September 03, Colombo (LNW): The Sri Lankan Cabinet has greenlit the implementation of extensive salary revisions across the public sector, following recommendations from a Presidential Expert Committee led by Udaya R. Seneviratne.

This decision, aimed at rectifying long-standing pay discrepancies, will see substantial salary increases for government employees, effective from January 1, 2025.

The new pay structure introduces a minimum salary increase of 24 per cent for the lowest ranks in public service, with increments ranging up to over 50 per cent for higher-ranking professionals.

These revisions, as outlined by the President’s Media Division (PMD), are designed to bring more equitable compensation across various government roles.

For specific service categories, the following increments have been approved:

• Office Employees’ Service: Increases range from Rs.5,450 for Grade III to Rs.13,980 for Special Grade.
• Drivers’ Service: Salary boosts from Rs.6,960 in Grade III to Rs.16,340 in Special Grade.
• Samurdhi Development Officers: Enhancements of Rs.8,340 to Rs.15,685 across grades.
• Management Service Officers/Management Assistants: Increments between Rs.10,140 and Rs.17,550.
• Development Officers: Raises from Rs.12,710 in Grade III to Rs.25,150 in Grade I.
• Public Health Inspectors and Midwives: Increases between Rs.12,885 and Rs.25,275.
• Pharmacists and Radiographers: Boosts from Rs.13,280 to Rs.25,720.
• Nursing Officers: Salary hikes ranging from Rs.13,725 to Rs.26,165.
• Principal’s Service: Substantial increments from Rs.23,425 to Rs.39,595 across grades.
• Teaching Service: Raises for educators from Rs.17,480 to Rs.38,020.
• Sri Lanka Police: Significant salary boosts across ranks, from Rs.10,704 for Police Constables to Rs.23,685 for Chief Inspectors.
• Grama Niladhari: Increases from Rs.11,340 in Grade III to Rs.23,575 for Administrative GN Officers.
• Higher Administrative Roles: For roles such as Assistant Secretary, Assistant Director, and others, increments range from Rs.28,885 to Rs.57,545, depending on rank.
• Doctors: Major salary hikes with Grade III doctors receiving Rs.35,560, and Specialist Doctors up to Rs.70,200.

In addition to these adjustments, it has been recommended to double the value of salary increments annually for all government employees.

This pay rise will extend beyond the central government, applying to public corporations, boards, statutory bodies, universities, and the armed forces from January 1, 2025.

September 03, Colombo (LNW): Karunarathna Paranawithana of the Samagi Jana Balawegaya (SJB) was officially sworn in as a Member of Parliament today (03), succeeding Thalatha Athukorala, who recently resigned.

Paranawithana took his oaths before Speaker Mahinda Yapa Abeywardena during the commencement of parliamentary proceedings.

Paranawithana’s appointment follows the Election Commission’s gazetting of his name on 28 August 2024, after the Ratnapura District seat was vacated by Athukorala’s resignation.

His political career includes serving as Deputy Minister of Parliamentary Reforms and Mass Media and Deputy Minister of Skills Development and Vocational Training.

Before entering politics, he held the position of Secretary to the Ministry of Mass Media but stepped down to contest in the 2015 parliamentary elections under the United National Front for Good Governance (UNFGG).

Thalatha Athukorala, who stepped down on 21 August 2024, had a distinguished political career, having first been elected to Parliament in 2004. She successfully retained her seat in the 2010, 2015, and 2020 elections, representing the Ratnapura District.

September 03, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa and North-western provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts, the Department of Meteorology said in its daily weather forecast today (03).

Heavy showers above 100 mm are likely at some places in Western and Sabaragamuwa provinces and in Galle and Matara districts.

Showers or thundershowers may occur at a few places in Eastern and Uva provinces during the evening or night.

Strong winds about (40-50) kmph can be expected at times over Western slopes of the central hills, Northern, North-central and North-western provinces and in Hambantota and Trincomalee districts.

The general public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.

The sun is going to be directly over the latitudes of Sri Lanka during 28^th of August to 06^th of September due to its apparent southward relative motion. The nearest places of Sri Lanka over which the sun is overhead today (03) are Negombo, Gampola, Bibile and Akkaraipattu about 12.09 noon.

