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Detention of an Airbus aircraft belonging to Russian Aeroflot Airlines…

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The problem caused by the detention of an Airbus aircraft belonging to Russian Aeroflot Airlines from leaving Sri Lanka has been resolved to some extent.

Following a complaint by Celestial Aviation Trading Ltd. based in Ireland, the Colombo Commercial High Court issued an injunction restraining the aircraft from leaving the country on June 2 and suspending it on June 6 following a series of heated incidents.

There are a lot of confusing points in this whole case.

However, the source of this problem is a legal action taken on behalf of a client by a well-known law firm in Sri Lanka. This eventually led to a diplomatic rift between Sri Lanka and Russia.

The fiscal officer of the Colombo Commercial High Court had gone to the Bandaranaike International Airport in Katunayake with an order to prevent the flight from leaving the country. The flight attendant at the Katunayake Bandaranaike International Airport is a person who has dual citizenship. When the order was brought to him he had said that he was waiting for it.

By June 3, the issue of the aircraft began to flare up at the diplomatic and political level, with the Colombo Commercial High Court Judge stating that he had not issued an enjoining order. However, on the day before yesterday (06) the judge issued another order suspending the enjoining order which is said to be not issued by him.

In the end, however, the burden is falling on the shoulders of two lawyers from a well-known law firm and the fiscal of the Colombo Commercial High Court. The work of the fiscal was also suspended yesterday (07) afternoon. It was reported that the Attorney General was preparing to file a case against the two lawyers and Fiscal Officer.

Nandalal Weerasinghe denies reports that there is a conflict between him and the PM

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The Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe has vehemently denied media and social media reports that there is a conflict between him and the Prime Minister.

Accordingly, he has stated that he has a cordial relationship with the Prime Minister Ranil Wickremesinghe and that he will always work together to revive the country’s economy.

The Central Bank of Sri Lanka has stated this on its official Twitter account.

An announcement from the Litro Gas…

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Litro Gas says it will not be distributing domestic gas cylinders today (08).

Accordingly, the company is requesting the public not to wait in queues as the gas distribution will resume in a few days.

Colombo Port City investors to get 40-year tax concessions

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Crisis-hit Sri Lanka has decided to give special 40-year tax relief for Chinese-built Colombo Port city to attract potential investors as the island nation’s largest foreign direct investment failed to attract investments after the much-touted project opened for nearly one year, a senior minister said on Tuesday.

Also with the Sri Lankan government desperately trying to secure long-term IMF funding to recover from the complete bankruptcy, the future of the much-touted Chinese funded Colombo Port City project to build an artificial 665-acre island to set up an international financial hub also hangs in balance.

The USD 1.4-billion Colombo Port City project, expected to play a key role in China’s ambitious “Maritime Silk Road” project in India’s backyard, is said to be the single-largest private sector development in Sri Lanka.

Investors at the Colombo Port City will get 40-year tax concessions, Minister Bandula Gunawardana saidon Tuesday .

The Cabinet Spokesman said that the Cabinet had decided to offer the concessions to draw more investments to the Port City.He noted  that in a competitive world other countries are offering attractive concessions to draw investors.

The Minister said that drawing investments has become difficult owing to the current global crisis. Gunawardana disclosed  that Sri Lanka needs to offer more attractive packages for investors.

As a result, the Cabinet approved a proposal to offer 40-year tax concessions for investments at the Colombo Port City. Gunawardana said that if such concessions draw more foreign investors it will help address the dollar crisis in Sri Lanka.

Sri Lanka is struggling to cope with a debilitating economic crisis with inflation soaring, food and fuel shortages, and fears of a sovereign default looming on the horizon.

The belief is that the project will transform Sri Lanka’s tourism-and-tea economy into a thriving, multi-services one. And it is an expensive dream, especially so for a country in the grip of unprecedented economic turmoil.

The project is estimated to cost $ 14 billion, largely funded by potential investors who will buy into the idea of the financial hub and set up shop there. For starters though, China has invested $ 1.4 billion to help PCC reclaim 269 hectares (ha) of land on the Indian Ocean. In exchange, China has got about 116 ha of the land there on a 99-year lease.

