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Large-scale scandal on crude oil imports, politician involved!

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Covert operations are underway in collecting commissions through crude oil smuggling on a large scale amidst the severe difficulties suffered by the people due to the restrictions imposed on fuel imports triggered by the forex crisis in Sri Lanka, informed sources disclosed.

Our correspondents said that two crude oil shipments brought to the island recently are revealed to have ‘heavy’ crude oil, a type of oil that can only be refined into diesel and bitumen, when the Sri Lankan-based ‘Sapugaskanda’ Oil Refinery requires the ‘light’ crude oil type. The shipments have already been paid for the crude oil stocks they delivered, they added.

The Refinery being unable to turn ‘heavy’ crude oil into fuel would be disastrously a loss-incurring situation to the country, and the deal is revealed to have involved a powerful political figure in Sri Lanka, the sources added.

Following the staggering revelation, the party that exported the crude oil stock questioned as to why Sri Lanka approved the stocks during the quality check phase, had the type been inconsistent with the country’s requirement.

Accordingly, all officers responsible for the quality check phase of the crude oil import are likely to be facing an inquiry, sources further disclosed.

A barrel of this crude oil was obtained from Russia at a price of US $ 30 each and sold to Sri Lanka for US $ 95 each, transferring a profit of about US $ 60 each from one barrel into the accounts of the concerned politician and the company that supplied the stock, correspondents further told LNW.

MIAP

Gen. Shavendra Silva’s Father Passes Away

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Mr L. H Creasy Silva (93), former Chairman, Sri Lanka Transport Board (SLTB), husband of late Mrs Sumana Silva and beloved father of General Shavendra Silva, Chief of Defence Staff and former Commander of the Army, Mr Lakshman Silva, former Chief Executive Officer, Vardana Bank, Air Vice Marshal Ajantha Silva (Retd) of the Air Force and Mrs Neranjani Silva, Bank Manager passed away on Tuesday (13).

Late Mr Creasy Silva before his appointment as the SLTB Chairman from 1989 to 1993 also served earlier as an SLTB Regional Chairman. His remains are now lying at No 10, Rahula Mawatha, M. C. Road, Matale and the funeral takes place at Matale General Cemetery on Thursday (15) at 4.30 pm.

Fast demanding release of political prisoners marks seven days

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The fast launched by a group of Tamil political prisoners in Colombo Magazine prison demanding the release of prisoners arrested and detained for political reasons marks seven days today (13).

The fast is attended by inmates S. Udayasivam, U. Umasuthan, M. Parthiban, L. Imbaraj, Y. Robinson, R. Sayanthan, P. Naguleswaran, S. Sudaharan, U. Sathiskumar, S. Sasithan, R. Vevekanandan, Y. Dudley and L. Ajanthan.

The health condition of the fasting prisoners has deteriorated very seriously, relatives who met these inmates on the International Day for Prisoners’ Justice told media.

Despite many promises by the previous good governance regime as well as former President Gotabaya Rajapaksa regarding the release of those arrested and detained for a long time on political grounds, including the victims of the war in the North, none of those promises have been fulfilled to date, they pointed out.

Some of the arrestees on charges of being in the LTTE organisation were reported to be those who were forcibly recruited to the terrorist movement at the age of 08 – 09, and some prisoners have been in custody for almost three decades with or without being prosecuted.

Relatives of those detained engaged in a fast in front of the Northern Province Governor’s Office in Jaffna yesterday (12), extending support to those engaged in a fast in Colombo. They demanded the Governor of the Northern Province to immediately intervene in releasing their loved ones who are being detained under many provisions, including those of the controversial Prevention of Terrorism Act (PTA).

MIAP

Operations at National Hospital for Respiratory Diseases in crisis due to suspects accused of assaulting SDIG Tennakoon

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A request was made before the Colombo Fort Magistrate Court yesterday to release the two suspects remanded in connection with the assault on Senior Deputy Inspector General of the Western Province Deshabandu Tennakoon.

The motion was presented to the Court via the lawyer appearing for the suspects, who are reportedly technicians working at the Colombo National Hospital for Respiratory Diseases. The lawyers told the Court that the arrest of these two technicians has put the day-to-day operations at the Respiratory Clinic in a complete crisis.

Further imprisonment of these two suspects has completely stopped the collection of samples related to respiratory diseases from all hospitals around Colombo to the Welisara Clinic and the laboratory services have been stalled with their absence, the lawyer told the Court.