Marine Weather:

1. President Ranil Wickremesinghe announces plans to establish a new investment company that will manage state assets, protecting people’s rights and enabling structured retirement planning: adds new laws will support this initiative, which aims to generate assets through investments: The President made these remarks at a Colombo event yesterday, introducing a new retirement insurance system by the SANASA Movement.
   
2. Former Kilinochchi District MP Murugesu Chandrakumar, General Secretary of the Samaththuva Kadchi, announces he endorsed Opposition Leader Sajith Premadasa, the Samagi Jana Balawegaya’s presidential candidate, for the upcoming election: Chandrakumar, who served as an MP from 1994 to 2000 and 2010 to 2015, was also the Deputy Chairman of Committees in Parliament for over a decade.
   
3. National People’s Power (NPP) Leader and Presidential candidate MP Anura Kumara Dissanayake alleges the camps of President Ranil Wickremesinghe and Opposition Leader Sajith Premadasa are discussing strategies to hinder the NPP’s success in the 2024 Presidential Election: claims that these discussions are focused on collaboration to reverse NPP’s electoral gains, despite apparent conflicts between the two leaders.
   
4. The Cabinet of Ministers approves visa-free entry for citizens of 38 countries, adopting Singapore’s efficient ‘one-chop’ system: The move aims to reduce congestion at visa counters: The policy, effective from 1 October 2024, will last six months and includes countries like the UK, US, Canada, Germany, Australia, China, India, and Russia.
   
5. The Registrar General’s Department launches an Online Authentication Portal for Birth, Marriage, and Death certificates via the Consular Affairs Division: Foreign Minister Ali Sabry highlights that this initiative, following online appointments, alleviates public inconvenience: The system now certifies 50-55% of documents online, with the aim to eventually enable complete online certification, enhancing public service efficiency.
   
6. The Examinations Department schedules the 2024 Grade 5 scholarship examination for September 15, from 09:30 a.m. to 12:15 p.m.: The exam will be conducted at 2,849 centres across Sri Lanka.
   
7. The Government Medical Officers Association (GMOA) will begin protests today against a disciplinary inquiry targeting its Assistant Secretary, Dr. Palitha Rajapaksha, of Badulla Teaching Hospital: claims the inquiry, launched by the Health Ministry, is biased and politically influenced, following Dr. Rajapaksha’s exposure of a critical drug shortage in 2022: The protests aim to defend trade union rights and demand inquiry fairness.
   
8. A Commonwealth Observer Group, led by former Seychelles President Danny Faure, will monitor Sri Lanka’s Presidential Election on 21 September 2024: Deployed by Commonwealth Secretary-General Patricia Scotland, the 15-member group will assess the election’s credibility, including pre-election conditions, voting procedures, and post-election processes: Their findings will be presented in a final report to strengthen future elections in Sri Lanka.
   
9. The Criminal Investigation Department (CID) enlists the assistance of the Chinese Special Criminal Investigation Unit to combat a rise in online financial frauds involving foreign nationals, particularly Chinese citizens: Investigations face challenges due to language barriers in analysing suspects’ electronic devices: Ten Chinese officers are now collaborating with Sri Lankan authorities to advance these investigations.
   
10. The Sri Lankan diving team triumphs as overall champions at the 14th Singapore National Diving Championship, winning 26 medals, including seven golds: Notable performers included Raphail Jayaweera and Ruel Wickramaratne, who each secured multiple golds: Sri Lanka outperformed competitors from six nations, with strong showings across various events, including synchronised and individual dives, showcasing the team’s exceptional talent.

By: Staff Writer

September 02, Colombo (LNW): Sri Lanka’s ongoing State-Owned Enterprise (SOE) reforms are unfolding during an unprecedented economic crisis and the lead-up to the 2024 Presidential election.

While the economic situation emphasizes the necessity of reforms, the timing of the election means that privatization must be postponed.

The focus should now shift to improving management, transparency, competition, and regulation, which would significantly enhance the value of these SOEs to both investors and society before any privatization occurs.

There is concern that the election might reveal widespread opposition to privatization, making it unfeasible afterward. Inviting bids now could lead to private bidders factoring in higher risks due to potential policy reversals post-election, resulting in lower bids. Privatization would be more effective if approached in a deliberate and measured way.