PCC is a public-private partnership project between the Sri Lankan Government and China Harbour Engineering Company (CHEC) Port City Colombo (Pvt.) Ltd, which is a subsidiary of China’s state-run infrastructure firm, China Communications Construction Company (CCCC), a company that is leading President Xi Jinping’s Belt and Road Initiative (BRI).

The move comes even as the economic crisis has pushed well-heeled Sri Lankans to take to some of the upmarket streets to protest against the Rajapaksa brothers — President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa — nearly daily.

That still doesn’t explain the extent of the Government’s belief in the project.Even as China’s shadow looms large over the project, the Sri Lankan Government is keen to see northern neighbour India investing in the city in a substantial way.

 This is despite awareness within the Rajapaksa Government of the current border tensions between India and China.

On its part, India is apprehensive of the project. New Delhi believes the city is part of President Xi’s BRI, and has thus chosen not to make any public statement on the project expressing its “discontent and displeasure”, a top-level source said. .

PCC is expected to be fully operational in the next 25 years, though Phase 1 of the mega project will be completed by 2027, according to the Sri Lankan authorities.

UN appeals for Sri Lanka humanitarian assistance to avert hunger                         

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The United Nations (UN) is to launch a worldwide public appeal for Sri Lanka humanitarian assistance on the 9th of June considering the country’s food insecurity and imeding starvation of the people.

The country’s political turmoil and economic crisis have brought about a catastrophic food shortage triggered due to unscientific ill adviced arrogant decisions  in cluding the ban on chemical fertilizer  to , with the nation’s 21 million residents now forced to pay triple for basics like rice, sugar, lentils and milk powder.

Over 500000 citisens , meanwhile, were pushed into poverty in the country over the past two years.

Under these circumsatnaces shedding some light to the issue  ,Prime Minister Ranil Wickremesinghe said that the UN will seek support to provide humanitarian assistance to Sri Lanka.

Through this project, they plan to provide $48 million over a four-month period to the food, agriculture and health sectors, the Prime Minister said.

He also said that discussions were held with representatives of international organizations such as the United Nations, the United Nations Food and Agriculture Organization, the World Food Program, the United Nations Development Program and the World Health Organization.

The Prime Minister said that many representatives of these countries and international organizations have agreed to support Sri Lanka during this difficult time.

He also called on the International Monetary Fund (IMF) to hold a conference to help unite Sri Lanka’s lending partners.

The Prime Minister said that holding such a conference under the leadership of India, China and Japan will be a great strength to Sri Lanka. 

A report by the Food and Agriculture Organization of the United Nations & the World Food Program has revealed that Sri Lanka will experience a further deterioration of food security over the next few months.

“The domestic agricultural production and rising international prices, compounded by the ongoing economic crisis, are expected to increase acute food shortages and price inflation which in turn are likely to result in a further deterioration of food security over the next months,” it added.

The FAO & WFP said that the country’s current account deficit has widened while its foreign exchange reserves have dwindled, resulting in a dramatic currency devaluation, rising food prices and food shortages.

The report in addition noted that the current economic crisis is increasingly affecting unemployment, and household incomes, complicating access to essential items.

Rising costs of food, fuel and imported commodities combined with supply chain disruptions and a weakening exchange rate are expected to drive inflation higher in 2022, while stressing that availability of food in the outlook period is likely to decrease.

The report went on to note that the harvest of the country’s main staple, “Maha” paddy crop, is estimated at a below-average level, mainly due to a ban on the import of chemical fertilizers and pesticides imposed by the authorities between April and November 2021.

Therefore, Sri Lanka will increasingly rely on imports to cover domestic needs, but the ability to purchase imported supplies will be constrained by a further depreciation of the local currency.

Reduced income and increased food prices affect households’ ability to afford sufficient and adequate food, said the report.

The Food and Agriculture Organization of the United Nations & the World Food Program has recommended that Sri Lanka seek multilateral and bilateral aid to import and provide chemical fertilizers along with organic fertilizers for the summer growing season and agricultural inputs such as vegetable seeds to vulnerable smallholder farmers.

It also recommended to supply high-nutrient animal feed and veterinary health kits to livestock owners including those who have cattle and poultry to mitigate the impacts of the feed shortage from the economic crisis.

The FAO also recommended providing unconditional cash to also support farmers with green gram production as a mid-season short-cycle crop to support food production. 

