Sri Lanka the plantation companies continued to face financial pressure, including managing lease payments to the government for the land they operate on.
The industry is primarily based on state-owned land, and these companies are required to pay annual lease fees to the government. These payments are a significant part of their operational costs.
A total of 249,843 hectares of land owned by the government had been transferred to 23 local plantation companies on a lease basis for a period of 53 years in the year 1992.
The lease revenue of Rs. 587 million had been in arrears to the government from 10 of those companies as at 31 December 2023, Government Auditor General’s latest report revealed
The lease payments for plantation companies are typically calculated based on the acreage of land they operate and its designated usage (e.g., tea, rubber, coconut cultivation). These fees have been adjusted over the years, and the rates are periodically reviewed by the government, plantation industry sources disclosed. . .
In recent years, there has been a push from the government to increase lease fees, which has added to the financial burden on plantation companies, several heads of plantation companies complained. .
Companies have often expressed concerns about these increases, particularly given the fluctuating international commodity prices, unfavorable weather conditions, and other operational costs that impact profitability.
Plantation companies with large land holdings often face challenges in managing their lease obligations alongside other debts. The significant lease payments can strain liquidity, especially when profits are low due to factors like fluctuating crop yields or high operational costs.
There have been discussions within the industry about the need for a more transparent and fair system for calculating lease payments. Some stakeholders argue that the government should offer more flexibility or reduce fees to help plantation companies sustain their operations and remain competitive.
Eight out of 16 estates owned by the Sri Lanka State Plantation Corporation were in loss condition in the year 2023.
Although there are 09 tea factories attached to the corporation at present, only 03 factories are doing production and 05 factories had been closed for a long time.
One of the tea factories was closed for maintenance from October 2022 and although the Knuckles Bungalow in the disused Gomara Estate was among several sightseeing spots, the corporation had not taken steps to repair and use that bungalow, audit report observed.
Sri Lanka is seeking investors to develop the Sapugaskanda oil refinery, which includes the establishment of a new refinery within the same premises.
The Government said that although the Ceylon Petroleum Corporation has made various efforts to modernize and upgrade the Sapugaskanda oil refinery both quantitatively and qualitatively to fulfill the demand of the market, all those efforts have not been successful.
Even though cabinet approval had been granted to establish the Sapugaskanda oil refinery as a public enterprise separate from the Ceylon Petroleum Corporation.
CPC is to identify an appropriate strategic investment partner and to take necessary steps after investigation of the possibility for the establishment of a new oil refinery in the Trincomalee area for that purpose, no action has been taken in that respect so far.
Under the policy framework relevant to the energy of the present government, the modernization of the existing refinery or construction of a new refinery has been identified as a priority function.
Approval had been granted by the board of directors of the Ceylon Petroleum Corporation to call for expressions of interest to identify a suitable investment partner based on the feasibility study conducted in the year 2022.
Accordingly, the Cabinet of Ministers has approved a proposal presented by the Minister of Power and Energy to develop the Sapugaskanda oil refinery and call for expressions of interest for the identification and selection of suitable financial suppliers/investors.
This is for the implementation of the project for the establishment of a new refinery within the same premises with a capacity of 100,000 barrels per day on the basis of an operation and transfer (BOT) system.
The rationale behind the move stems from the necessity of a ‘critical investment’ to modernise and upgrade the ageing infrastructure of the refinery. The aim is to ensure its operational efficiency and viability for at least another 25 years,” the Government Information Department noted.
Under the Ceylon Petroleum Corporation (CPC) restructuring plan, the CPC-owned refinery will be set up as a separate Government-owned and operated entity to attract and raise investments with the aim of improving fuel quality, efficiency, capacity, and reducing costs.
The restructuring plan includes revising the currently approved cadre and salary structure of the CPC while digital platforms will be introduced for multiple functions and service
The government’s aim is to get rid of the country’s only oil refinery with a capacity to supply 100percent of the country’s kerosene requirement, 50 percent of the aviation fuel requirement, and100 percent of the naphtha requirement.,
It was used to produce 30 percent of the diesel requirement, 14percent of the petrol requirement, 7-8percent of the gas requirement, and 75-100percent of the furnace oil requirement.
