The Cabinet has approved the proposal tabled by President Ranil Wickremesinghe in his capacity as the Finance Minister for the establishment of a Unit to restructure public enterprises.
Accordingly, the new restructuring unit will be established under the Ministry of Finance, Economic Stabilisation and National Policy.
The objectives of establishing a unit for public enterprise restructuring are to;
Identify ways to reduce the financial burden assigned to the Treasury from public enterprises whose performance is not satisfactory;
Provide necessary guidance and support in the reformation of public enterprises with the aim of improving the overall performance of state-owned enterprises.
Transshipment container volumes at the Port of Colombo fell for the second consecutive month in July by a record 7.5 percent year-on-year (YoY) to 460,736 TEUs as main shipping lines temporarily opted for alternative routes at the height of the country’s political and social unrest.
Although, the operations at Port of Colombo remained largely intact despite the mass protests and political crisis, a local shipping agent pointed out that July 9th further escalated concerns on law and order in Sri Lanka among the main shipping lines.
Industry stakeholders fear it might take several months to regain confidence of main shipping lines.
In the seven-month period, transshipment container volumes declined by 0.2 percent YoY to 3.35 million TEUs.
Overall, container throughput at the Port of Colombo declined by 10.5 percent YoY to 553,890 TEUs in July.
In particular, import (laden) container volumes declined by a steep 21.4 percent YoY to 30,366 TEUs while export (laden) container volumes dipped by 6.8 percent YoY to 25,247 TEUs.
The SLPA-managed Jaya Container Terminal (JCT) and its partially operational East Container Terminal (ECT) handled only 115,539 TEUs in July, recording a sharp YoY decline of 39 percent, due to the notable decline in transshipment container volumes from India.
However, the port’s only fully operational deep container terminal, Colombo International Container Terminal (CICT) managed to handle 286,419 TEUs in the month, up by 1.2 percent YoY.
Similarly, the container volumes handled by South Asia Gateway Terminal (SAGT) also rose by 3.5 percent YoY to 151,932 TEUs in the month.
Overall, the container throughput of Port of Colombo declined by 2.1 percent YoY to 4.11 million TEUs in the seven-month period. Meanwhile, cargo handled by Hambatota Port also declined by 48.6 percent YoY to 147,495 TEUs in July.
The Management of Sri Lanka Ports Authority (SLPA), the terminals Colombo International Container Terminals Ltd (CICT), South Asia Gateway Terminals (Pvt) Ltd (SAGT) together with CASA (Ceylon Association of Shipping Agents) assure global Shipping Lines and Operators of Container and Conventional services of operations being carried out uninterrupted and at normal and expected levels in the Port of Colombo despite the economic and political crisis situation in the Country.
Continued and unhindered operations at the Port are also receiving attention at the highest level of the Government of Sri Lanka consequent to the appointment of a new Prime Minister last week.
The Port of Colombo (POC), being identified as an essential service, catering to vital transshipment, exports, imports and related logistics services which are the backbone of the economy of Sri Lanka, has received and is assured of an uninterrupted supply of electricity and fuel to maintain the demand required.
Shipping services are essential service exports and contribute immensely to the Sri Lankan economy and hence the shipping community stresses the importance of Colombo as a regional transshipment hub.
Inter-terminal trucking between terminals and transport for logistics services to move domestic laden and empty containers are receiving priority and connections for transshipment containers are able to make their targets on carriers without misses. Clearance of imports and export shipments are moving at desired levels notwithstanding delays in the clearance of some import cargoes due to a shortage of foreign currency.
The Port trade unions acknowledge the vital importance of the sector for economic sustenance and revival of the Country and the Management of SLPA and the private terminals, CICT and SAGT are confident that they would be in a position to meet the economic challenges and ensure service delivery to customers.
Sri Lanka is contending with a high risk of default on its local currency bonds as it seeks to reduce debt, key to winning financing from the International Monetary Fund to bring relief to the crisis-hit island.
Fitch Ratings’s ‘CCC’ rating on long-term local currency debt that was affirmed in May “reflects a high risk that local-currency debt will be included in debt restructuring,” Sagarika Chandra, Hong Kong-based associate director, wrote in a statement. Sri Lanka had $30 billion of foreign debt and $34 billion of domestic debt as of the end of April.