If feasible, conduct cash-for-work activities to improve paddy storage and community infrastructure to support daily wage earners and labourers.

Prof. Ashu Marasinghe appointed as PM’s Parliament Affairs Secretary

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United National Party (UNP) former MP Prof. Ashu Marasinghe has been appointed as the Parliament Affairs Secretary of Prime Minister Ranil Wickremesinghe.

Marasinghe said he will be serving in this position without any payment or allowance.

Marasinghe was elected to Parliament in 2015 via the national list of the UNP and served as a Assistant Organiser of the then Ruling Party and the Chairman of the Sectoral Oversight Committee for Education and Human Rights Development.

MIAP

Chinese Ambassador pays a courtesy call on the Minister of Foreign Affairs

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The Minister of Foreign Affairs Prof. G.L. Peiris had discussions with the Ambassador of China in Sri Lanka Qi Zhenhong at the Ministry on 02 June, 2022.

During the meeting, Ambassador Zhenhong briefed on the assistance provided to Sri Lanka and discussed matters pertaining to bilateral engagements and current developments in the country. 

While appreciating the generous assistance and support extended by China particularly during the current situation, Foreign Minister requested continued support of the Government of China to mitigate the economic challenges in Sri Lanka. Both parties appreciated the multifaceted relations and the close friendship between the two countries. 

Senior officials of the Ministry of Foreign Affairs and officials of the Embassy of China were present during the meeting.

Ministry of Foreign Affairs

Colombo

05 June, 2022

Aeroflot Dispute: Commercial High Court Fiscal Officer suspended

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The Fiscal Officer of the Commercial High Court of Colombo has been suspended over the dispute raised by issuing a Court order to keep a Russian flight belonging to Aeroflot.

The said officer was suspended by the Ministry of Justice, Prisons and Constitutional Reforms.

LNW will make an exclusive coverage on the Aeroflot Dispute soon..

MIAP

How CBSL Chief took commercial bank heads on a roller coaster of lies

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Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka addressing a meeting held with the heads of the local commercial banks yesterday (06) said he held a discussion with 75 foreign ambassadors via zoom, in what it appeared to be a blatant lie given that there are no 75 foreign embassies and high commissions in Sri Lanka.

Amused by Weerasinghe’s lie, many of the commercial bank heads could not control their laughter, according to sources.

Despite having the bank heads invited to discuss future banking issues amidst the prevailing economic crisis in the country, none of the commercial bank chairmen were given the opportunity to speak, except the CBSL Chief himself and several officials under him. At one point, even one bank head was reported to have directly demanded Weerasinghe for ‘a chance to talk!’

Ignoring the request, the Governor of the CBSL continued to speak and urged the bank heads not to let shadow money transfers or commonly known as the ‘undiyal system’ or ‘hawala’ continue, bewildering the commercial chairmen in the event that this was not the responsibility of the commercial banks but the CBSL itself. At one point, one bank head made his argument on the matter as well, sources divulged.

Weerasinghe thereafter stated that the country’s inflation has now exceeded to 40 per cent and there is a shortfall of Rs. 07 billion in the market, briefing the country’s economic situation which the bank heads already had knowledge on.

One of the bank heads asked the CBSL Governor what the average dividend for banks would be at the end of 2022, when bank interest rates have exceeded 20 per cent and small and medium enterprises have completely collapsed. Not bothered to produce a response, Weerasinghe told him that these are but ‘general’ matters.

Counter proposing, the bank head pointed out that it was not possible to deny answers in the event that shareholders of the private banks are interested in this matter, despite any unwillingness of the state banks.

Governor Weerasinghe continued his speech and concluded the meeting by saying that the prevailing financial crisis would be ended in three months.

Leaving the room, the heads were talking to each other saying, “the Rajapaksas have always screwed things up because of such people. This man would probably do his ‘best’ to make sure it happens too,” sources further revealed.

Ali Sabry’s younger brother takes over as the new chairman of CPC

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Mohamed Uwais, a brother of former Finance Minister and Justice Minister Mohamed Ali Sabry, has taken over as the new Chairman of the Ceylon Petroleum Corporation.

He commenced his duties at the CEYPETCO head office this morning (07).