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Colombo Port City Economic Commission forges ahead

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Colombo Port City Economic Commission forges ahead

The Colombo Port City Economic Commission (CPCEC) has, within the first six months of operation, made considerable progress both in terms of commercializing Southeast Asia’s most ambitious mixed development as well as finalizing world-class best practices to fast-track approvals and investor facilitation. 

Appointed by President Gotabaya Rajapaksa in June last year, the CPCEC has received 31 out of the 74 land plots technically completed by the Project Company – CHEC Port City Colombo Ltd. 

In turn, the commission has released six plots out of the 31 on a 99-year lease basis, generating $ 200 million in sales revenue with a collective investment commitment of $ 600 million.

The seven-member commission headed by Gamini Marapana PC has also identified all 74 primary development plots as Businesses of Strategic Importance, entitled to the maximum benefits permissible under Section 52 of the CPCEC Act.

In terms of actual projects taking off, the commission said construction work had begun on the region’s first Downtown Duty-Free (DF) mall, for operation by two of the world’s leading DF operators, positioning the Colombo Port City as a regional shopping destination.

Overall, the Port City project is heralding a new era of development in keeping with the vision of ‘Building a World-Class City for South Asia’.

Among key initiatives to fast-track investor facilitation are the incorporation of Special Port City-designated shell companies for smooth investor transfers, establishing designated bank licensing terms, allowing secure, unrestricted foreign currency accounts for investment in the Port City and expediting approval, investor agreement and licensing processes for potential investors and authorized persons.

“The absence of restrictive exchange controls, a preferential tax system with zero tax on personal income, remuneration in foreign currency (FC), and flexible long-term visas for foreign workers and their families coupled with the Sri Lankan lifestyle has generated significantly in the project from international investors,” a spokesman for the Commission said.

He said that the establishment of the Colombo International Financial Centre in February 2022 and associated exchanges would soon stimulate the flow of foreign currency through the Port City, creating employment and adding substantial value to the broader economy over time.

“Our current focus is on identifying and creating compelling value propositions in physical infrastructure development, banking and financial services, knowledge export and other key sectors, targeting reputed anchor investors in each,” a spokesman for the Commission said. 

He said the Commission strives for transparent and efficient processes in setting up businesses, condominium ownership, gaming and leisure activities and city management that would be globally competitive and welcomes all input towards achieving its objectives.

 In the first six months, the Commission earned income to fully reimburse the Rs. 400 million advances received to set it up.

A Special Port City e-business and Virtual City concept has been completed and submitted for peer review to the Government of Sri Lanka whilst the Commission has partnered with a leading global technology company to deploy a state-of-the-art digital platform for all-inclusive investor engagements.

The Spokesman said the Commission was collaborating with SLASSCOM to brand IT/KPO as a thrust sector for the Port City by developing policies conducive to attracting world-class technology companies to invest in the Port City and to partner with Sri Lankan companies for maximum knowledge creation, transfer and export centred around a ‘Colombo Tech City’ concept promoting the nation’s drive of creating Sri Lanka into a Green IT Hub.

The commission also engaged the Sri Lankan Air Force on flight control management for commercial and emergency (rotorcraft-vertical) flight movement to and from the Port City, whilst separately conducting a feasibility study with the Sri Lankan Navy on defining management protocols for sea access and concerning the internal waterways of the Port City.

One of the generators at the Kelanitissa Power Plant temporarily shut down due to the shortage of fuel

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One of the generators at the Kelanitissa Power Plant temporarily shut down due to the shortage of fuel

The Ceylon Electricity Board (CEB) says that one of the generators at the Kelanitissa Power Plant has been temporarily shut down due to a shortage of fuel.

A 150 MW generator has been stopped.

However, due to this, there will be no need for a power cut during the daytime today (19) and the CEB will decide in the afternoon whether there will be a power cut at night.

Another huge record from the Colombo Stock Exchange

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Another huge record from the Colombo Stock Exchange

For the first time in history, the market capitalization value of the Colombo Stock Exchange crossed the Rs. 6 trillion mark yesterday (18).

Accordingly, the market capitalization of the Colombo Stock Exchange at the close of trading yesterday was 6.04 trillion rupees.

The All Share Price Index of the Colombo Stock Exchange was at 13457.20 and the S&P SL20 Index was at 4618.45 yesterday, the highest levels in the history of the two relevant indices.

A doctor arrested in connection with the hand grenade incident at the Borella church

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A doctor arrested in connection with the hand grenade incident at the Borella church

A retired doctor has been arrested by the police in connection with the planting of a hand grenade at the All Saints Church in Borella.

