IMF’s contractionary economic policies & debt default have severely crippled SMEs & more than 60% of the SMEs have already closed down or are facing imminent closure.
  9. State Minister for Primary Industries Chamara Sampath Dasanayake says gem and jewellery exports have recorded an income of USD 315 mn year-to-date, & recorded a growth of 34%, reaffirming its vital role in strengthening the economy.
  10. Tourism Development Authority says 109,954 tourists visited SL during the first 23 days of August’23, 191% higher than in August 22, in the immediate aftermath of the Aragalaya.

Hydro power running out amidst arid weather? CEB’s response

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By: Isuru Parakrama

Colombo (LNW): The generation of hydro power might face a standstill after a further period four weeks, were the prevailing arid weather conditions to continue, warned the Ceylon Electricity Board (CEB).

As of now, hydro power generation has dropped by 15 per cent, and the supply of power remains uninterrupted due to thermal power generation.

The water capacity of Samanala Wewa reservoir has dropped to 01 per cent, and those of Castlereigh reservoir, Victoria reservoir and Maussakele reservoir to 21 per cent, 25 per cent and 35 per cent, respectively.

J’Pura Uni’s NSP to modernise public university system presented to CoPE

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Colombo (LNW): The National Strategic Plan prepared by the University of Sri Jayawardenapura for the modernisation of the entire public university system has been handed over to the Committee on Public Enterprises (CoPE).

This was when the University of Sri Jayawardenapura was called before the CoPE on August 22 under the chairmanship of MP (Prof.) Ranjith Bandara.

In compliance with a recommendation given by the CoPE on March 24, 2023, the National Strategic Plan prepared by the University to modernise the entire public university system had to be presented to the Committee.

Education Secretary Nihal Ranasingha, Senior Professor Sampath Amaratunga, Chairman of University Grants Commission, Vice Chancellor of the Sri Jayawardenepura University, Senior Prof. M. M. Pathmalal and others were called before this Committee.

The Committee Chair stated that the responsibility of preparing a national strategic plan to modernise the state university system was handed over to University of Sri Jayewardenepura because it had a prestigious name for management and it should be considered as an honor given to that university by Parliament.

The CoPE Chief further stated that he would like to express his special thanks to the Ministry of Education, the Vice Chancellor of the Sri Jayawardenepura University, the University Grants Commission and the team led by Senior Professor Disa Bandara.

Senior Professor Disa Bandara pointed out that since each university has its own unique circumstances, it is possible to work according to this draft by paying attention to all those things.

The Committee informed the Education Secretary to appoint a task force within two weeks and give a report in this regard, in the background where the university system in this country is at risk of collapsing. The CoPE Chair also pointed out that small groups of students should not be allowed to bring down the entire universal system. Moreover, the CoPE Chief said that the University Grants Commission also has a responsibility to maintain the quality of the universities.

Furthermore, Prof. Bandara the CoPE Chief pointed out that about 50% of the universities in this country should become research universities.

Although there should be 12992 university professors, currently, only 6548 professors are employed, the Chairman of the University Grants Commission said. He also pointed out that since the same situation can be seen in the non-academic staff, it should be resolved.

With the economic crisis in the country, it has become a problem for professors to leave the country and at least 1000 professors should be recruited Chairman of the University Grants Commission further said.

State Minister Jagath Pushpakumara, Shantha Bandara, MPs Dayasiri Jayasekara, Eran Wickramaratne, Upul Mahendra Rajapaksha, Madhura Withanage, Prof. Charitha Herath were present at the Committee meeting held.

Public complaints on unlawful pyramid schemes: CBSL

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Colombo (LNW): The Central Bank of Sri Lanka (CBSL) which recently declared its utmost commitment for the cracking down of unlawful schemes said it has recently received many public complaints indicating that some schemes operating through online platforms are misleading investors int depositing money / investing in these schemes by stating factors such as indicated below, in an attempt to justify that they are lawful:

  • The scheme is protecting investors’ funds by adhering to the regulations of CBSL;
  • The scheme is paying the relevant taxes to the Government; 
  • Participants of the schemes have to pay a personal income tax from their funds to CBSL, in order to withdraw funds and if not, their funds would be frozen by CBSL; 
  • The scheme has had discussions with CBSL.