Sri Lanka defaulted on its dollar debt in May for the first time, and must clinch a restructuring deal with private bondholders and official creditors including China, Japan, and India to get the IMF board’s nod for a $2.9 billion loan. The nation faces a lawsuit in a US court over its proposed debt recast, with one of the bondholders, Hamilton Reserve Bank Ltd., accusing Sri Lanka of setting terms that favor domestic banks.
“There is a big question mark over whether sustainable levels of debt can be reached by just restructuring US dollar market and concessional debt,” said Kenneth Akintewe, head of Asian sovereign debt at abrdn in Singapore. “Arguably, local currency debt needs to be restructured too in order to reach what the IMF would see as sustainable levels.”
There are mixed signals from the government. President Ranil Wickremesinghe in August said the government was looking at including local bonds in the debt restructuring. Meanwhile, central Bank Governor Nandalal Weerasinghe has said he was confident the nation’s debt can be made sustainable without restructuring domestic debt.
Sri Lanka is walking a tightrope as it juggles the need to meet the IMF demands while ensuring the impact of the debt restructuring on the economy is manageable. Fitch warned that “a default on local-currency debt could have adverse effects on Sri Lanka’s banking sector that would erode the net benefits of such a restructuring.”
Officials are working with financial and legal advisers on a debt restructuring strategy and intend to make a presentation to the creditors in the next few weeks, the finance ministry said last week.
Imposing a debt restructuring on local currency debt could also prove challenging as the rating company views public support for the government as “weak,” and anticipates risks to reforms from political instability. An interim budget last week raised tax rates and included reforms to restore the nation’s fiscal health and meet IMF requirements.
“If there is a haircut on these bonds also, there will be a huge impact on the banking sector,” said Sanath Manatunge, chief executive officer at Commercial Bank of Ceylon PLC, adding that it would also make the restructured sovereign dollar bonds vulnerable.
Leader of the Opposition Sajith Premadasa speaking in Parliament today (06) urged the President to immediately table the staff-level agreement the government of Sri Lanka reached with the International Monetary Fund (IMF).
Reminding that Mr. Ranil Wickremesinghe, during his capacity as an opposition MP, himself has declared twice that Parliament has the monetary power over such agreements, the Opposition Leader noted that the IMF agreement, therefore, should be tabled in Parliament making his advice a precedent.
The loss incurred to the government via the Gongala Radar Project belonging to the Meteorology Department should be recovered from the officers held accountable, declared the Auditor General, after reviewing a 12 year-old meteorological initiative launched at a cost of Rs. 402,800,000 only to meet total failure.
The project which is in its total collapse has currently been handed over to army officials for their temporary use.
Equipment worth Rs. 9,100,000 brought in for the project have been misplaced and their value has been cited as Rs. 4,900,000 slashing millions from the original value, the Auditor General’s report revealed, adding that the parties responsible for these actions have not yet been identified.
Accordingly, the Auditor General has recommended that the officials who should be held accountable for this failed project as well as for the missing equipment and the huge money spent must be identified and the loss incurred be recovered from them.
The TRCSL-approved price increase for all mobile, fixed, pay-TV will come into effect from today, a move operators said was long due whilst customers termed it as ‘unfair’ amidst the ongoing economic crisis.
The telecommunications providers jointly announced that the regulator the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) has approved an upward tariff revision for all Mobile, Fixed, and Pay-TV service providers.
Thereby, mobile, fixed, broadband, and other services tariffs have been increased by 20%, while all Pay-TV tariffs have been increased by 25%. In addition, there will be an overall 15% VAT added to the bill, it added.
“There was no public consultation before the price hike hence it is very unfair, several customers said, claiming that telco service providers are earning massive turnovers, TRCSL as the regulator should consider the economic situation and the present plight of consumers before giving approval for tariff hike.
Fitch Ratings expect the mean 2022 FFO net leverage for SLT and mobile leader Dialog Axiata PLC (AAA(lka)/Stable) to remain stable at about 0.9x (2021F: 1.0x).
Dialog and SLT should consolidate revenue market share further at the expense of smaller telcos, while focusing on profitable growth.