No decisions regarding the privatization and restructuring of SOEs assigned to the SOE Restructuring Unit (SOERU) will be made until after the new president takes office. SOERU Head Suresh Shah confirmed that decisions related to SOE privatization will only be made after the Presidential election, depending on the policies of the new president.

Shah noted that while restructuring efforts will continue, any decision on privatization will be deferred until after the election. The period for submitting bids for Sri Lanka Telecom (SLT) has been extended, with final bids expected by October.

Similarly, the bid period for Lanka Hospitals has been extended, and a decision regarding the bid from Melwa Hotels and Resorts Ltd. for Hotel Developers (Lanka) Ltd. (HDL), the holding company of Hilton Colombo, will be made after the election.

When SOERU was established in 2022, it was intended to be modeled after Singapore’s Temasek Holdings, acting as a holding company for all SOEs. However, the enactment of the new SOE law that would formalize this structure has been delayed.

Sri Lanka’s SOEs have underperformed on multiple levels for decades. Many of the 52 SOEs identified as key by the government generate adverse efficiency, fiscal, and distributional impacts. Information gaps abound.

 Even the total number of SOEs is uncertain: estimates range from 300-500. Country reports under the current IMF programme in Sri Lanka show that Sri Lanka was long delayed in meeting the commitment to publish annual reports of the 52 SOEs, even up to 2022.

Mismanagement and a lack of transparency pervade the sector, perpetuating corruption vulnerabilities and weak corporate governance.

Deep reform is critical but requires a well-thought-out strategy given the sector’s multiple problems. After two privatization waves from the late 1980s-1994 and from 1995-2004,

SOE reforms have shown little traction. SOE reform is difficult in the best of circumstances. It requires effective, accountable and inclusive political and economic institutions.

The reform modality, timing, sequencing, public messaging and transparency, competition and solid regulation are critical to enhancing the value of these SOEs to investors and society. Privatizing now, instead of focusing on these aspects, puts the cart before the horse.

By: Staff Writer

September 02, Colombo (LNW): Sri Lanka’s construction industry is on the cusp of a significant revival, driven by ongoing efforts to restructure external debt.

Projects that were previously stalled due to financial constraints, partially funded through bilateral agreements, are expected to resume as the debt restructuring process concludes.

This renewed financial support is anticipated to inject essential liquidity into the sector, allowing large-scale infrastructure projects to move forward, thereby boosting economic growth.

The Central Bank reported a rise in Sri Lanka’s Purchasing Managers’ Index for Construction (PMI – Construction) in July 2024, with the index reaching 62.9.

This increase reflects a steady uptick in construction activities, particularly in projects funded by multilateral agencies. New orders also expanded in July, indicating a consistent flow of construction projects.

However, the employment rate in the sector contracted, though at a slower pace compared to June. The quantity of purchases also increased in line with the heightened activity levels.

Despite these positive developments, challenges remain. Several survey respondents reported a shortage of bitumen, a critical material for road construction. Additionally, while the prices of most construction materials continued to decline, the delivery time for supplies lengthened, albeit at a slower rate in July.

In an effort to revive the struggling construction sector, the Finance Ministry is planning to propose several key measures, including easing taxes on building materials in the upcoming 2024 budget.

These proposals, aimed at increasing the construction industry’s contribution to the GDP, include 13 far-reaching measures submitted to President Ranil Wickremesinghe by the Urban Development and Housing Ministry.

These proposals emphasize the need to prevent a total collapse of the sector, which supports the livelihoods of 20% of the country’s population.

The Finance Ministry is also considering pre-budget submissions from construction sector stakeholders. This includes proposals to ease taxes on building materials like cement and steel, which have seen unusual price hikes and shortages in the local market.

The Committee on Public Finance (COPF) has already highlighted these issues to the Finance Ministry.

Additionally, the government is contemplating the introduction of a mechanism to use current market prices of construction materials when calculating price variations for reimbursing contractors working on public projects.

The soaring prices of materials like cement and steel have significantly impacted the industry, leading to a 23.1% contraction in the construction sector and a substantial loss of jobs.

 The construction sector’s decline was confirmed by the Census and Statistics Department, which reported a 23.1% drop in building work during the second quarter of 2023 compared to the same period last year.

The rising prices of essential materials like cement and steel, driven by undue profits in the market, have exacerbated the sector’s challenges. Efforts to reduce these prices by lowering taxes are being considered as part of the broader strategy to revive the industry.

