Public sector officials have been advised to strictly adhere to a Treasury circular on limiting government expenses, and warned that those failing to follow the directive would be personally held liable.
On the instructions of President Ranil Wickremesinghe, the directive has gone out from Presidential Secretary Saman Ekanayake to ministry secretaries, department heads, provincial chief secretaries, heads of corporations, statutory boards and state-owned enterprises.
They have been told to curtail state expenses due to the current economic challenges the government faces.
It has been revealed that the directive comes in the wake of two provincial administrations planning to recruit 600 persons for new jobs, despite the directive to stop recruitment.
The circular on specific guidelines has been issued by Treasury Secretary K.M. Mahinda Siriwardana. The circular said the guidelines were issued in view of the “serious issues in the government fiscal operations and insufficient foreign exchange to finance essential imports and meet foreign debt service obligations.”
Accordingly, strictly control has been placed on the usage of utility services including fuel, electricity, water and communication facilities.
Entering into new rent or lease agreements with regard to new buildings is suspended until further notice while existing agreements can be extended based on a proper need assessment and a cost-benefit analysis with the approval of the board of directors of the respective institutions.
Prior approval from the General Treasury is a must before extending a lease or replacing existing agreements for vehicles while entering into fresh agreements to lease vehicles is suspended, the circular added.
The circular stressed that recruitment should be suspended immediately, and if there is recruitment necessary to maintain business continuity, it must have the approval of the Director General of the Department of Public Enterprises or the Director General of the Department of National Budget, but there should be no new allowances paid to employees, and the board should ensure that existing allowance schemes are not increased either.
All institutions are instructed to shift to electronic communication platforms and reduce paper usage as much as possible.
In addition, state-owned enterprises (SOEs) are directed to avoid expenditure-related ceremonials and to suspend all sponsorships, donations, Corporate Social Responsibility (CSR) expenses, and non-business-related promotional expenditures. Any such expenditure which is essential in nature can only be met with the approval of the relevant minister and concurrence of the Minister of Finance, the circular said.
Although foreign-funded training programmes are not restricted, domestic funds could not be used for foreign travel or training programmes, the circular said.
The government also encouraged SOEs to use underutilised or unused lands for agricultural purposes with in-house labour and inputs to ensure sustainable food security in the country by coming up with innovative approaches to producing value-added products focusing on alternative arrangements to imports.
A high-level Management Committee consisting of a Chief Executive Officer, Head of Finance, Head of Operations and Head of Human Resources is to be established in every institution to introduce effective controls over expenditure and monitoring purposes.
The committee is to report its recommendations to the board of directors at the end of each month and key initiatives accepted by the board based on those recommendations should be communicated to the secretary to the line ministry and the General Treasury on or before the tenth of the succeeding month through emails.
Govt. issues stringent guidelines to curtail public-sector expenditure
Taisei seeks halt to BIA expansion contract
Japanese engineering group Taisei will enter negotiations on a possible stoppage of an airport expansion in Sri Lanka after funding for the project was cut off, another sign of the country’s deepening economic crisis.
Taisei in 2020 won a 62 billion yen ($ 464 million at current rates) contract to build a new multilevel terminal and viaduct at Bandaranaike International Airport near Colombo, Sri Lanka’s largest city. It had expected to complete construction around 2023.
But the Japan International Cooperation Agency recently suspended over 70 billion yen of lending to Airport and Aviation Services (Sri Lanka), the State airport operator, which would have paid for the project.
Taisei will start talks with Airport and Aviation Services to suspend the project, and could request a release from its contract as early as the fall if the funding situation and other factors do not improve.
Sri Lanka’s tourism industry was ravaged by the coronavirus pandemic, which in turn squeezed its foreign-exchange reserves. Combined with years of current-account deficits, the Sri Lankan Finance Ministry in April announced that it would stop foreign debt repayments until it can chart a path out of the crisis.
