Sri Lanka’s Vehicular Emission Test Trust Fund (VETTF), a key initiative in curbing vehicle-related pollution, faces an uncertain future following sweeping fiscal reforms introduced under the Public Financial Management Act No. 44 of 2024.

The new legislation mandates the dissolution of all independently managed public funds and their integration into the central Treasury. As a result, the VETTF—established in 2008 to support vehicle emission regulation—is now required to transfer its financial assets to the Treasury by August 25, raising concerns over the continuity and autonomy of critical environmental efforts.

According to a senior Treasury official, the change is not aimed at abolishing the fund but is a “statutory requirement” to ensure greater transparency and centralized fiscal oversight. “Departments can no longer manage independent funds. Everything must now go through the Treasury,” he explained.

The Motor Traffic Department (MTD), which oversees the fund, confirmed the directive was communicated through an official circular. A senior MTD source, speaking on condition of anonymity, acknowledged the fund was deemed non-statutory under the new regulations, necessitating its dissolution.

The VETTF is financed through a 10 percent levy on vehicle emission tests, with the remaining 90 percent allocated to private testing companies. Though official figures are not disclosed, revenue from the program is estimated at Rs. 1.5–2 billion annually, based on test volumes and vehicle registrations.

Since its inception, the fund has supported a wide range of initiatives including random on-road emission checks, public education campaigns, training of emission testing technicians, and research into improving air quality. One of its notable projects in 2023 was the “WhatsApp Spotter” program, which empowered citizens to report vehicles emitting excessive smoke in real time.

Environmentalists and transport sector professionals are voicing concern that centralizing the fund’s management could reduce the efficiency and independence of these operations. They argue that the fund’s unique structure—governed by a five-member board and protected under a trust deed—has enabled targeted, responsive decision-making without reliance on Treasury funding.

The origins of the VETTF lie in public advocacy dating back to 1998 and a landmark Supreme Court ruling in 2000, which led to its creation as a mechanism to independently support vehicle emission regulation.

While the Treasury has assured continuity of operations under centralized management, critics warn that losing the fund’s autonomy could dilute its impact, undermine transparency, and stall progress in reducing vehicular emissions in Sri Lanka.

The Government is embarking on a strategic plan on revitalising the dairy industry with initiatives aimed at enhancing productivity, improving milk value chains, and supporting local farmers while encouraging private sector investments.

Key efforts include a new project utilising World Bank funding to boost dairy farm productivity in specific districts, and to transform state-owned dairy companies into efficient and market-driven enterprises.

A project funded by the World Bank is underway to enhance dairy farm productivity in key districts like Anuradhapura, Matale, and Galle ensuring a more efficient and sustainable dairy industry.

This strategic plan is aimed at transforming MILCO and the National Livestock Development Board into efficient and productive enterprises, according to President’s Office Sri Lanka.

A Milk Development Fund will be set up to support dairy farmers by improving their livelihoods and farming standards

Sri Lankan private sector has also stepped in to develop the dairy industry, aiming to boost milk production and meet local demand with the  encouragement of the government through initiatives like providing state land to private companies for commercial dairy farms and supporting local dairy farmers with training and insurance.

In a far reaching move to improve the dairy industry, Pelwatte Dairy Industries Ltd, Sri Lanka’s largest milk collector and a key player in the dairy sector is expanding its production capacity with a Rs.3.1 billion investment in a state-of-the-art Greenfield dairy processing facility in Ibbagamuwa, Kurunegala.

Founder Chairman of Pelwatte Dairy Industries, Master Divers, and President of Mawbima Lanka Foundation Ariyaseela Wickramanayake, said  that the new factory is being developed as an environmentally sustainable project featuring modern

 At initial capacity, the new plant will process 50,000 to 80,000 litres of milk daily, sourced directly from farmers across the Northwestern Province and the full capacity will be set at 300,000 litres. The factory is scheduled for completion by June 2026. 

The company currently exports ice cream and butter to the Maldives and is preparing to expand into other international markets, including Seychelles and Mauritius. It also exports milk powder mainly to China and a few African countries

He expressed the belief that Sri Lanka could achieve self-sufficient dairy and sugar production as well as major agricultural crops with the encouragement of the government. 