By: Staff Writer

September 02, Colombo (LNW): Sri Lanka’s land prices, particularly in the Western Province and Colombo, have shown a notable increase, as reflected in the latest Land Valuation Indicator (LVI) compiled by the Central Bank. 

The LVI for the Colombo District rose by 6.9% year-on-year in the first half of 2024, with residential and commercial land values each climbing by 8.5% and industrial land values by 3.7%. 

This growth marks a faster rate of increase compared to the second half of 2023, though industrial land values have lagged behind residential and commercial properties.

The Land Price Index (LPI), which has been in place since 1998 and was renamed LVI in 2020, has expanded its coverage over the years to include all 13 DS divisions in the Colombo District. 

This rebasing, which took 2017 as the base period, reflects the dynamic nature of the property market in Sri Lanka. 

The increasing land prices, however, add to the financial pressures faced by the middle class, particularly when combined with the escalating cost of construction.

The construction costs in Sri Lanka are exorbitantly high, driven largely by the steep prices of raw materials.

For example, cement and steel are significantly more expensive in Sri Lanka compared to neighboring countries like Thailand and Singapore. 

These high costs are exacerbated by import restrictions, tariff barriers, and a list of items excluded from Free Trade Agreements (FTAs), which limit access to cheaper construction materials.

Tariffs and para-tariffs, such as those imposed on tiles, further inflate construction costs. In 2021, total tariffs on tiles were about 83%, with additional costs from high energy prices making locally produced materials less competitive. 

The narrative of ‘saving dollars’ through import restrictions is often used to justify these high tariffs, though in reality, it shields local manufacturers who struggle to compete without these protections.

The impact of high construction costs is profound for Sri Lanka’s middle class.

The financial burden of building or buying a house often forces them to forgo other significant life choices, such as higher education, investments, or wealth creation. 

For instance, a 500 sq ft house is affordable only to those in the 70th income percentile, while a 1,000 sq ft house is within reach for those in the 75th percentile, highlighting the economic strain on the majority of the population.

This challenge is not limited to housing but extends to other sectors like tourism, where high refurbishment costs make it difficult for hotels to remain competitive.

The solution lies in creating a more competitive market by removing construction materials from the negative list and eliminating para-tariffs. 

This would reduce construction costs, enabling the middle class to allocate resources to other areas of their lives, thereby stimulating broader economic growth.

September 02, Colombo (LNW): The Government Medical Officers Association (GMOA) has announced plans to launch widespread protests tomorrow (03), condemning what it describes as a biased and unjust disciplinary investigation against one of its senior members.

The protests are in response to a disciplinary inquiry initiated by the Ministry of Health against Dr Palitha Rajapaksha, the Assistant Secretary of the GMOA and a senior medical professional at Badulla Teaching Hospital.

The inquiry targets Dr Rajapaksha due to his efforts in highlighting the severe drug shortage at the hospital in 2022, an issue that the GMOA claims was of critical importance to patient care and public health, the Union claimed.

Dr Rajapaksha, known for his active role in trade union activities, has been accused of violating the establishment code, with the inquiry portraying his efforts to expose flaws within the health sector as serious misconduct.

The GMOA argues that this disciplinary action is both partial and unfounded, raising concerns about potential political motivations behind the inquiry.

The association has expressed deep dissatisfaction with the Ministry of Health’s handling of the situation, alleging that their repeated appeals to senior government officials and higher authorities have been disregarded.

The GMOA believes that this inquiry sets a dangerous precedent for trade union rights and could stifle the ability of medical professionals to advocate for necessary changes within the healthcare system.

In a recent meeting, the GMOA resolved to take significant trade union action in support of Dr Rajapaksha. The planned protests will take place at hospitals across all districts, with the GMOA warning the government that failure to address their concerns could lead to escalated union action.

September 02, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates slight appreciation against the US Dollar today (02) in comparison to last week, as per the official exchange rates released by the Central Bank of Sri Lanka (CBSL).

Accordingly, the buying price of the US Dollar has dropped to Rs. 294.78 from Rs. 295.38, and the selling price to Rs. 303.84 from Rs. 304.58.

The LKR, meanwhile, indicates appreciation against several other foreign currencies as well. These include Gulf currencies too.