Sri Lanka is set to call for investment proposals to redevelop the historic Bogambara Prison, with plans to transform the former jail into a commercially viable project while preserving its architectural and historical heritage, officials said.

Authorities stated that investment opportunities will be invited shortly to redevelop the 135-year-old prison complex, potentially as a hotel or mixed-use development. Any redevelopment will be carried out in a manner that safeguards the building’s original structure and distinctive architectural features. The prison consists of three floors, each containing 108 cells.

Bogambara Prison, constructed on reclaimed land following the filling of the Bogambara Lake, was officially closed on January 1, 2014. Historical records note that the building was architecturally designed by F. Vine.

The prison occupies a significant place in Sri Lanka’s penal and political history. It is recorded as the country’s only prison equipped with a gallows capable of carrying out two executions simultaneously. Among those executed at the facility were W.A. Siripala, popularly known as “Maru Sira,” and the renowned outlaw Utuwankande Sura Saradiyel.

Historical accounts also state that during executions, all entry gates to the prison were kept open to allow any last-minute reprieve orders to be delivered without obstruction, even at the final moment.

Several prominent political leaders were also incarcerated at Bogambara Prison, including Colvin R. de Silva, Philip Gunawardena and William de Silva.

Officials said the proposed redevelopment aims to reimagine the historic site for modern use, while ensuring that its rich past is carefully preserved and interpreted for future generations.

Prime Minister Dr. Harini Amarasuriya stated that the development of quality human resources is essential to ensure the country’s economic, social and cultural security, underscoring that education plays a decisive role in achieving this objective.

She emphasised that the Government is firmly committed to transforming the education sector and will continue to move forward with a clear vision and purpose, overcoming challenges encountered along the way.

The Prime Minister made these remarks while addressing the ‘EDCS Sisu Nena Pranama’ scholarship award ceremony held today (31) at Temple Trees. The event was organised to recognise the children of members of the Education Co-operative Society (EDCS) who have been selected to state universities for the 2023/2024 academic year.

Elaborating further, Dr. Amarasuriya said the programme, organised by the Education Service Employees’ Co-operative Thrift and Credit Society Ltd, goes beyond financial assistance and serves as a platform to appreciate the dedication of students and parents who are preparing to shoulder the responsibility of shaping the country’s future.

She also noted that it is a significant achievement that the society, which began in 1930 with just 58 members and a membership fee of one rupee, has grown into the largest cooperative society in South Asia, with a current membership of around 215,000.

Highlighting the rapid changes taking place globally, the Prime Minister stressed the growing need to strengthen human resources amid economic and environmental challenges, according to a statement issued by the Prime Minister’s Office. She pointed out that the education system must be transformed from the school level itself to meet the demands of the modern world, and urged students entering universities to become leaders and active contributors to this transformation.

Noting that nearly 300,000 students enter primary education each year but only about 40,000 gain admission to universities, the Prime Minister called on the beneficiaries to make the best use of this opportunity for the development of the country.

Addressing the event, Deputy Minister of Labour and General Secretary of the Ceylon Teachers Service Union, Mahinda Jayasinghe, said that due to corruption-free management, the society’s financial stability had increased from Rs. 1,200 million to Rs. 1,700 million within a short period of around nine months.

Under this year’s programme, scholarships amounting to over Rs. 13.7 million were awarded to 2,292 students selected to state universities.

The scholarship scheme, which began in 1984 with 15 students and an initial fund of Rs. 3,500, has been conducted continuously for 41 years. At present, scholarships of up to a maximum of Rs. 75,000 per student are awarded, reflecting the collective strength and solidarity of the teaching community.

Showers will occur at times in Northern, North-Central and Eastern provinces and in Matale and Nuwara Eliya districts. Fairly heavy falls above 50 mm are likely at some places in Northern province and in Trincomalee and Batticaloa districts.

Several spells of shower will occur in Uva and North-western provinces.

Showers or thundershowers are likely at several places in other areas of the island after 2.00 p.m, and fairly heavy falls above 50 mm are likely at some places.

Misty conditions can be expected at some places in Western, Sabaragamuwa and Central provinces and in Galle and Matara districts during the early hours of the morning.

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

Mahendra Amarasuriya

Ken Balendra (award accepted by Krishan Balendra)

Sohli Captain

Rohini Nanayakkara

Aban Pestonjee 

The Sri Lanka Institute of Directors (SLID), in partnership with the Association of Chartered Certified Accountants (ACCA), on Wednesday hosted the inaugural National Corporate Director Awards 2025. British High Commissioner Andrew Patrick was the Chief Guest. The Guest of Honour was Securities and Exchange Commission (SEC) Chairman Senior Professor D.B.P.H. Dissabandara, whilst International Finance Corporation (IFC) Principal Country Officer Victor Antonypillai was Special Guest. A key highlight was the awarding of Lifetime Achievement Awards to a select group of eminent corporate personalities for their outstanding service and contribution to the respective companies and the country, apart from unique feats. They were Mahendra Amarasuriya, Ken Balendra (Posthumously), Sohli Captain, Rohini Nanayakkara, and Aban Pestonjee. Pix by Sameera Wijesinghe

DAILY FT

Sri Lanka’s equity market is entering 2026 on an unusual footing: buoyed less by foreign capital and more by the growing confidence of domestic investors. According to Asia Securities PLC Chairman Dumith Fernando, this shift reflects a combination of interest rate stability, improving financial literacy, and favourable tax treatment factors that are reshaping market dynamics and investor behaviour.