The doctor was arrested in Piliyandala in connection with the incident, police said. The doctor has been arrested in connection with the information obtained during the interrogation of a suspect who was recently arrested in the Panamura area in connection with this incident.

The 65-year-old suspect who was arrested from the Panamura area was said to have worked as a security guard at the doctor’s private medical center.

Investigations have revealed that the doctor had paid the suspect for the hand grenade and its placement, but the reason for this has not been revealed yet, police said.

Both suspects are currently being held at the Ports Police and the Colombo South CID is conducting further investigations.

Earlier, a person who worked at the church had been arrested in connection with the incident and the police had stated that the person had confessed that he had planted the hand grenade.

Whatever Gammanpila tells the media, CEB will get fuel. We are friends after all! – Minister Lokuge

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Whatever Gammanpila tells the media, CEB will get fuel. We are friends after all! – Minister Lokuge

Energy Minister Udaya Gammanpila has told the media that he would not supply fuel to the CEB if they are not paid in dollars, but Power and Energy Minister Gamini Lokuge said that an agreement had been reached at the Cabinet meeting to provide the required amount of fuel to the CEB.

Question: Did you talk about the fuel issue?

“We did, we are ready to bring fuel”

Question: Will we lose electricity?

“No. Not today”

Question – Tomorrow?

“I want to see it tomorrow morning. Somehow we will bring in the fuel we need to meet our demand without a shortage. They will provide fuel from the filling stations of the Petroleum Corporation with no shortage. And at the same time, they will give us the amount of fuel that we need. “

Q. But the Minister of Petroleum says that he will not provide fuel for the CEB?

“Even though that’s what he says to the media, we are friends after all. There won’t be a problem”

The Minister of Power and Energy Gamini Lokuge stated this while answering several questions raised by journalists while leaving the Cabinet meeting held last night (18).

Probe into Madura and Arundika accused of bringing ‘Ethanol Jayalath’ to SL…?

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Probe into Madura and Arundika accused of bringing ‘Ethanol Jayalath’ to SL…?

Sources say that the President has summoned a report regarding a Colombo District Parliamentarian and a State Minister who had brought the notorious ethanol smuggler Jayalath Krishan Peiris alias Ethanol Jayalath from Dubai to Sri Lanka and produced him in court and released him on bail. The court had issued a warrant for his arrest in connection with a foreign liquor racket.

In 2020, an investigation was launched against Ethanol Jayalath for tax evasion by filling and re-exporting colored water to world-famous branded liquor bottles, and he had fled the country, evading police and the courts.

The fugitive Ethanol Jayalath has been brought back to SLPP MP Madura Vithanage who visited the Expo exhibition in Dubai recently and has been admitted through the VIP terminal at the Katunayake Bandaranaike International Airport. He was taken care of by State Minister of Kitul, Coconut, and Palmyra Arundika Fernando at the other end, and referred to the CID, produced him in court, and released him on bail.

However, following the media coverage of the incident, President Gotabhaya Rajapaksa had ordered Major General G.A. Chandrasiri, Chairman of the Airport and Aviation Company, to submit a full report on the incident.

According to sources, the President has received a report with CCTV footage of the airport and will soon take a tough decision regarding Madura Vithanage and Arundika Fernando.

“Foreigners Only” tourist establishments warned with a plan to develop hospitality assets

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“Foreigners Only” tourist establishments warned with a plan to develop hospitality assets

The Sri Lanka Tourism Development Authority has warned that hotels and restaurants that follow the ‘Foreigners Only’ policy will face a license cancellation.

In a statement on Tuesday (18) SLTDA said it received complaints regarding discriminatory practices followed by some tourist establishments against Sri Lankan citizens, and a decision was made to take action over these complaints.

SLTDA said after a formal complaint is made and if the establishment is found to have been discriminatory, Sri Lanka Tourism Development Authority will NOT hesitate to suspend or cancel the licenses, including informing travelers about it and notifying Online Travel Agencies to abstain from taking any bookings.

At the same time, Sri Lanka Tourism Development Authority  has urged the domestic travelers also to ensure that the tourist property is well taken care of, that we adhere to the hotels requirements and be brand ambassadors for the industry and country.

 Tourist establishments could make complaints against such guests who neither care for the property nor adhere to stated requirements of the establishments and SLTDA will take necessary action against such guests, the authority said.

 Selendiva Investments Ltd. has called for investment brokers to facilitate investors for the development of heritage properties and hospitality assets.

Stockbroking firms, investment consultants, investment banks and brokers are invited collectively for the registration of investment brokers, to refurbish and restore selected assets in the hospitality sector, which include the Grand Oriental Hotel (GOH), the York Building, Hilton Colombo and Hilton Sports Centre. 