A letter requesting the two’s presence for the services signed by Dr. Gauri De Silva of the Respiratory Clinic has also been presented to the Court.

The lawyer appearing for the suspects further told the Court that his clients have no connection whatsoever to the assault on the SDIG, requesting that the two be released on bail considering the service expected by the Health Sector.

The officers from the Criminal Investigation Department (CID) appearing before the Court for evidence stated that the suspects have been remanded till September 15 for an ID parade.

Considering the facts, the Magistrate ordered that the bail application be considered on the 15th.

MIAP

Govt. earmarks loss making SOEs for restructure, merge and liquidate

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The government will soon implement a special scheme for salvaging loss- making State-Owned Enterprises (SOEs) via restructuring or privatization opening up its management or ownership while liquidating failing institutions with insolvency issues that cannot be resolved efficiently.

Some of these 39 institutions out of 55 business enterprises with similar functions or covering the same business area will be merged under this scheme .

Re-activate the Statement of Corporate Intent (SCI) process for key 52 SOEs, excluding CEB, CPC, and Sri Lankan Airlines, as they are under different efforts to restructure, to closely monitor the set targets.

These difficult but necessary measures pertaining to SOEs will no doubt be challenging to address, but failing to do so would create catastrophic risks, particularly for financial sector stability, and will entail even higher taxation burdens on the public in the future,

At least 10 out of 55 SOEs are earmarked for liquidation following recommendations of the Auditor General’s department and five of the 55 SOEs classified as “strategically important “will be restructured under a public private partnership model, an order issued by the Public Enterprises Department Board revealed.

The 10 bankrupt SOEs earmarked for liquidation are Sri Lanka Rubber Manufacturing & Export Corporation, Janatha Fertilizer Enterprises Ltd, Lanka Salusala Ltd, State Trading Corporative Wholesale Co. Ltd, Lanka Fabric Ltd, North Sea Ltd, Ceylon Ceramic Corporation, Lanka Cement Company, Lanka Cement Corporation and Lakdiva Engineering Co. Ltd.

During the first four months of 2022, the key 52 SOEs out of the total of 55 reported a significant loss of Rs. 859 billion which is a significant deterioration compared to the loss of Rs. 13 billion in the corresponding period in 2021, a Finance Ministry fiscal report indicated.

SOE reforms is more essential for the country at present in view of the much-needed economic recovery, where the financial system should support and incentivise other important public sector institutions that face financial difficulties, a senior Ministry official said.

The new administration has given priority to improve the productivity of SOEs and it has identified 39 SOE’s with poor financial performance for restructuring due to, transparency and accountability issues and those entities have become a burden to the state coffers.

Therefore, structural reforms are necessary to make such SOEs more financially viable, competitive, productive and innovative, he added.

The major structural reforms in loss-making state enterprises for economic stability were one of the commitments that Sri Lanka has to fulfill in accordance with the economic reforms programme agreed upon with the International Monetary Fund (IMF).

Taking prompt action towards this end, the government has taken measures to establish a new unit to restructure troubled SOEs.

The move was an immediate fulfillment of a 2022 interim budget proposal with an allocation of Rs. 200 million for the implementation of public enterprise reforms via this new unit at the finance ministry.

It was proposed to re-activate the Statement of Corporate Intent (SCI) process for 50 key SOEs, excluding the Ceylon Electricity Board (CEB), the Ceylon Petroleum Corporation (CPC), the national carrier— Sri Lankan Airlines and Transport Board , as they are currently undergoing the restructuring process.

The objective of the new unit is to help to identify ways to reduce the financial burden on the Treasury and to provide necessary guidance and support in the restructuring process of the SOEs.

It also added that this situation has led to severe pressure on the Treasury, and thus an alternative mechanism should be introduced for the efficient and effective functioning of Government-operated businesses.

Adding to the problem, only one in 10 SOEs have made their financial information public , raising questions of transparency.

ADB agrees to support several sectors in SL

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The Asian Development Bank (ADB) promised to provide support for Sri Lanka to recover from the economic crisis befallen it, during the preliminary discussion held between the bank and the government of Sri Lanka at the Presidential Secretariat yesterday (12).

Accordingly, the ADB Bank stated that it can provide support and bilateral cooperation to the government of Sri Lanka to overcome the crisis.

The discussion was held with a group of representatives including President Ranil Wickremesinghe and Kenichi Yokoyama, the Director General of the South Asian Department of the ADB.

