By: Staff Writer

April 04, Colombo (LNW): SriLankan Airlines will get two out four A330 wide-body aircraft from Ireland-based ORIX Aviation and Aergo Capital Ltd., on monitoring lease facilities, along with an additional aircraft SriLankan Airlines Chairman Ashok Pathirage disclosed.

The move follows a decision by the Cabinet of Ministers at its meeting held on Monday based on the recommendations of the Technical Evaluation Committee (TEC) and the Standing Procurement Committee.

Cabinet Co-Spokesman and Minister Bandula Gunawardena told the media the approved contracts include the lease of two aircraft from ORIX Aviation and two aircraft from Aergo Capital Ltd.

Under these contracts, ORIX Aviation will provide two aircraft on a monthly lease of $ 360,000 for six years, whilst Aergo Capital Ltd., will lease two aircraft for a monthly fee of $ 365,000, spanning eight years,” he said at the post-Cabinet meeting media briefing held yesterday.

The proposal to this effect submitted by Ports, Shipping and Aviation Minister Nimal Siripala De Silva was approved by the Cabinet of Ministers at its meeting on Monday.

SriLankan Airlines Chairman Ashok Pathirage disclosed that the airline has contracted for three A320s, one of which is already received. Additionally, the airline has received offers for six A330s and hopes of finalising these acquisitions by the end of the year.

He said the fleet expansion of the national carrier remains an immediate focus as the current fleet consists of 17 aircraft, of which three are grounded.

Previously, the Cabinet of Ministers approved the acquisition of two aircraft for SriLankan Airlines under an operational lease scheme during their meeting held on 18 March.

Justifying the decision, Gunawardena said these aircraft leases expect to facilitate the seamless operation of services of the national carrier.

The lease will allow the airline to continue operations till a deal is reached in the interim,” he explained the rationale for leasing aircraft amid the Government extending the tender to sell the airline to investors.

SriLankan Airlines Chairman Ashok Pathirage revealed yesterday that procurement delays have resulted in only two of the four wide-body aircraft approved by the Cabinet being available for lease for the national carrier.

Speaking to the media, Pathirage explained that the lengthy Government procurement procedures, coupled with the high global demand for aircraft post-COVID pandemic, have significantly delayed the acquisition of additional flights for the airline.

Recalling that the lease cost of an A330 airplane of A330 four years ago was $ 1 million, but after taking a 25% haircut, they were able to lease one for $ 750,000, he argued that $ 360,000 for a six-year lease was a favourable price for an airplane.

By: Staff Writer

April 04, Colombo (LNW): The government will soon crack down on foreigners doing business in Sri Lanka using their tourist visas with the help of local undercover organizations with political patronage, official sources said.

Several foreign nationals including Russians, Ukrainians, Italaians, Chinese, Indian and Israelis who were in Sri Lanka under tourist visas were operating businesses in tourist hotspots which had severely hampered the local tourist industry.

Several foreign nationals mainly Russians and Ukrainians who have been in the country long term due to conflicts in their own countries are now running cafes, restaurants, bars to exchange money and running undial services and providing accommodation and transport.

They were, using loopholes in the country’s emigration and immigration regulations, taken the law for granted with the support of a tourism promotion organization headed by former. Ambassador of Sri Lanka to Russia Udayanga Weeratunge, several tourist agency operators alleged.

Public Security Minister Tiran Alles said that Russians and Ukrainians who have been in Sri Lanka since February 2022 will need to apply for a visa or leave the country.

Informed sources said that some foreign nationals who had been conducting businesses illegally had already been deported in recent weeks and raids are presently being conducted, especially in the south as most establishments were unregistered.

This foreign tourists in the country with tourist visas are continuing business activities mainly in the tourist hot spots in the south and it has now spread to Ella, Sigiriya and anuradhapura areas.

The government will soon introduce new laws clearly stating that foreigners arriving in Sri Lanka under tourist visas will not be able to operate any businesses while here and those who wish to do so must enter through valid visas

Moreover foreigners must have a local partner in order to operate a business in the country and the business must be registered with the relevant institutions including the Sri Lanka Tourist Development Authority (SLTDA).

If any foreigner is caught going against these laws, they will be arrested and deported, sources said stating that presently the situation of tourists operating businesses had ‘gone out of control’.

President Ranil Wickremesinghe has been briefed about the situation and has agreed to draft new and clear laws in order to prevent diplomatic misunderstandings with the countries concerned.