Initially designed to process 38,000 barrels of crude oil, the refinery currently has a capacity of refining about 50,000 barrels per day.
Sapugaskanda Refinery was built by Iran under the guidance of the Ceylon Petroleum Corporation (CPC) in August, 1969.
A senior engineer of the CPC said that the closure of the Sapugaskanda Oil Refinery would cost the country an additional sum of US$ 1.1 million a day to meet its crude oil requirement.He further claimed “
The refinery has been shut down on several occasions and it has cost a lot of money to resume its operations. This was a national crime, he added
Russian Ambassador to Sri Lanka, Levan S. Dzhagaryan, affirmed Russia’s support for Sri Lanka’s bid for BRICS membership while emphasizing that the final decision would be made through consensus among member nations.
Speaking at a press conference held at the Russian Embassy in Colombo to mark the third anniversary of Russia’s military operation in Ukraine, Ambassador Dzhagaryan stated that Russia, no longer holding the BRICS chairmanship, will review Sri Lanka’s application alongside other prospective members.
The Ambassador also praised Sri Lanka’s neutral stance on the Russia-Ukraine conflict and expressed hope that the new government, led by President Anura Kumara Dissanayake, would maintain this approach.
On the topic of Russia’s assistance in setting up a nuclear power plant in Sri Lanka, Dzhagaryan revealed that despite multiple discussions between Rosatom State Corporation and Sri Lanka’s Atomic Energy Authority, no significant progress had been made. He stressed that it was up to the Sri Lankan government to proceed with the project, adding that Russia had provided the best proposal for nuclear energy development in the country.
Ukraine Conflict and Global Politics
Ambassador Dzhagaryan reiterated Russia’s position on the Ukraine conflict, calling for the demilitarization of Ukraine and its recognition as a neutral, non-aligned, and non-nuclear state. He also urged the West to acknowledge Crimea, Sevastopol, Donetsk, Luhansk, Kherson, and Zaporizhia as integral parts of Russia, while demanding the lifting of sanctions imposed by Western nations.
He welcomed former U.S. President Donald Trump’s recent telephone conversation with Russian President Vladimir Putin, stating that it provided a “new window” for dialogue. However, he noted that Russia had yet to receive serious proposals from the U.S. and stressed that any negotiations must be based on equality, mutual respect, and acknowledgment of the situation on the battlefield.
Criticizing what he described as Western double standards, the Russian Ambassador questioned why the humanitarian consequences of NATO’s military actions in Yugoslavia, Afghanistan, and Libya were not scrutinized in the same way as Russia’s operations in Ukraine.
Dzhagaryan justified Russia’s military actions, stating that the Special Military Operation launched on February 24, 2022, was necessary. He recalled that early negotiations in Istanbul had led to an agreement that Ukraine initially accepted but later abandoned, allegedly under pressure from then-UK Prime Minister Boris Johnson.
The press conference concluded with the Ambassador reaffirming Russia’s commitment to strengthening ties with Sri Lanka across multiple sectors, including energy, trade, and defense cooperation.
The National Water Supply and Drainage Board (NWSDB) has disconnected the water supply to an area near the official residence of former President Mahinda Rajapaksa in Wijerama due to the non-payment of a bill amounting to Rs. 428,968.
Responding to inquiries, NWSDB Deputy General Manager Ekanayake Weerasinghe clarified that the disconnection was not at the former President’s official residence but at a location nearby, identified as a security personnel’s quarters. He emphasized that the water bill for the former President’s residence is up to date and there have been no issues regarding its payments.
“When our employees went to disconnect the water supply, they were informed that a group of police officers were staying there. However, we have no confirmation on whether they are part of the former President’s security detail,” Weerasinghe said.
The NWSDB confirmed that multiple prior notices were issued regarding the outstanding bill before the water supply was disconnected.
More than 260 foreign nationals, including Sri Lankans, who were trapped in cybercrime camps in Myanmar, have been rescued and handed over to Thai authorities.