A Sri Lankan Cabinet Member had recently announced a halt in multiple JICA-funded projects, local media reported.
Former President Gotabaya Rajapaksa, whose family has been a dominant political dynasty in Sri Lanka for decades, fled the country in July amid protests over inflation and other economic difficulties. New President Ranil Wickremesinghe aims to restart bailout talks with the International Monetary Fund and seek aid from other international partners.
The Sri Lankan airport project is believed to account for tens of billions of yen of Taisei’s 221.5 billion yen nonconsolidated overseas balance carried forward, a measure of the scale of outstanding projects, as of the end of March.
“We decline to comment on the progress of individual projects,” a Taisei spokesperson told Nikkei.
A JICA spokesperson said the agency “cannot provide information regarding our borrowers”.
There were 180 Japanese companies operating in Sri Lanka as of July, according to research company Teikoku Databank. Although the impact from Sri Lanka’s crisis has been limited so far “protracted uncertainties in the business environment caused by political instability could affect companies’ strategies,” Teikoku said in a report.
Public Administration and Home Affairs Ministry issues announcement on non-essential public servants
The circular issued limiting the summoning of non-essential public servants to their offices is valid till August 24, the Ministry of Public Administration and Home Affairs said.
The circular was issued in response to the fuel crisis, effective from July 24.
However, the institutional heads have been instructed to call the necessary officials in to the offices to run the operations at the public institutions without interruption given that the shortage of fuel has largely been solved, the Ministry noted.
MIAP
Namal lodges complaint demanding probe into news item on Mawbima
Former Sports Minister Namal Rajapaksa has lodged a complaint with the Police demanding an investigation into a news item published on Mawbima Newspaper.
The news item was regarding Commonwealth Games winner Nethmi Ahimsa being brought to visit the former Minister.
It is noteworthy that the owner of Mawbima is the current Public Security Minister Tiran Alles, who is a family friend of the Rajapaksas and a National List MP of the Sri Lanka Podujana Peramuna (SLPP).
MIAP
Revision on electricity tariffs problematic: CEB
The revision on electricity tariffs declared by the Public Utilities Commission of Sri Lanka (PUCSL) is problematic, said the Ceylon Electricity Board (CEB).
Despite the electricity tariffs being surged by 75 per cent the Board continues to incur a loss of about Rs. 45 billion, revealed Deputy General Manager of Corporate Strategy and Regulatory Affairs of the CEB Nihal Weeraratne.
He added that the CEB alone has the right to make decisions regarding the annual benefits and allowances of its employees and not the PUCSL.
The Deputy General Manager recently said in a television programme that the PUCSL will be informed about the issues in the new tariffs system in writing.
MIAP
Former President Rajapaksa to return to SL on Aug 20
Former President Gotabaya Rajapaksa who according to foreign reports is currently in Bangkok, Thailand is expected to return to Sri Lanka on August 20, political sources disclosed.
The ousted Sri Lankan head of state is expected to return to the island on a private jet, following concerns on his safety due to which security officials were deployed outside the hotel he was residing.
Meanwhile, the question of who paid off the private jets utilised by the former President is currently among the hot topics on the political arena, and even a group of lawyers are preparing to question the government in this regard, sources added.
Govt lifts ban on a number of international Tamil organisations and individuals
The government has lifted a ban imposed on a number of Tamil organisations and individuals, the Defence Ministry said in a statement.
The ban, based on terrorist or other allegations levelled on six Tamil organisations and 309 individuals, accordingly will be lifted.
MIAP
Chinese spy ship to dock at Hambantota amidst Indian US concerns
Even as China’s spy ship ‘Yuan Wang 5’ is back on course towards the Hambantota Port of Sri Lanka, India is set to gift the island nation a Dornier 228 maritime patrol aircraft soon, subtly reasserting its role as the net security provider to the Indian Ocean region.