By: Staff Writer

April 04, Colombo (LNW): The Singaporean company that owns the cargo ship that collided with the Francis Scott Key Bridge last week took steps Monday to limit its liability for the accident while Sri Lanka claims only one out of. 57 containers onboard was destined for Colombo.

The Dali, a 984-foot-long vessel carrying shipping containers, struck one of the Key Bridge’s support columns around 1:30 a.m. Tuesday, causing the tragic collapse. Six people are presumed dead, and a salvage operation is underway to clear debris and recover the bodies of the four victims that have not yet been located.

There are believed to be eight construction workers who were on the bridge at the time of the collision. In addition to the six victims, two other workers were rescued from the water.

Ports, Shipping and Aviation Minister Nimal Siripala De Silva that “the Maersk shipping line confirmed that there were 57 containers with toxic materials that can be categorised under the International Maritime Dangerous Goods Code. But only one box was bound for Colombo and the rest were for re-exports,” he told journalists.

Addressing misinformation circulating in the media, the Minister criticised individuals lacking proper knowledge of the situation. He highlighted that the vessel’s final destination was China, a detail he claimed was overlooked in media coverage.

The Minister also underscored the necessity of handling classified goods, such as flammables and hazardous materials, in international trade and logistics.

“Goods falling under classifications 1-9 require special approval from the Ministry of Defence and under the current law we have been doing that without any issue,” he said.

Regarding cargo declaration procedures, the Minister clarified that containers’ contents must be declared 72 hours or three days before arrival at the Colombo Port. “However, given the negative publicity surrounding the incident, authorities sought additional details from the shipping line,” he added.

“We still do not know what exactly what is in that one container bound for Colombo. We would only know when the vessel entered the Indian Ocean. But now the ship won’t come as per the scheduled date,” he said.

The six-page, preemptive filing in the U.S. District Court in Baltimore from Grace Ocean Private Limited, and the manager of the ship, Synergy Marine Group, is potentially in anticipation of a wave of civil lawsuits or a Justice Department civil complaint.

The company, represented by a group of attorneys from Baltimore and Washington, asks the court to “issue an order enjoining the commencement of or further prosecution of any claims or causes of action against Petitioners except in this action” and that the court “determine that Petitioners are not liable for any loss or damage arising out of the Casualty.”

Hatton, 2 April 2024: Sri Lanka’s youngest ever Cabinet Minister and the Minister for Water Supply and Estate Infrastructure Development in Sri Lanka, Jeevan Thondaman, apologised to the Muslim community for the mandatory cremation policy enforced during the COVID-19 pandemic under the previous Government of Gotabaya Rajapaksa.

The unexpected apology came during an Ifthar gathering held in Hatton town on Tuesday, 2 April 2024, hosted by Minister Thondaman. The Minister apologised and acknowledged the distress the policy had caused among the Muslim community. Although the Minister only assumed duties in January last year, he said it was still important that as the present Minister responsible for water, he had to take responsibility irrespective of who was sitting in his place before.

The forced creation policy under President Gotabaya Rajapaksa was driven by concerns that burial of COVID-19 victims could contaminate water supplies. This was despite several scientific opinions, including that of the World Health Organisation, refuting that claim.

The previous Government’s position has now been challenged and refuted by new scientific findings of a study led by experts from the University of Sri Jayewardenepura and an update to it by the Joint Research and Demonstration Centre for Water Technology (JRDC) at the University of Peradeniya, a centre under the Ministry of Water Supply and Estate Infrastructure Development. The update to the original study was done on the instructions of Minister Thondaman after becoming the subject Minister last year.

The first study, led by experts from the University of Sri Jayewardenepura and financially supported by the Ministry of Water Supply, investigated the presence of the SARS-CoV-2 virus in surface and wastewater across various locations in Sri Lanka. Conducted between August and December 2021, this research aimed to assess the risk of viral transmission through water, a concern that originally motivated the cremation mandate.

Complementing this, a comprehensive review study by the JRDC analysed the effects of COVID-19-infected bodies’ burial on groundwater contamination. Published this year (2024), this review concluded there was no risk to groundwater pollution from properly conducted burials during the pandemic. The study emphasised that proper burial procedures, including deep burial in sealed body bags, effectively mitigated any risk of environmental contamination.

The study also highlighted that the presence of SARS-CoV-2 RNA in various water sources did not stem from burial practices but rather from the faeces and urine of infected individuals, further debunking the initial assumptions that underpinned the cremation policy.

