The Free Trade Zone Manufacturers Association (FTZMA) has expressed serious concern over the recent hike in power tariff as “unreasonable” and warned of severe repercussions to exports and the economy if the anomaly is not rectified.

The FTZMA is the sole trade chamber representing BOI investor companies in the zones and has expressed its objection to the tariff in writing to Power and Energy Minister Kanchana Wijesekera.

It said that the published electricity hike by the Public Utilities Commission of Sri Lanka (PUCSL) is “unreasonably beyond the requested raise” by the CEB and is a rising concern of the export manufacturing sector which uses more electricity.

“This is quite alarming, and we are dumbfounded by this unprecedented move by the PUCSL as some of the enterprises might be facing the danger of closure,” FTZMA Chairman Jatinder Biala and Secretary Dhammika Fernando informed Minister Wijesekera.

FTZMA has analysed the proposed price hike by CEB versus what has been published and that industry sectors in all categories are currently experiencing the largest hikes. “This incremental cost is going to add to their manufacturing cost which would result in making ‘Made in Sri Lanka’ products in export markets highly uncompetitive,” FTZMA warned.

“Moreover, the Small Medium Entrepreneurs (SMEs) in the category 1-1 being hit hardest by this price hike are extremely worried about the impact on their liquidity position and business survival,” it emphasised.

Minister Wijesekera was told that the attractiveness of Sri Lanka for foreign direct investment (FDI) is evaluated by using many criteria of which the cost of operation is a significant determinant because energy cost, electricity is directly associated with the cost of production of the investors.

FTZMA has urged the Minister to revisit and analyse the price structure once again, bearing in mind that FDIs are the future lifeline and the back-bone of Sri Lanka’s economy.

It also expressed hope that the Minister would realise the overall impact on investors who are seeking a reasonable revision in the price change. A meeting with the Minister has also been sought by the FTZMA to discuss the issue further and reach a win-win agreement.

Families with limited income have been struggling to cope up with the hike in commodity prices following the current economic crisis.

Many middle-class families have cut their menu of fish, egg, meat and vegetables to manage the expenses as the price of egg has gone up to rs 70 from Rs 50 and the price of a kilo of chicken meat risen to Rs.1700 from Rs1300 recently.

The All Ceylon Bakery Owners’ Association has urged President Ranil Wickremesinghe’s government to act fast to curb the rise in egg costs and import eggs from India at a discount.

According to N.K. Jayawardena, President of the Association, eggs are now sold in India for about 18 rupees, but it is very simple to import eggs from India and sell them for 20 rupees.

Under This set up , Sri Lanka plans to use 20 million US dollars from a billion US dollar credit line from India to import maize to make animal feed, Trade and Food Security Minister Nalin Fernando said.

“One of the biggest problems we had in recent months was the difficulty in getting raw materials for poultry farmers to make feed,” Trade and Food Security Minister Nalin Fernando said.“That is one reason the price of chicken and eggs went up so sharply.

“So Trade Ministry has allocated US$ 20 million US from the Indian credit line to import maize.”

Sri Lanka printed money for two years to suppress rates leading to a collapse of a soft-peg with the US dollar from 182 to 360 to the US dollar with the currency falling from 200 from March 2022.

Due to a failed float and continued money printing forex shortages continued.

Sri Lanka’s domestic maize production was also hit by a ban on chemical fertilizer. Though it was relaxed in late 2021, forex shortages from the broken peg made it difficult to import fertilizer.

Minister Fernando said imports of maize will be made until domestic production recovers.

Meanwhile the central bank had also raised rates to kill private credit and reduce forex outflows and inflation. The external sector as well as domestic money growth has sharply shown in May and June 2022.

Sri Lanka Air Force (SLAF) will induct the first-ever Dornier 228 Maritime Patrol Aircraft to its fleet on August 15 (Monday) under the comradeship of neighbouring India.

The induction will be done in a ceremonial procession under the patronage of President Ranil Wickremesinghe and High Commissioner of India Gopal Baglay with the authentication by Secretary to Defence Ministry, General Kamal Gunaratne (Retd.) and under the supervision of Ari Force Commander, Air Marshal Sudarshana Pathirana at SLAF Base in Katunayake.

During the Defence Dialog between India and Sri Lanka on January 09, 2018 in New Delhi, the Sri Lankan government had sought the possibility of obtaining 02 Dornier Reconnaissance Aircraft from India to enhance the maritime surveillance capabilities of Sri Lanka.

As a sequel to the request from Sri Lanka, India agreed to provide 01 Dornier 228 Maritime Patrol Aircraft from Indian Naval Fleet on gratis basis for first two years of the interim period since it would be required two years to manufacture new aircraft.

Afterwards, the Indian government expressed their assent to provide a brand-new Dornier 228 Maritime Patrol Aircraft free of charge.

Subsequently, another brand-new Dornier 228 will be inducted to Sri Lanka Air Force through mutually agreed terms and conditions between both countries.

The Indian Naval Dornier (INDO – 228) is a Short Take Off and Landing (STOL), multirole light transport aircraft with a turboprop twin-engine, produced since 1981.

Dornier GmbH of Germany being the Original Equipment Manufacturer has produced 245 aircraft during the period of 1981-1998. Subsequently, Hindustan Aeronautics Limited commenced the production of Dornier aircraft, under the license of Dornier GmbH since 1993.