The Democratic Karen Benevolent Army (DKBA), a Myanmar rebel group, raided the cybercrime camps in Myawaddy District on February 11 and freed 261 foreign victims. The rescued individuals, including nationals from Sri Lanka, the Philippines, Bangladesh, Brazil, Nepal, Kenya, Laos, Ethiopia, Pakistan, Tanzania, Uganda, and Taiwan, were handed over to Thai authorities the following day.
Sri Lanka’s Minister of Foreign Affairs, Foreign Employment, and Tourism Vijitha Herath requested urgent assistance from his Thai counterpart, Maris Sangiampongsa, to ensure the safe repatriation of trafficked Sri Lankans. Thailand has already facilitated the return of 58 Sri Lankans, while efforts are ongoing to rescue 18 more who are reportedly still trapped and facing mistreatment.
The crackdown on human trafficking and cyber fraud along the Myanmar-Thailand border has intensified, with the DKBA highlighting the challenges of rescuing victims due to demands from Myanmar’s Junta immigration authorities and the difficult terrain.
The Sri Lankan Foreign Ministry, in coordination with Thailand and Myanmar, continues to work toward securing the safe return of the remaining victims.
Colombo, February 13, 2025 – Adani Green Energy, a subsidiary of India’s Adani Group, has announced its decision to withdraw from the planned $1 billion wind power project in Sri Lanka.
The project aimed to develop 484 MW Renewable Energy Wind Farms in Mannar and Pooneryn, along with a 220 KV and 400 KV transmission network to distribute electricity to the southern part of the country.
In an official statement, the Adani Group confirmed its board’s decision to “respectfully withdraw” from the wind energy and transmission projects while remaining open to future collaboration if invited by the Sri Lankan government.
Despite securing most of the necessary approvals, Adani cited unresolved environmental clearances and ongoing Supreme Court litigation as key reasons for the withdrawal. The company also noted concerns over the Sri Lankan government’s recent decision to form new committees to renegotiate the project terms.
The Sri Lankan government had been in discussions with Adani to reduce the power tariff, which was initially set at US cents 8.62 per kilowatt-hour, as approved in May 2024. A new project committee appointed this year recommended lowering the tariff to below US cents 5.50, aligning with global market rates.
The Ministry of Power stated that the review process focused on legal compliance, environmental impact, and financial feasibility to ensure the project met national interests.
With Adani’s withdrawal, Sri Lanka may now seek alternative investors or renegotiate renewable energy initiatives to meet its long-term energy goals.
Sri Lanka, an island nation strategically located at the crossroads of maritime trade routes, shares a deep and enduring relationship with its closest neighbour, India. Rooted in history, culture, and economic ties, this relationship has evolved into a partnership of strategic significance. In fact, the Minister of Foreign Affairs, Vijitha Herath, recently stated that India has always stood by Sri Lanka as a close friend. The government of Prime Minister Narendra Modi, through his ‘Neighbourhood First’ policy and SAGAR (Security and Growth for All in the Region) framework, has further consolidated ties and expanded cooperation. Sri Lanka acknowledges India’s tremendous support during its economic crisis, including assistance with debt restructuring arrangements in collaboration with the IMF.
India’s lifeline during the crisis
Sri Lanka’s economic crisis in 2022 left the country grappling with severe shortages of fuel, medicine, and food. As the nation teetered on the brink of collapse, India stepped in with nearly $ 4 billion in aid, including credit lines for essential imports, currency swaps, and deferred loan repayments. This assistance not only stabilised the economy in the short term but also laid the foundation for deeper economic collaboration between the two countries.
India’s commitment did not end with emergency aid. It has since expanded its role, focusing on long-term recovery strategies, particularly in renewable energy, infrastructure development, and regional trade partnerships. These efforts underline India’s steadfast commitment to Sri Lanka’s economic stability and its broader vision of regional prosperity.
Transforming Sri Lanka’s energy sector
Energy security remains a pressing concern for Sri Lanka, and India has played a critical role in addressing this challenge. Renewable energy projects, particularly in the Northern and Eastern Provinces, have been a focal point of collaboration. Indian companies have invested in wind and solar farms, aiming to reduce Sri Lanka’s reliance on imported fuel while promoting sustainable energy solutions (Reuters, 2025a). The Indian Oil Corporation (IOC) has also expanded its footprint in Sri Lanka by upgrading fuel storage and distribution networks to bolster energy security.
