By: Staff Writer

April 28, Colombo (LNW): Sri Lankans are facing growing confusion after contradictory explanations emerged from top government officials regarding the alleged US$2.5 million Treasury fund loss, with shifting narratives raising serious questions about transparency, internal controls, and possible information suppression.

Treasury Secretary Harshana Suriyapperuma confirmed that a cyber intrusion targeting the External Resources Department was detected in January 2026. He stated that hackers manipulated internal email communications and diverted funds to an external account, describing it as a coordinated cyber operation. According to him, the breach was only disclosed later due to security concerns and ongoing investigations.

However, this explanation was quickly complicated by Deputy Minister of Digital Economy Eranga Weeraratne, who rejected the framing of a direct system hack. He stated that the incident appears to be a sophisticated phishing and impersonation scam. Fraudsters allegedly created fake email domains and identities resembling legitimate international officials, deceiving authorities into authorising the payment.

Adding further complexity, Deputy Finance Minister Anil Jayantha Fernando said hackers gained access through compromised email systems, extracted sensitive data, and altered bank account details to redirect funds. He also confirmed that an internal Treasury inquiry involving senior officials had already led to disciplinary actions against some staff.

The fraud was reportedly detected when a similar attempt was made to divert funds intended for India, prompting closer scrutiny of transactions. Authorities have since engaged multiple agencies, including the Sri Lanka Computer Emergency Readiness Team, the Central Bank of Sri Lanka, and the Criminal Investigation Department, while also seeking assistance from Interpol to trace the stolen money through international banking channels.

Despite these efforts, the government’s shifting descriptions—ranging from “system breach” to “phishing impersonation”—have raised public doubts about whether officials are fully aligned on what actually happened. Critics argue that the inconsistency itself reflects deeper governance weaknesses.

Opposition MP Harsha de Silva has gone further, questioning the credibility of the cyber-attack narrative. He said the incident appears more like administrative negligence than an advanced cyber operation. According to him, standard financial safeguards were not followed, including verification of bank details and basic test transactions before releasing large payments.

Dr. de Silva stressed that payment instructions should have been cross-checked against original contracts and that such controls are routine in public finance systems. He warned that the issue cannot be reduced to money simply “going missing,” emphasizing that public funds were lost and responsibility must be clearly established.

He also called for parliamentary scrutiny, noting that oversight of public finances is a constitutional duty. The matter, he said, should be examined by the Committee on Public Finance to determine how such a lapse occurred within the Treasury system.

As investigations continue, the central question remains unresolved: was this a highly coordinated cybercrime, or a preventable breakdown of basic financial controls? The answer may determine not only accountability but also public trust in the government’s handling of sensitive financial systems.

By: Staff Writer

April 28, Colombo (LNW): Sri Lanka’s automotive sector is experiencing a sharp resurgence, but beneath the surface of rising vehicle registrations lies a complex economic trade-off. The latest data shows total registrations climbing to 59,734 units in March 2026, a 15.6 percent increase from the previous month—an expansion that signals renewed consumer confidence, yet simultaneously intensifies pressure on the country’s fragile external finances.

At the center of this surge is a strong shift toward electric mobility. Registrations of electric vehicles (EVs) have skyrocketed by over 165 percent within a single month, driven largely by brands such as BYD. This rapid adoption reflects a behavioral pivot among consumers seeking to shield themselves from volatile fuel prices. However, while EVs may reduce long-term fuel import costs, their upfront import burden still weighs heavily on Sri Lanka’s foreign exchange reserves.

The broader vehicle market tells a story of widespread demand across segments. Two-wheelers dominate the landscape, exceeding 41,000 units, with strong performances from manufacturers like Bajaj, Honda, and TVS. Passenger vehicles, particularly SUVs and crossovers, also posted moderate gains, led by Toyota and Honda, while compact cars saw increased traction from Suzuki alongside EV entrants.