The Minister’s apology marks a critical step towards healing the wounds inflicted by the pandemic’s divisive policies, reaffirming the Government’s dedication to evidence-based decision-making and respect for all cultural and religious practices in Sri Lanka.

Minister Thondaman said that he will soon be submitting a Cabinet paper together with the findings of the study to seek a formal apology from the Government for the harm and hurt caused to especially the Muslim community from the forced cremation policy.

By: Staff Writer

April 03, Colombo (LNW): Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando yesterday confirmed that the Minimum Room Rate (MRR) effective since 1 October last year, has made a positive impact to the overall wellbeing and growth of the tourism sector.

“The progress of the MRR has been very good not just for the Colombo City Hotels but also establishments outside the capital in increasing room rates during the season. It has had a positive impact overall on the industry yields,” he told the Daily FT.

Highlighting the importance of market conditions and industry standards in determining the future implementation of the MRR, Fernando stressed the importance of reaching a mutual understanding and agreement among all stakeholders regarding the regime’s implementation.

Responding to industry concerns about the impact of forward bookings on the MRR, Fernando explained that all walk-in and free independent travellers (FIT) were required to comply with the rates set by Colombo City Hotels.

This policy in turn, allowed other establishments outside Colombo to adjust their rates, benefiting the entire industry and the economy,” he added.

Fernando also shed light on the significant contribution of Indian travellers to tourism sector, particularly in terms of spending and their preferences for gaming.

“An Indian traveller spends 4.6 nights on an average. However, the bulk of the Indians tourists coming to Sri Lanka are for gambling purposes, where most of them are staying in plush hotels.

Despite no records, it is evident that the indirect income generated via tourism is quite high. Thus, the MRR in Colombo City Hotels is a just a miniscule amount to the Indian travellers coming to enjoy casinos,” he said.

Fernando said that the authority will undergo a thorough review of the MRR in collaboration with industry stakeholders this week.

The reintroduction of the MRR regime for six months from 1 October 2023, particularly for struggling city hotels, was to come to an end on 31 March.

The SLTDA Chief suggested that reaching a consensus among industry stakeholders could mitigate the need for regulatory intervention, ultimately benefiting all parties involved.

Fernando asserted the importance of addressing market demands and enhancing the overall visitor experience to ensure sustained growth and success in Sri Lanka’s tourism sector.

Several tourism associations, yesterday, rebuked calls by what they alleged as “a cartel of lazy hoteliers” to continue with Government regulated Minimum Room Rates (MRR), stating that Sri Lanka lost close to 40% of additional occupancy due its implementation, and a decision to continue could lead to the breakdown of the industry.

By: Staff Writer

April 03, Colombo (LNW): The government has decided to import a total of 1,000 buses and vans to improve the transportation facilities provided to tourists.

Accordingly, in a bid to boost the tourism sector, the Cabinet of Ministers granted approval to a proposal presented by the Minister of Tourism and Lands to import 750 vans and 250 buses.

As per the proposal, 6-15 seater vans, as well as 16-30 seater (small) buses and 30-45 seater (large) buses are planned to be imported, without any special tax relief.

The government says that, although it is considered a custom in the tourist industry that vehicles engaged in the industry for tourist transportation should not be used for more than 6 years, it is apparent that the condition of the vehicles used in the industry is not satisfactory and sufficient.

In a statement, it added that the fame earned by Sri Lanka as a prominent tourist destination is tarnished due to the usage of age-old vehicles as a result of the limitation of vehicles and essential spare parts.

Therefore, the requirement of importing vehicles essential for enhancing the industry has been recognized by the government, considering the contribution to the tourist industry within the economic revival process of Sri Lanka.

The Government of Sri Lanka’s consideration of lifting the restrictions on vehicle imports without a control mechanism could lead to a mass outflow of the gradually improving foreign reserves, warns industry experts.

Leading Motor trader noted that stakeholders in the industry have already proposed a mechanism with a duty that comes over 1 ½-2 years, but the Government has not announced any sort of mechanism along with the lift on vehicle import restrictions.

He also stressed that the removal of restrictions on buses and commercial vehicles can have detrimental consequences as the Government is to extend the import of buses that are 10 years old.

He said: “They (the Government) has to consider the environment when bringing buses which are 10 years old and have a mileage of 1 million kilometres.”

The industry expert reiterated that the safety of passengers is at stake in importing such vehicles merely to save money, which would cost the Government further along with maintaining old vehicles.