Accordingly, the first-ever Dornier Maritime Patrol Aircraft to be inducted to Sri Lanka Air Force, will be flown and maintained only by a crew of 15 SLAF personnel who were specifically trained in India for a period of four months consist with pilots, observers, engineering officers and technicians along with the supervision by the Indian government’s technical team attached to SLAF comprising of engineering officers and technicians.

The team would undertake comprehensive supervision of aircraft, airframe, Aircraft Support Equipment, Ground Support Equipment, relevant documents and would ascertain the serviceability of all the assets.

The SLAF says it intends to effectively employ the Dornier aircraft specifically to conduct Maritime and Coastal Surveillance Operations within the Exclusive Economic Zone (EEZ), Search and Rescue Operations (SAR), Casualty Evacuation (CASEVAC) and Maritime Pollution Monitoring and Control within Sri Lankan Search and Rescue Region (SRR) to attain SLAF ultimate vision of “Ensuring the National Security through Effective Employment of Airpower” within Sri Lankan Airspace.

Innovate Lanka, a national initiative that brings all the start-up and SME ecosystem partners together, has announced its latest initiative to select, fund, mentor and accelerate budding start-ups and SMEs. 

The selected applicants or entrepreneurs will be called for a pitching and Q&A session on 2 September and the finalists will be selected to participate at the Innovate Lanka 2022 Demo Day scheduled for 9 September at Elegance, Colombo.

This competition aims to fund early-stage start-ups and SMEs those clearly solve a problem with an innovative solution for a large addressable market. Innovate Lanka is open to any start-up across all sectors island-wide in all three languages.

Applications are accepted until 30 August and those interested can submit duly completed applications to https://bit.ly/3BvGc0G.

The winner of Innovate Lanka 2022 will enter the (Global Entrepreneurship Network) GEN-Global Program, where they will take part in the Entrepreneurs World Cup 2022 Regional program. 

At the same time, all entrants will have the opportunity to secure funding via LAN and, its extensive global network of international Angel Investors and VC (Venture Capital) firms. 

The program will have a number of business domain and tech experts to mentor, accelerate, and assist them with go-to-market (GTM).

Innovate Lanka is a platform, that assists start-ups or SMEs with an innovative idea helping them with funding, accelerating, and mentoring until maturity or exit.

This is an initiative of the Council for Start-ups (CFS) of The Ceylon Chamber of Commerce (CCC), Lankan Angel Network (LAN), and Sri Lanka Association for Software Services Companies (SLASSCOM). 

Innovate Lanka is inclusive for all stakeholders who work and operate in the start-up and SME ecosystem domain. Information and Communication Technology Agency (ICTA), Export Development Board (EDB), and Industrial Development Board (IDB), being the National Partners; and the Council for Start-ups of the Ceylon Chamber of Commerce is the Industry Advocate.

The other stake holders are  Lankan Angel Network, Indian Angel Network, Global Business Angels Network, BOV Capital, Venture Engine and nVentures being the Investment Partners; KPMG, and PWC being the Knowledge Partners, SLASSCOM, and Sri Lanka @100 being the Ecosystem Partners; Wijeya Newspapers, Roar Global, The 87 Agency, and LMD being the Media Partners; Are We Legal, and Heritage Partners being the Legal Partners; and The American Chamber of Commerce in Sri Lanka (AMCHAM-SL) being the Business Network Partners.

; Venture Frontier, Hatch, Lanka Accelerator, Good Life X, Centre for SMEs of the Ceylon Chamber of Commerce, and Youth Business Sri Lanka (YBSL) being the Accelerator and Incubator Partners for this initiative. 

These entities have joined together to facilitate Sri Lankan entrepreneurs in accessing opportunities that will make them truly competitive in global markets.

Sri Lanka aims to set up a financial safety net of Rs 200 billion to provide social security support to the needy amidst the worst economic crisis in the country, President RanilWickremesinghe has announced.

The government is making maximum effort to reduce the impact through providing financial and logistical support,” said Mr.Wickremesinghe, who also holds the post of the finance minister of the debt-ridden economy.

President Wickremesinghe also explained that due to the pending food shortage, he was launching the food security programme in the country.

He was hopeful that through the food security programme, the government of the crisis hit country would be able to provide food free of charge to 10 percent of the population, who were unable to afford three meals.

He had previously warned of a food crisis in addition to the ongoing economic crisis, which has also left the country in shortage of fuel, gas, medicines as well as essential supplies.

Discussions were underway with Japan to regain their confidence and secure their support, the President  added.

He said that countries were stepping forward with assistance in food and medical supplies, however, no country was providing fuel free of charge.An IMF bailout programme is being currently worked out .

The government has introduced a new tax called “SocialSecurity Contribution” (SSC) at 2.5% on the annual threshold turnover of companies  exceeding Rs 120 million.

 The Finance Ministry estimates Rs 140 billion revenue throughthis tax. The SSC appears to be similar to NBT since it is a turnover tax although details of the base have not been providedIn 2018 and 2019, revenue collection from NBT was Rs 105 billion.

 The tax base for 2022 could be estimated as Rs 128 billion by considering nominal GDP growth since 2019.

 SSC rate (2.5%) is 25% higher than the NBT rate (2%)which could provide a potential SSC revenue of Rs 160 billion.

 However, theSSC tax-free threshold (turnover Rs 120 million per annum) is 10 times higher than the NBT threshold (Rs 12 million per annum). 

A 30% reduction in collection could be assumed due to this higher threshold (reducing the potential SSC collection from Rs 160billion to Rs 112 billion).