New Delhi had over the past couple of weeks repeatedly conveyed its its concerns over the arrival of the ship in the Indian Ocean nation,
The Ministry of Foreign Affairs had on August 5 written to the Embassy of the People’s Republic of China in Colombo, requesting for postponement of the visit of the ship until further consultations between the two sides.
Later it has asked India to inform them in writing about the threat that will be caused to India by the entry of the Chinese ship into SriLanka.
Indian Authorities are still to respond to this request,official sources said, adding that the Sri Lanka President has not opposed the move to allow entry of the ship.
President Ranil Wickremasinghe has requested the US Ambassador Julie Chung at a meeting with President Ranil Wickremesinghe to provide firm reasons for opposing the ship’s arrival in writing when she expressed her concerns on the matter.
The same message was conveyed to Indian diplomats by Foreign Minister Ali Sabry on Tuesday. But they were keeping mom without responding to the request. , a top foreign ministry official said.
.The ship is one of the four currently used by the Strategic Support Force of the Chinese People’s Liberation Army (PLA) to track satellites and intercontinental ballistic missiles.
The ‘Yuan Wang 5’ is now likely to dock at Hambantota Port on August 16 – five days after it was originally scheduled to arrive at the port Sri Lanka leased out to China Merchant Ports, a state-owned company of the communist country, in 2016.
“Security and cooperation in the neighbourhood are of utmost priority,” the Ministry of Foreign Affairs of the Sri Lankan government said in a statement in Colombo on Saturday, after giving its nod for the arrival of the ship in Hambantota Port.
Sri Lanka’s Ministry of Foreign Affairs has allowed the Harbour Master to grant permission to the Chinese ballistic missile- and satellite-tracking vessel Yuan Wang 5 to dock at the Hambantota Port from August 16 – 12.
It is reported that Colombo initially granted permission for the vessel to dock at Hambantota on July 12, a day before former President Gotabaya Rajapaksa fled the country giving in to months-long protests.
The much-disputed 730-foot-long ship was initially scheduled to dock at the Hambantota Port between August 11 and 17, however, Sri Lanka made a request from Beijing to defer the arrival.
The request for deferment came after India voiced strong concerns on the matter and said it carefully monitors any developments having a bearing on its security and economic interests, and takes all necessary to safeguard them.
China, in response to India’s concerns, said it hoped “relevant parties” would refrain from interfering with its legitimate maritime activities and stressed that it was “senseless to pressure” Colombo by citing the issue of security concerns.
As diplomatic tensions were growing, Sri Lanka clarified that permission and clearance were given to the Chinese vessel for “replenishment”. The vessel will conduct satellite control and research tracking in the north-western part of the Indian Ocean region through August and September, the Sri Lankan government said further.
Meanwhile, India on Friday (Aug 12) categorically rejected insinuation by China which claimed that Sri Lanka’s neighbour is pressuring the island nation over Chinese ballistic missile and satellite-tracking vessel’s planned visit to Hambantota.
Amidst the row over the Chinese vessel, Sri Lanka allowed a Pakistani warship PNS Taimur to make a port call in Colombo on Friday. According to Sri Lanka Navy, this Pakistani-guided missile frigate built by Hudong-Zhonghua shipyard in Shanghai, is in Colombo for a formal visit.
Global apparel industry steps in to support Sri Lanka’s apparel sector
The global apparel industry issued a call to action regarding Sri Lanka’s economic crisis this week, urging the stakeholders across the world to step up efforts in ensuring the island nation’s high-performing sector does not lose momentum.
In a move to ensure their competitor from the South Asian region does not fall behind, due to the prolonged crisis in the country, the apparel industry organisations are mobilising worldwide.
As reported by Just-Style, a global apparel sourcing and industry news platform, the organisations are coming together to express their support for Sri Lanka’s garment industry and its workers, during the country’s ongoing economic crisis.