Chen Chen, Director of the Sri Lanka Mission, Utsav Kumar, Deputy Director of the Sri Lanka Mission and Chief of Staff to the President Sagala Ratnayaka also attended the meeting.

MIAP

FAO and WFP suggests SL Govt to implement food assistance programmes

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An estimated6.3 million people in Sri Lanka are facing moderate to severe acute food insecurity and their situation is expected to worsen if adequate life-saving assistance and livelihood support is not provided, the Food and AgricultureOrganization of the United Nations (FAO) and the United Nations World FoodProgramme (WFP) warned today in a new report.

Two consecutive seasons of poor harvests led to a nearly 50 percent drop in production coupled with reduced imports of food grains due to foreignexchange constraints, according to the joint FAO/WFP Crop and Food Security Assessment Mission (CFSAM) report.

The report notes that immediate food assistance and livelihood programmes – including through existing social assistance mechanisms – should be critical to enable households to access nutritious food – particularly moderately and severely acute food insecure ones.

Without assistance, the food security situation is expected to deteriorate further, particularly during theOctober 2022 to February 2023 lean season, driven by poor harvests of staple foods, in particular paddy rice, and the ongoing economic crisis.

“In order to avert a further deterioration of food security conditions and to support restoration of agricultural production, livelihood assistance targeting smallholder farmers should remain a priority,” said FAORepresentative in Sri Lanka Vimlendra Sharan.

He added that “with around 30 percent of the population depending on agriculture, improving the production capacity of farmers will ultimately boost the resilience of the agricultural sector, reduce import requirements amid shortages of foreign currency reserves and avert the rise in hunger.

” WFP’s top priority is to provide immediate food and nutrition assistance to the most at-risk communities to prevent a further deterioration of their nutrition,” said WFP Representativeand Country Director in Sri Lanka, Abdur Rahim Siddiqui.

At the request of the Government, the joint Crop and Food SecurityAssessment Mission visited all 25 districts in the country between June andJuly 2022 to analyze agricultural production levels in 2022, particularly of main staple cereals, as well as to assess household food security conditions.

Production of paddy rice, the main food staple, is forecast at 3 million mt in 2022, the lowest level since the 2017 drought-affected harvest, mostly due to low yields following reduced application of fertilizers, the report finds.

Production of maize, mostly used as animal feed, is about 40 percent below the past five-year average, with negative effects on poultry and livestock production.

Likewise, production of vegetables, fruits and export-oriented crops,such as tea, rubber, coconut and spices, is well below average, causing a significant decline in households’ income and export revenues.

Prices of most food items have been on a steady rise since the last quarter of 2021 and reached a new record high in August 2022, with the year-on-year food inflation rate at nearly 94 percent.

The total cereal import requirement in 2022 is estimated at 2.2 million mt. In the first six months of 2022, more than 930,000 mt of cereals were imported, leaving an outstanding import requirement of 1.27 million mt.

Given The persisting macroeconomic challenges, there is a high risk that the remaining import requirement will not be met.

The key recommendations by the joint FAO/WFP Mission are the immediate provision of food or cash-based assistance to vulnerable and marginalized communities, including pregnant and breastfeeding women, women-headed households and persons with disabilities, to help them meet their immediate food and nutrition needs.

The report also recommends the immediate provision of agricultural inputs, including fertilizers, focusing on smallholder farmers.

The report outlines the need to support households to establish homegardens and backyard gardening to enhance their nutritional status, while providing adequate amounts of fuel to ensure effective planting, harvesting,transportation and processing of food crops.

The report suggests providing high-nutrient animal feed, vaccines and veterinary health kits at subsidized prices to livestock owners, especially dairy and poultry to mitigate the impacts of the feed shortages.

Support for the resumption and continuation of national nutrition programmes such as school meals, which faced disruptions due to funding constraints, were also highlighted as a priority

Sep. 19 declared a public holiday honouring Queen Elizabeth II

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September 19 (Monday) has been declared as a special public holiday in memory of Her Majesty Queen Elizabeth the Second, the longest serving monarch in Britain, who passed away last week.

Her Majesty’s funeral is set to be held on September 19 and the date has also been declared as a national day of mourning.

The announcement was made by the Ministry of Public Administration and Home Affairs.