Industry revenue should rise by 8%-9% in 2022 (2021F: 12%-13%), amid strong growth in data, fixed broadband and digital TV.
Average 2022 capex/revenue should increase to about 26% (2021F: 24%) as the telcos expand 4G coverage and fibre connectivity.
The rationale for the tariff increases across the board is due to the escalation of operational costs resulting from the devaluation of the rupee, and the recent 15% VAT hike announced by the Government during its interim Budget.
The industry had been requesting for a hike since 2020 but TRC had deferred it.Sri Lanka’s mobile penetration has seen a phenomenal increase during the past 20 years. Mobile telephone subscriptions which stood at 430,202 in the year 2000 rose to 28.73 million in 2020.
Following the COVID-19 pandemic, the country has seen an exponential increase with the number now standing at over 29.95 million.
In 2021, total fixed access services (wirelines and wireless local loop telephones) was at 2.85 million and the internet connections (including mobile internet connections) was at 22.23 million.
Despite the claims of operators on rising operational costs, the customers complained that during the power cuts there is hardly any connection for data subscriptions.
“The fault of economic mismanagement by those responsible is now being forced upon the telco customers.
As citizens of the country, we have to bear all the absurd and unfair burden of rupee devaluation and ad-hoc tax policies implied by the authorities,” they alleged.
The distressed customers also said additional data connections they bought because the WiFi connections were out of service during the power cuts, but even those data connections do not work during scheduled power outages as towers in areas lose connectivity too.
“We have made several complaints to the operators. To these, the only response we have gotten so far is that they do not have the infrastructure or the technology to provide services during the power cuts.
However, by the end of the month, we have to pay for the monthly subscription payment, irrespective of the usage of the connections,” they charged.
The customers also pointed out that if the TRCSL was in agreement with the operators for the tariff hike, without even addressing the issues of slow data speed, lack of capacity, infrastructure, and technology issues only thinking about the benefits to the telco companies, whilst completely disregarding the customers.
“As a regulator, the TRCSL should look into the aspects of both the service provider and the customer. In this case, we see that the TRCSL has taken a biased decision from the operator’s perspective.
During fuel shortages and COVID pandemic, online school activities and work from home (WFH) was the only option.
“With this tariff hike we do not have the financial capacity to manage the household expenses, as the salaries have not increased as against the soaring cost of living, ” they said.
As customers of both urban and rural communities, we could have been at least satisfied if there was seamless connectivity to all customers than resorting to bias and ad-hoc tariff hikes,” they claimed.
A committee has been appointed to review the project offices and project management units established to implement or facilitate various projects and programmes of the government in accordance with Resolution No. 10.5 of the interim Budget Appropriation Bill for 2022 passed in Parliament recently, based on President Ranil Wickremesinghe’s instructions.
Accordingly, the committee chaired by K.T. Kamal Padmasiri comprises of N.K.G.K. Nemmawatta and R.H. Ruvinis as members.
Below is the statement released by the President’s Media Division in this regard:
Certain provisions of the draft 22nd Amendment to the Constitution do not comply with the Constitution of Sri Lanka, the Supreme Court announced.
Accordingly, these provisions ought to be passed via a two-thirds majority in Parliament and a referendum as instructed by the Supreme Court, Speaker Mahinda Yapa Abeywardena told Parliament today (06).
In a move to adopt new technology as preferred by the modern youth and to avoid the inconvenience and burden of carrying physical money, all customers of the Department of Motor Traffic (DMT) will be facilitated to make their payments via electronic cards including credit cards, said Commissioner of Motor Transport (Development) D. Kusalani, attending the briefing held on the new e-payment facilities introduced to the RMV at the Department of Government Information Auditorium yesterday (05).
By doing so, the DMT customers will be able to make their payments even if they do not possess cash at hand, she pointed out.
The DMT as a major public institution that emits revenue for the Treasury produces about Rs. 01 billion monthly and due to the Covid-19 pandemic and the drop in vehicle imports, the income has declined recently, but now is recovering.
The briefing was attended by Commissioner of Motor Traffic (Control) Susantha Jayathilake, Accountant Aravinda Samarakoon and other officials.