In response, the CBSL said it strongly denies the above statements and wishes to inform the public that there is no truth in these statements. 

The list of institutions licensed and regulated by CBSL is included in the CBSL website and the website of the Foreign Exchange Department and can be accessed through the following links. 

https://www.cbsl.gov.lk/authorized-financial-institutions

https://www.dfe.lk/web/index.php?option=com_content&view=article&id=82&Itemid=513&lang=en

The CBSL further advised public to please be vigilant and alert of these type of schemes, and not to engage with or invest in such schemes as the public is likely to lose hard earned money through being involved with such schemes. 

Govt focuses on providing a salary to pre-school teachers: Geetha

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PMD: The State Minister of Women and Child Affairs Mrs. Geetha Kumarasinghe emphasized that steps will be taken to provide formal training for pre-school teachers in order to boost early childhood development.

The state minister also pointed out that the government has focused on providing a salary for pre-school teachers as well.

These statements were made by the State Minister of Women and Child Affairs, Mrs. Geetha Kumarasinghe, during her participation in a press conference at the Presidential Media Centre (PMC) today (25) under the theme ‘Collective Path to a stable country’.

State Minister of Women and Child Affairs Geetha Kumarasinghe further said;

The government has paid more attention to the health of the children. Also, efforts are being made to raise the nutritional status of children. The government has already taken steps to launch a special nutrition program for children diagnosed with malnutrition. The government is also working to provide money to low-income families suffering from malnutrition to enable them to get nutritious meals. Arrangements have been made to provide financial assistance to identified families through the divisional secretaries located throughout the island.

Running pre-schools should be subject to certain regulations. The initial mental state of children is created by preschools. No one cares much about early childhood. That is why the government has decided to provide formal training to pre-school teachers. As in countries like Japan and Switzerland, the training level of preschool teachers should be brought to a higher level. It is also necessary to send them to such countries and provide them with proper training.

When starting a pre-school, it should be done under a legal framework. The pre-school teacher should be a graduate. They require their own specialized training. Some preschools have teaching assistants. Maybe that assistant was someone who had appeared for the regular exam. They have the experience of working with the head teacher for a long time. Therefore, we are negotiating with the Ministry of Education to provide them with good training as well as a salary. The mind of the teacher should be right. It also helps to increase the development of early childhood.

Some mothers leave their newborn babies on the streets. In other instances, they are killed. Do not do that. Give them to us. It is difficult to establish new child care centres based on the current economic situation. But attention is being paid to a system of taking care of children by creating separate places in government hospitals. Discussions are underway with the Ministry of Justice and the Ministry of Health in this regard.

Violence against women and child abuse in this country has risen to an alarming level. It has been suggested to conduct awareness programs on child abuse at the school level. When a schoolgirl or child is sexually assaulted, she hesitates to tell her parents. Maybe they will prefer to tell it to her best friend whom she trusts more. Therefore, schoolchildren should be consulted by programs on how to deal with this matter.

There are loopholes in the law regarding the abuse of women and children. Some women do not want to report such incidents to the police when they get abused. They feel ashamed when they go to present the complaint in public. In that regard, separate cubicles and women police officers have been deployed in every police station. Therefore, special attention and protection should be given to dealing with such women. Also, regarding the victimized women, the media should focus on acting under self-discipline in such a way that no one is prejudiced.

The previous program of providing nutritional support for pregnant mothers is being continued. Arrangements have been made to provide nutritional support to mothers registered in government maternity clinics. For this year alone, the government has allocated Rs. 11 million to provide nutritional support to pregnant mothers.