Mr. Wickramanyake disclosed that he was instrumental in initiating the concept of Hambantota port which is now becoming a regional hub for the East-West maritime traffic

He noted that he realised the importance of a seaport in Hambantota in the seventies, and did several studies on it. In 1997, he wrote a book on why it has to be Hambantota a strategic location, he added. .

Agriculture was the success of Sri Lanka‘s past and it is the future too” he said pointing out that that farming practices have sustained communities in the past, also hold the key to a sustainable and prosperous future prospects

In a major development within Sri Lanka’s external debt restructuring journey, the country officially signed a bilateral debt agreement with France on Monday (June 16) in Colombo, according to the Ministry of Finance.

Representing the Sri Lankan government, Treasury Secretary Mahinda Siriwardana inked the deal, while William Roos, Assistant Secretary of Multilateral Affairs from the French Treasury, signed on behalf of France.

The Finance Ministry highlighted this agreement as a vital indicator of Sri Lanka’s dedication to swiftly concluding its debt restructuring program to restore debt sustainability and rejuvenate the national economy.

France, along with Japan and India, played a prominent role in co-chairing Sri Lanka’s Official Creditor Committee (OCC), guiding the country through complex negotiations to restructure its foreign debt. The Ministry praised France’s leadership and constructive involvement, emphasizing that such collaborative efforts have enabled significant progress in stabilizing Sri Lanka’s finances.

This agreement also signals an intention to deepen longstanding diplomatic and economic ties between France and Sri Lanka.

The French Embassy noted that 2023 marked a high point in bilateral relations, as leaders of both countries engaged in frequent high-level discussions. French President Emmanuel Macron and Sri Lankan President Ranil Wickremesinghe met three times during the year—in Paris during the Summit for a New Global Financing Pact in June, in Colombo in July, and again in October on the sidelines of COP28 in Dubai.

Notably, 2023 also saw the first formal political dialogue between the two nations, held in Colombo in October. The second edition of these top-level talks is scheduled to take place in France later in 2024, further strengthening political cooperation.

France, Sri Lanka’s fourth-largest official bilateral creditor, has been instrumental in uniting the creditor community. A key milestone was reached in June 2023 when negotiations culminated in Paris with a joint agreement signed by the OCC co-chairs and China’s Exim Bank. This agreement was formalized at the French Ministry of Economy and Finance during the 11th Paris Forum.

The latest bilateral pact enables France to expand its development cooperation in Sri Lanka. According to the Finance Ministry, French agencies such as AFD (Agence Française de Développement), the Economic Department, and the Embassy’s Cooperation and Cultural Action Department have consistently supported Sri Lanka—even during periods of economic turmoil.

The agreement stands as a testament to international solidarity and France’s enduring commitment to Sri Lanka’s recovery, paving the way for enhanced collaboration across economic, political, and cultural sectors.

Colombo, June 17 — Prime Minister Dr. Harini Amarasuriya reaffirmed the Government’s commitment to developing community-based and rural tourism while speaking at the inaugural China–Sri Lanka–Maldives Tourism Forum, held in Colombo on Monday (16) under the theme “Connectivity and Collaborative Success along the Silk Road.”

Addressing delegates, the Prime Minister highlighted the Government’s vision of a tourism sector that not only drives economic growth, but also empowers rural communities, protects ecosystems, and preserves cultural heritage.

“Our focus is on building a tourism industry that supports women entrepreneurs, youth participation, and eco-tourism, while strengthening the capacity of local tourism service providers,” she said. “Tourism must reach beyond the cities and touch underrepresented regions, ensuring benefits flow to rural communities.”

The Prime Minister also underlined the value of regional cooperation, calling for collaboration in visa streamlining, health and safety standards, digital infrastructure, and joint marketing strategies. She noted that working with China and the Maldives presents valuable opportunities to elevate the tourism industry in all three countries.

In a broader context, she described tourism as a tool for peacebuilding and human connection, stating, “In a divided world, tourism opens pathways to unite across borders, cultures, and generations.”

The event was attended by Chinese and Maldivian diplomatic representatives, senior officials from the Chinese Ministry of Culture and Tourism, and other invited dignitaries.