However, recent developments have introduced complexities in this collaboration. Sri Lanka is now looking to renegotiate a $ 442 million power purchase agreement with India’s Adani Group. Despite this setback, India remains committed to energy cooperation, with plans to supply liquefied natural gas (LNG) to Sri Lanka and integrate the two nations’ power grids, enhancing regional energy stability (Reuters, 2025b).
Boosting tourism
Tourism, a vital pillar of Sri Lanka’s economy, has significantly benefited from India’s partnership. Indian tourists consistently represent the largest segment of international arrivals, drawn by Sri Lanka’s cultural heritage, pristine beaches, and natural beauty (Daily FT, 2025). Recognising the sector’s potential, both nations have simplified visa processes and collaborated to promote Sri Lanka as a prime travel destination for Indian tourists. These joint efforts have not only boosted visitor numbers but also provided much-needed revenue to Sri Lanka’s tourism-dependent regions. As the sector continues to recover, India’s role as a key source market for tourists highlights the mutual benefits of strengthening ties in this area.
Infrastructure development
Infrastructure development has been another cornerstone of India’s contributions to Sri Lanka’s recovery. Major projects funded by India, such as the modernisation of railway lines and the development of Kankesanthurai Harbour, have improved internal connectivity while enhancing trade routes with India (AP News, 2024). Additionally, both nations are actively working to finalise the Economic and Technology Cooperation Agreement (ETCA) to deepen economic ties and promote trade and investment.
After a five-year hiatus, negotiations resumed in Colombo in late 2023, where both sides reviewed progress and deliberated on key aspects, including trade in goods and services, customs procedures, and dispute resolution mechanisms (PIB, 2023).
Driving trade
India has consistently ranked as one of Sri Lanka’s largest trading partners, with bilateral trade exceeding $ 5 billion annually (Weerakkody, 2024). Sri Lanka’s apparel industry, a key export sector, heavily depends on Indian raw materials and machinery, which help maintain its competitiveness in global markets.
India’s role in Sri Lanka’s healthcare sector is equally significant, with the supply of affordable medicines and medical equipment meeting critical public health needs. Recent discussions have emphasised expanding trade ties through initiatives like ETCA and facilitating Indian Rupee-Sri Lankan Rupee trade settlements (Times of India, 2025).
Balancing regional dynamics
While India has been a reliable partner, China’s significant investments in Sri Lanka’s infrastructure have added complexity to the island’s foreign policy. For example, Sri Lanka recently fast-tracked a $ 3.7 billion oil refinery project with China in Hambantota, signalling Beijing’s deepening influence in the region (Reuters, 2025c). Striking a balance between these relationships will be crucial for Sri Lanka’s sovereignty and long-term economic sustainability.
Conclusion
India’s contributions to Sri Lanka’s recovery underscore the strength and depth of their bilateral relationship. From providing critical financial assistance during the economic crisis to investing in energy, trade, tourism, and infrastructure, India has proven to be an indispensable partner.
As Sri Lanka continues on its path to recovery with a new Government, deepening its partnership with India will be essential. By leveraging India’s support and fostering collaboration across key sectors, Sri Lanka can unlock new opportunities and fast-track its economic growth.
References:
Reuters, 2025a. Sri Lanka revokes power purchase deal with Adani Group, AFP reports. [online] Available at: https://www.reuters.com/markets/deals/sri-lanka-revokes-power-purchase-deal-with-adani-group-afp-reports-2025-01-24/ [Accessed 24 Jan. 2025].
Reuters, 2025b. Sri Lanka agrees with China’s Sinopec to fast-track $3.7 billion refinery. [online] Available at: https://www.reuters.com/world/asia-pacific/sri-lanka-china-agree-fast-track-sinopecs-37-bln-refinery-hambantota-2025-01-22/ [Accessed 24 Jan. 2025].