MIAP

SL Apparel sector moves closer to reach the US$ 6 billion revenue target

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As Sri Lanka struggles with the ongoing economic crisis, the country’s trade balance recorded a surplus last July. While this surplus reflects the continued decline in import expenditure, it is also reflective of the contribution the apparel industry continues to make towards Sri Lanka’s economic recovery and growth.

Overall, Sri Lanka has attracted more than $228m in FDI during the first quarter of 2022, a 17% increase compared with the corresponding period.

Sri Lanka has set a target of US$6 billion for the apparel industry export revenue for the year 2022.

With seven months in to the 2022, As per the Export Development Board of Sri Lanka, by end of July 2022, total value of apparel exported stands at US$3.4 billion.

It includes, US$1.4 billion to USA, US$ 965 million to EU, US$455 million to UK and another US$485 million to other countries such as Middle East, Japan, and Australia.

This leaves US$2.7 billion to be made over the period from Augustto December this year as compared to year on year (YoY) figures, for the first seven months, apparel exports have increased to all the destinations. This is encouraging and needs to keep the trend going, industry sources said.

According to calculations made by the Joint Apparel Association Forum (JAAF), total apparel exports in July 2022 (USD 522.14 million) experienced a 22.4% increase in comparison to July 2021 apparel exports ($425.75million).

The exports to Sri Lanka’s major apparel export markets – the US, EU and the UK and other countries recorded an increase of 16.93%, 32.3%, 29.32%, and 15.77% respectively.

Apparel & Textile exports increased by 19.73% to US$ 2,967.39 Mn during the period of January to June 2022 compared to the same period of 2021.

Except Made-up Clothing Accessories (-8.7%), Yarn (-21.38%) and Textile Floor Coverings (-3.28%); exports of other sub categories of Apparel & Textiles sector increased.

Secretary General of JAAF, Yohan Lawrence highlighted that trade agreements are essential to sustaining the performance of Sri Lanka’s apparel exports.

Sri Lanka is to benefit from UK’s new Developing Countries Trading Scheme (DCTS) and the apparel industry has consistently highlighted the importance of retaining GSP+ post-December 2023.

The current schemes unfortunately only have a utilization of around 50% for apparel due to the restrictions on the Rules of Origin on fabric which mean that only fabric from a SAARC country are permitted for cumulation purposes.

JAAF has highlighted this constraint and has requested that this aspect be addressed in future iterations of the GSP scheme.

As per the Central Bank Annual Report 2021, of Sri Lanka’s industrial exports, textiles and garments amount to 43.5%. Textile and garments export value in the same year amounted to USD 5,435.1 million.

The resilience of the apparel industry, along with policy support received by the government amidst the prolonged crisis, has enabled the industry to continue this positive start to 2022, while aiding the country’s economy.

Social welfare schemes go through reforms benefiting vulnerable groups

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After a methodical review, the Government will soon overhaul the existing social welfare schemes and their benefits targeting delivery of subsidies to the poor and vulnerable communities.

The identification of needy recipients countrywide is to be made via a credible procedure while evaluating existing schemes without political differences or favouritism, Finance Ministry sources divulged.

The ministry is in the process of establishing transparent and objective criteria to identify recipients of welfare support to ensure that relief is received by the most deserving households, a senior official said.

The improved targeting will enable higher allocations to recipients and will be in the form of cash transfers directly to the bank account of the recipient. This scheme with a strong social safety network is expected to be implemented in the coming months, he disclosed.

The aim is to implement an adaptive social protection network system through use of the government’s and international financial agency funds which can quickly provide support to vulnerable groups and provide relief for communities affected by the economic crisis.

The assistance of the World Bank and the Asian Development Bank has been mobilized through its repurpose project funds for emergency spending on social protection needs of these two affected poorest of the poor sectors.

The Welfare Benefit Board will introduce a new QR code system under Finance Ministry criteria soon for the identification of those in actual need of financial assistance due to the current economic crisis, among the recipients of Samurdhi, Elders’ and the Physical Disability allowances.

Chairman of the Welfare Benefit Board, B. Wijayarathne said it is estimated that nearly 3.9 million families will apply for this programme.

It will include the 1.75 million Samurdhi beneficiary families, around 416,000 elderly, about 72,000 disabled persons and about 49,000 other persons.

A data system is to facilitate the subsidy programme to the needy people in a targeted manner, he said adding that the aim is to evaluate the number of beneficiaries with all this data.

The exact amounts of cash subsidy for these vulnerable groups under this new scheme are yet to be decided, the official said.