He further added that the industry that specialises in busses and commercial vehicles will benefit but that the Government should consider the aspect of the two-wheelers, as well, to kick-start small businesses.

By: Staff Writer

April 03, Colombo (LNW): The World Bank yesterday said Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilisation, following the severe economic downturn but the country still faces elevated poverty levels, income inequality, and labour market concerns.

The fresh assessment of the multilateral donor agency is contained in its latest bi-annual update.

Released yesterday the Sri Lanka Development Update, Bridge to Recovery, highlights that Sri Lanka saw declining inflation, higher revenues on the back of the implementation of new fiscal policies, and a current account surplus for the first time in nearly five decades, buoyed by increased remittances and a rebound in tourism.

However, poverty rates continued to rise for the fourth year in a row, with an estimated 25.9% of Sri Lankans living below the poverty line in 2023.

Labour force participation has also seen a decline, particularly among women and in urban areas, exacerbated by the closure of micro, small, and medium-sized enterprises (MSMEs).

“Households are grappling with multiple pressures from high prices, income losses, and under employment. This has led to households taking on debt to meet food requirements and maintain spending on health and education,” according to the report.

“Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms,” emphasised World Bank Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos.

“This involves a two-pronged strategy: first, to maintain reforms that contribute to macroeconomic stability and second, to accelerate reforms to stimulate private investment and capital inflows, which are crucial for economic growth and poverty reduction.”

Looking forward, the report projects a modest pickup in growth of 2.5% in 2025, with a gradual increase in inflation and a small current account surplus.

However, high debt service obligations are expected to exert pressure on fiscal balances. Poverty rates are anticipated to remain above 22% until 2026.

Risks to the outlook remain, particularly related to inadequate debt restructuring, reversal of reforms, financial sector vulnerabilities, and the enduring impact of the crisis.

The report emphasises that strong reform implementation will be fundamental to fostering a resilient economy through continued macro-fiscal-financial stability, greater private sector investment, and addressing risks associated with state-owned enterprises.

By: Staff Writer

April 03, Colombo (LNW): Sri Lanka Bank business revival units set up during the Covid -19 pandemic period will be strengthened to operate independently under current normal circumstances to help Small medium and corporate enterprises that have bad loans to continue their operations, Central Bank Governor Governor Nandalal Weerasinghe said

The Central Bank of Sri Lanka issued broad guidelines to licensed banks on 28 March 2024, to further strengthen the functions of already established Post COVID-19 Revival Units and reformulate suchunits as Business Revival Units (BRUs).

The enhanced scope of proposed BRUs will facilitate sustainable revival of viable businesses affected by the extraordinary macroeconomic conditions and ensure the proper handling of the increased impaired assets of licensed banks.

The Central Bank sought relevant stakeholder views including the banking industry and the Chamber of Commerce, when formulating these guidelines.

The challenging macroeconomic conditions prevailed during the recent years have led to disrupting the income generating activities of businesses, adversely impacting the ability of borrowers to duly repay their loans and thereby impairing the recovery process of licensed banks.

Thus, the setting up of BRUs is considered imperative to assist both performing and non-performing borrowers of licensed banks whose businesses are fundamentally viable to revive.

Licensed banks are required to have robust business revival and rehabilitation policies and procedures to support revival of businesses, Central Bank guidelines indicated. .

Large banks with more than 50 branches, may consider establishing BRUs at large branches/regional offices of banks, in order to support revival of businesses of affected borrowers more effectively and efficiently.

Fundamental viability of a business is a key factor for the consideration of business revival by a licensed bank. In the viability assessment, both financial and non-financial indicators are taken into consideration.

Borrower’s continuous cooperation will be critical for the process of reviving a stressed business. The business can be revived through both financial and operational restructuring tools and processes.

The selection of an appropriate set of revival tools is subject to a mutual agreement of parties involved in the revival process.

Corporate borrowers who have outstanding credit facilities at multiple banks may agree on a “Corporate Workout Framework” on a voluntary and mutually agreeable basis, without the court intervention, to address financial and/ or business distress faced by them.

For this purpose, a “Corporate” is defined as a business with an annual turnover above Rs. 1 bn, as per the audited financial statements, or cumulative outstanding credit facilities granted by licensed banks are equal to or more than Rs. 250 mn.

Licensed banks are required to establish BRUs by mid-May 2024, and be fully compliant with the requirements of the Circular by 01 July 2024.