Daily FT, 2025. India and Sri Lanka usher 2025 with deepened partnership: Jha. [online] Available at: https://www.ft.lk/front-page/India-and-Sri-Lanka-usher-2025-with-deepened-partnership-Jha/44-771521 [Accessed 24 Jan. 2025].
Press Information Bureau (PIB), 2023. India and Sri Lanka re-launch negotiations of the Economic and Technology Cooperation Agreement (ETCA). [online] Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1973859 [Accessed 24 Jan. 2025].
Times of India, 2025. India, Sri Lanka eye deeper trade, investment collaboration. [online] Available at: https://timesofindia.indiatimes.com/india/india-sri-lanka-eye-deeper-trade-investment-collaboration/articleshow/116371166.cms [Accessed 24 Jan. 2025].
Weerakkody, D., 2024. India and China key for Sri Lanka’s full recovery. Daily FT, [online] Available at: https://www.ft.lk/dinesh-weerakkody/India-and-China-key-for-Sri-Lanka-s-full-recovery/5-767754 [Accessed 24 Jan. 2025].
(The writer teaches Accounting and Finance at University of Buckingham UK.)
February 13, Colombo (LNW): A significant meeting was recently held to review the Action Plan of Sri Lanka’s Women Parliamentarians’ Caucus, led by Prime Minister Dr. Harini Amarasuriya and the Chairperson of the Caucus, Minister of Women and Child Affairs, Saroja Savitri Paulraj.
The gathering, which took place on February 07, focused on several key initiatives aimed at strengthening the role of women in governance and enhancing their representation across various political levels.
One of the main discussions centred on achieving 25 per cent female representation at the provincial level. The Caucus deliberated on the legal amendments needed to bring this proposal to fruition, with a focus on ensuring that women have an equal and active role in the upcoming elections.
It was agreed that the next steps would involve pushing for amendments to current laws to pave the way for this goal.
Further discussions were held around the importance of engaging with political parties to advocate for greater female representation in provincial and local government bodies.
The Caucus decided to meet with party leaders and secretaries to press for the appointment of more women to key positions in these sectors, aiming to increase their visibility and influence in decision-making processes.
In addition to these legislative and political advancements, the meeting also addressed pressing social issues such as the elimination of sexual harassment in the workplace and the need to tackle Sexual and Gender-Based Violence (SGBV).
The Caucus members agreed to continue their work in promoting safer and more inclusive environments for women across the country.
Plans for International Women’s Day, set to be observed on March 08, were also discussed, with the aim of using the occasion to raise awareness and drive further action on the issues affecting women in Sri Lanka.
The meeting was attended by Deputy Co-Chairpersons of the Caucus, including Parliamentarians Chamindrani Kiriella, Samanmali Gunasinghe, Rohini Kumari Wijerathna, Geetha Herath, Sagarika Athauda, Kaushalya Ariyarathne, Oshani Umanga, Krishnan Kalaichelvi, Nilanthi Kottahachchi, M.A.C.S. Chathuri Gangani, Nilusha Lakmali Gamage, A.M.M.M. Rathwaththe, Deepthi Wasalage, Hiruni Wijesinghe, Ambika Samivel, and Lakmali Hemachandra.
February 13, Colombo (LNW): Adani Green Energy, a subsidiary of the Indian conglomerate Adani Group led by billionaire Gautam Adani, has announced its decision to withdraw from a planned wind energy project in the Mannar region of Sri Lanka.
The decision marks a significant shift for the company, which had previously aimed to contribute to Sri Lanka’s renewable energy efforts.
In an official statement, a spokesperson for the Adani Group confirmed that the company’s board had communicated its decision to the Sri Lankan authorities.
Whilst the withdrawal from the wind energy venture represents a setback for the project, the group clarified that it remains committed to strengthening ties with Sri Lanka and is open to exploring future opportunities for collaboration, should the Sri Lankan government seek their involvement.
Despite this change in direction, the Adani Group expressed its continued interest in contributing to Sri Lanka’s energy landscape, suggesting that future projects may still be on the cards if aligned with the government’s long-term energy goals.