As per Finance Ministry sources, Selendiva aims to commence the restructuring process for heritage properties and assets in the hospitality industry under a Special Purpose Vehicle (SPV) – Selendiva Leisure Investments – by attracting investors and operational experts.

The prospective investment brokers should have a detailed profile of investment broker (corporate profile or detailed CV) and any notable transactions executed. The brokers will be paid professional fees on a tiered basis, based on successful introduction of viable investors. For investment up to Rs. 100 million a professional fee of 0.64%, and for investments above Rs. 100 million a fee of 0.20%. Interested investment brokers should submit their information on or before 14 February 2022.

The development of the over 150-year-old colonial heritage properties – GOH and York Building are part of the integral development in the proposed ‘Heritage Square’ in Colombo. This refurbishment project is expected to have 110 luxury rooms, five conference rooms and five food-and-beverage (F&B) outlets. The building will also have 26 high-street retail outlets and 30 branded residents/suites.

“The key objective of the initiative to refurbish and restore York Building which houses the famed and historically renowned GOH, and to pay tribute to its former glory,” sources said.

Selendiva Investments Ltd. is a State-owned Enterprise (SOE) and has the Treasury Secretary of the Finance Ministry as the sole shareholder. It was formed in March 2020, following approval of the Cabinet of Ministers.

Government averts immediate default; calls to engage with IMF rife

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Government averts immediate default; calls to engage with IMF rife

As Sri Lanka avoided an immediate debt default, averting a massive crisis, the country’s policymakers should now make use of the breathing space provided by the Indian credit lines to the tune of US $ 1.9 billion to engage with its creditors.

It should be now equipped with an International Monetary Fund (IMF) programme, to chart a durable and a sustainable path for foreign debt management, according to several eminent economists.

India last week confirmed a US $ 400 million swap line, under the SAARC currency swap arrangement and a deferral of A.C.U. settlement of US $ 515.2 million by two months, which would temporarily stop the country’s foreign reserves bleeding.

During the weekend, India announced the extension of further financial support with two bilateral funding lines—US $ 1.0 billion assigned for importation of food, essential items and medicines and US $ 500 million for importing fuel from India.

But all is not well with Sri Lanka’s external sector. Sri Lanka approximately has a US $ 1.6 billion monthly import bill and US $ 6.1 billion worth of foreign obligations to be settled during the remainder of 2022, including a billion dollar sovereign bond maturing in July.

As the path for the tourism industry that has a US $ 4.5 billion potential is still uncertain, with the direction of the pandemic, Sri Lankan policymakers will have to work harder to deal with the country’s external debt, which has bunched up till 2025.

The Indian credit lines and debt deferment provide Sri Lanka a delayed opportunity to engage with its lenders to negotiate a durable and a less painful path for foreign debt and broader economic reforms.

“Now SL has 2 months of breathing time & must settle to hard economic reforms plus honouring its promises to India to realise full gains; It Should realise India can’t fully bailout SL; time to use space for negotiating with IMF for a permanent solution,” said former Central Bank Deputy Governor Dr. W.A. Wijewardena on Twitter.

As Sri Lanka avoided an immediate debt default, averting a massive crisis, the country’s policymakers should now make use of the breathing space provided by the Indian credit lines to the tune of US $ 1.9 billion to engage with its creditors.

Sri Lanka receives US$2.4 billion worth of support from India

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Sri Lanka receives US$2.4 billion worth of support from India

Finance Minister Basil Rajapaksa received the assurance of Indian External Affairs Minister Dr. S. Jaishankar that his country is extending US $ 2.4 billion worth of support from India with its recent relief package.

Details of the fresh assistance package were discussed and finalized during their virtual meeting, which was a follow up to Rajapaksa’s visit to New Delhi last month.

A statement from the Indian High Commission said both Ministers positively noted the extension of $ 400 million to Sri Lanka under the SAARC currency swap arrangement and deferral of A.C.U. settlement of $ 515.2 million by two months, which would assist Sri Lanka.

Separately, the two Ministers also reviewed the progress in extending the Indian credit facility of $ 1 billion for importing food, essential items and medicine and $ 500 million for importing fuel from India.

Rajapaksa had recalled India’s long standing cooperation with Sri Lanka and deeply appreciated the gestures of support.

He welcomed Indian investments in Sri Lanka in a number of important spheres, including ports, infrastructure, energy, renewable energy, power and manufacturing, and assured that a conducive environment would be provided to encourage such investments.