The American Apparel and Footwear Association (AAFA) sent a letter on behalf of the buyers to its counterpart association in Sri Lanka, the Joint Apparel Association Forum (JAAF), to reiterate the US apparel and footwear industry’s strong support for the Sri Lankan garment industry during what it calls this time of crisis and transition.
In the letter, AAFA President and CEO Steve Lamar said the organisation applauds the JAAF and its members for its “relentless efforts” to keep workers employed, safe and healthy amid an unprecedented economic crisis.
Similar action was also taken by the Ethical Trading Initiative (ETI), Fair Wear Foundation, Fair Labour Association and British Retail Consortium.
Just-Style reported that the agencies have signed a joint call to action, encouraging companies sourcing from Sri Lanka to take specific steps to support workers, suppliers and the sector at large, during this difficult period.
Sri Lanka plays an important role in supplying global apparel brands and retailers. It is crucial businesses support the country’s apparel industry during this difficult time, to keep workers and their families afloat and the Sri Lankan economy in motion, amid the current crisis,” said Ethical Trading Initiative Executive Director Peter McAllister, as reported by Just-Style.
In the call for support, the associations and agencies have stressed that they want to encourage the companies sourcing from Sri Lanka to take a series of actions.
The actions are to ensure there is a clear understanding of the risk to workers in the current situation; maintain regular communications with the suppliers to understand their current situation and ensure timely payment of orders; avoid cancellation of orders and assure suppliers of business continuity for the time being
It has to ensure all pending wages and severance payments are paid to all employees and workers; review negotiated prices and ensure future price negotiations include the increase in costs for energy, other raw materials and labour exposed to inflation
.It is essential to engage with unions and suppliers to explore innovative remedial solutions to support workers and work collaboratively to consider other actions to improve respect for human rights in the context of Sri Lanka’s economic crisis.
CPC to take stern action on filling stations disregarding guidelines
The Ceylon Petroleum Corporation has been given directives to take appropriate management decisions and distribution decisions on the filling stations that fail to adhere to the guidelines, Minister of Power & Energy Kanchana Wijesekera says.
The instructions were given at a progress review meeting held this morning (Aug 13) at the Ceylon Petroleum Storage Terminals Limited (CPSTL) in Kolonnawa to look into the ongoing process of fuel distribution.
According to the lawmaker, the data of the past two weeks were analyzed while the quantity of fuel distributed to each filling station and the quantity of fuel dispensed through the QR code system were also taken up for discussion.
Fuel distribution to essential services, public transport vehicles, fisheries harbours, agricultural requirements, industries, and tourism was also reviewed at this meeting.
MPs Indika Anurudda, Suren Raghavan and Madhura Vithanage, who are assisting with the fuel distribution process, also attended the meeting.
A crude oil cargo of 100,000 metric tons is scheduled to arrive in Sri Lanka later tonight (Aug 13) and will undergo quality sampling tomorrow, Minister of Power & Energy Kanchana Wijesekera says.
Meanwhile, another crude oil cargo of 120,000 metric tons is expected to reach Colombo between August 23 and 29, he said further in a tweet.Both cargos are Russia’s Urals crude oil, the lawmaker added
Sri Lankan government on Friday (Aug 12) has gazetted the Petroleum Products (Special Provisions) Amendment Bill.
The said Bill, published under the directives of Power & Energy Minister Kanchana Wijesekera, allows selected specific sectors of the economy to individually import necessary fuel quantities.
Accordingly, the government will issue licences to identified parties for importing petroleum products.
On April 25, the approval of the Cabinet of Ministers was received for the proposal tabled by Minister Wijesekera in this regard.
As fuel is essential for all economic activities in the country, it is appropriate to issue licenses to selected specific sectors of the economy to import and use the fuel they require individually, the government has said.
Subsequently, the legal draftsman was advised to draft a Bill to amend the Petroleum Products (Special Provisions) Act, No. 33 of 2002, in order to make provisions to issue licence to properly identified parties.