However this growth comes at a cost. According to the Central Bank of Sri Lanka, the country spent over US$ 441 million on vehicle imports in just the first two months of 2026. Although February showed a slight dip in monthly expenditure, the surge in March registrations suggests that import demand remains robust. This creates a structural tension: rising vehicle ownership supports economic activity and mobility, but also accelerates the outflow of scarce foreign currency.

The composition of imports further complicates the picture. While EVs promise lower fuel dependency, they require significant initial capital outlays in foreign currency. Meanwhile, conventional and hybrid vehicles continue to contribute to fuel import bills, albeit at varying levels. The net effect is a dual burden short-term pressure from imports and ongoing energy costs.

Economic analysts, including Murtaza Jafferjee, argue that energy pricing is a key driver of these shifts. As fuel prices rise, consumers naturally gravitate toward electric alternatives. However, even this transition is not without challenges, as electricity tariffs are also expected to increase. Jafferjee points out that the growing adoption of rooftop solar systems could offset these costs, making EV ownership more sustainable over time.

Policy inconsistencies add another layer of complexity. The current tax regime, which ties excise duties to engine capacity for traditional vehicles and motor power for EVs, creates uneven incentives across technologies. This distortion risks skewing market behavior rather than guiding it efficiently.

Sri Lanka’s vehicle import boom thus presents a paradox. It reflects economic recovery and evolving consumer preferences, yet also exposes underlying vulnerabilities in external stability. Managing this balance will be critical. Without calibrated policy intervention, the road to modernization could come at the expense of macroeconomic resilience.

By: Staff Writer

April 28, Colombo (LNW): Sri Lanka is quietly reshaping the investment landscape of Colombo Port City, combining labour market reforms with commercial policy adjustments in an effort to revive foreign direct investment (FDI) interest. The dual-track strategy reflects both urgency and realism, as the flagship development grapples with subdued activity in early 2026.

At the heart of this shift is a recalibration of labour laws affecting strategically important businesses. Amendments to regulations linked to the Termination of Employment of Workmen Act mark a significant departure from earlier protections. By exempting key sections—particularly those requiring prior approval for terminations—the government has reduced procedural barriers that investors have long cited as constraints.

This move is not merely technical; it signals a broader ideological shift. Sri Lanka appears to be edging toward a more flexible labour regime, at least within designated economic zones and strategic sectors. For foreign investors, especially those in capital-intensive or rapidly evolving industries, such flexibility can be narrative. The ability to adjust workforce levels without lengthy bureaucratic processes enhances operational agility and cost management.

However, the reforms also raise questions about the balance between investor facilitation and worker protection. While other legal safeguards remain in place, the narrowing of TEWA’s scope could be perceived as a trade-off. For the Port City, which aims to position itself as a modern, globally competitive hub, maintaining credibility on governance and social standards will be crucial.

Complementing these labour changes is the easing of duty-free retail restrictions within the Port City. Faced with low foreign tourist engagement, authorities are broadening access to local consumers to stimulate economic activity. This adjustment highlights a key tension: the project’s original international focus versus the realities of current demand.

Together, these measures form a coordinated attempt to enhance the Port City’s attractiveness. Increased retail activity can create a more dynamic environment, while labour flexibility addresses structural concerns that may deter long-term investment. However, the effectiveness of this approach depends on execution.

One persistent challenge is regulatory oversight. Monitoring potential leakages of duty-free goods into the domestic market remains a priority, as lapses could erode investor confidence. Transparency and enforcement will be critical in reassuring stakeholders that the regulatory framework is robust.

Despite its current low ebb, Colombo Port City retains significant potential. Its strategic location, modern infrastructure, and special regulatory status offer a foundation that few regional competitors can match. What it lacks, at present, is momentum.

The recent policy changes suggest that Sri Lanka is willing to adapt an encouraging sign for investors watching from the sidelines. Whether these reforms can translate into tangible FDI inflows will depend on consistency, credibility, and the ability to rebuild the Port City’s global narrative.

For now, the message is clear: Sri Lanka is open for business, and increasingly willing to adjust the rules to prove it.