In this context, both Ministers noted that the recent steps taken by the Government of Sri Lanka for jointly modernizing Trincomalee Oil Tank Farms would boost confidence of investors, apart from enhancing Sri Lanka’s energy security.

The two Ministers agreed to remain in close touch for guiding mutually beneficial bilateral economic cooperation towards long-term economic partnership for shared progress and prosperity, the Indian High Commission added. 

Ruling out default or immediate rescheduling, Finance Minister Basil Rajapaksa assured the public and the private sector that essential imports would be sourced whilst servicing the country’s debt. 

He pointed to the record $ 21 billion in imports last year despite the challenging foreign reserves situation as well as all-time high exports of over $ 12 billion. 

“The impressive export performance proves that the required imported inputs have been facilitated,” the Finance Minister added. 

Basil’s assurance comes amidst fresh concerns over reliable supply of fuel, especially for thermal power generation, as well as continuous complaints by the private sector that banks don’t have adequate foreign exchange to open Letters of Credit in a timely manner. 

However, the Finance Minister’s confidence appears to stem from his successful online discussion with India’s External Affairs Minister Foreign Secretary Dr. S. Jaishankar on Saturday where the giant neighbour assured forex support to the tune of $ 1.9 billion.

The Central Bank had been boosting reserves to over $ 3 billion by the end of last month. China, as well as Japan, has also assured support to Sri Lanka. 

Of the nearly $ 7 billion total debt repayment scheduled for this year, the $ 500 million International Sovereign Bonds (ISBs) mature on Tuesday 18.

 The CB by Monday 17 had already placed the funds for settlement. Another $ 1 billion worth of ISBs mature in July. 

Sri Lanka repaid $ 2 billion worth of maturing ISBs each in 2020 and 2021 whilst overall debt repayment amounted to approximately $ 6 billion in the past two years. Sri Lanka faces $ 25 billion in sovereign foreign currency obligations until 2026. 

Central Bank pays US$ 500 million ISB arising the need to seek IMF assistance

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Central Bank pays US$ 500 million ISB arising the need to seek IMF assistance

Sri Lanka has paid off USD 500 million  International Sovereign Bond (ISB) that matured today (January 18), says the Central Bank Governor.Ajith Nivard Cabraal stated this in a tweet published on his official account.

 Meanwhile, USD 1 billion in sovereign bonds is falling due on July 25 this year, Dr. M. Z. M. Aazim, the Superintendent & Registrar of Central Bank’s Public Debt Department said joining Ada Derana ‘Aluth Parlimenthuwa’ last week.

As Sri Lanka was making arrangements to repay the first tranche of its maturing debt, the global rating agency Standard & Poor’s (S&P) last week lowered the long-term sovereign credit rating on the country from ‘CCC+’ to ‘CCC’ citing greater sovereign default risk.

The Sri Lankan government slammed the move, saying it is perturbed by the announcement by S&P Global Ratings, at a time when it has diligently lined up adequate funds to repay its maturing foreign debt liabilities and its repeated assurances over the strong commitment to oblige its debt service payments.Sri Lanka has a total of USD 6.9 billion in debt to be repaid in 2022.

There seems to be an increasing consensus among experts in the field and observers on the ground that IMF assistance is unavoidable in the present circumstances, several economic experts said. 

 To overcome financial difficulties, the main advantage of IMF help is the cheapness of its credit and flexibility in terms of settlement. Currently, the interest rate on loans is only 3.5%, which is the lowest available in the market. 

The settlement of debt is over medium to long term and could take as long as ten years and that also in six-month instalments. 

Compared to the currency swap arrangements with India, China and Bangladesh these are unbelievably attractive terms. 

Incidentally, there seems to be utter secrecy surrounding the terms and conditions attached to the latest 1.5 billion yuan-rupee swap with the Bank of China. It may cost more than what has been publicly told

The conditionality attached to IMF loan depends on the state of the economy in question. The more serious is a patient’s illness more severe will the restrictions imposed by the doctor. Likewise, had the ruling regime approached IMF quite early in time its conditions and their impact on public would have been milder.

In general, IMF conditions are tied to two areas namely, improving internal fiscal strength by way of increasing taxes and reducing wasteful public expenditure, and carrying out economic reforms.

Economic reforms demanded by IMF would mean restructuring if not privatizing all loss-making parastatals. 

The main reason why several state run corporations fail is because of corruption. This again is a perennial problem in Sri Lanka. When managers of state run corporations are appointed more on the basis of political affiliation than merit, corruption sets in. 

When the top is corrupt how does one expect the ones in the middle and bottom levels to remain honest.

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