Interest rates remain a central variable. Fernando expects movements of only 50 to 100 basis points, a range unlikely to materially disrupt asset allocation. With yields on fixed income instruments stabilising, equities continue to offer comparatively attractive long-term returns. This relative balance, he argues, reduces the risk of sudden capital flight from stocks to bonds, supporting valuation stability.

What distinguishes the current cycle is the rapid expansion of the local investor base. Data from the Central Depository Systems shows active equity investors increasing to around 98,000 in 2025, up from roughly 60,000 in 2024. New CDS account openings tripled year-on-year to 57,000, with another 5,000 accounts opened in just the first three weeks of 2026. This surge signals a structural rather than speculative shift, driven partly by the absence of capital gains tax and a relatively modest 15% withholding tax.

From a macroeconomic standpoint, deeper domestic participation reduces Sri Lanka’s historic dependence on volatile foreign portfolio flows. In previous cycles, foreign exits amplified market downturns, weakened the currency, and strained monetary policy. A locally anchored market offers greater resilience, helping to stabilise household wealth and corporate financing conditions.

Fernando also cautioned against pessimistic index projections. Lower market targets, he noted, would imply either subdued corporate earnings or sharp valuation compression—scenarios that would require a sudden rise in equity risk premiums. Given improving macro stability and earnings recovery in several sectors, such a shift appears unlikely.

Foreign investors, meanwhile, are no longer treating emerging markets as a single asset class. Global capital is increasingly selective, favouring diversification and liquidity. While Sri Lanka may benefit from this trend, Fernando stressed that foreign inflows are not essential for equities to deliver 20–25% growth, with overseas interest representing potential upside rather than a prerequisite.

However, equity market performance is not isolated from the broader economy. Stronger equity valuations improve firms’ access to capital, encourage private investment, and support job creation particularly in growth sectors such as digital services and telecommunications. In this sense, a domestically driven equity rally may play a stabilising role in Sri Lanka’s post-crisis recovery, provided confidence in macro policy is maintained.

Sri Lanka’s corporate leadership has sought to reassure investors following the recent cyclone, with Ceylon Chamber of Commerce Chairman and John Keells Holdings Chairman Krishan Balendra insisting that the economic impact has been “moderate” and largely contained. However, a closer examination of official assessments and sector-level data suggests a more complex and uneven economic reality.

Speaking at the Asia Securities Investor Conference, Balendra pointed to post-disaster assessments indicating that only about 10% of cultivated agricultural land was fully damaged, with another 5% partially affected. He noted that agricultural operations resumed quickly and argued that fears of prolonged food inflation had not materialised. While retail food prices initially surged by around 40%, particularly in urban supermarkets, supply chains stabilised within weeks.

Yet, macro-level estimates paint a starker picture. A World Bank rapid assessment places total cyclone-related damage at approximately US$4.1 billion, equivalent to 4% of Sri Lanka’s GDP. This figure far exceeds early private-sector estimates and underscores the scale of losses to infrastructure, livelihoods, and public assets costs that are not immediately visible in supermarket shelves or short-term consumption data.

Balendra also downplayed financial sector risks, stating that banks estimate only about 1% of total loan portfolios were affected. However, analysts note that such averages mask stress among smallholder farmers, informal enterprises, and regional borrowers, where repayment capacity has weakened despite system-wide stability.

In tourism, Balendra cited resilience, noting infrastructure damage of roughly Rs. 500 million and a rapid rebound in arrivals. Tourist numbers in the first 25 days of January reportedly exceeded last year’s record levels by 10%. While this reflects strong demand, economists caution that headline arrival figures do not capture revenue losses from discounted pricing, shortened stays, or postponed investments in affected regions.

Consumption indicators, including supermarket volumes, have indeed recovered. However, critics argue that consumption alone is an incomplete measure of economic health, especially in a post-disaster context where households may be drawing down savings or increasing debt.

Balendra’s optimism on 2026 growth driven by tourism, construction, ICT, and consumption—aligns with broader forecasts. Yet reconstruction spending, while stimulative, also increases fiscal pressure at a time when public finances remain fragile.

In sum, while the cyclone did not derail Sri Lanka’s short-term recovery narrative, independent assessments suggest its economic footprint is far larger than “moderate.” The challenge lies not in denying resilience, but in acknowledging hidden vulnerabilities that could resurface without targeted policy support.

Sri Lanka is increasingly positioning higher education not merely as a public service, but as a strategic economic asset. With literacy rates among the highest in South Asia and a long-established education framework inherited from the British system, policymakers now see education-led urban development as a new frontier for investment, exports, and skilled employment growth.

The Board of Investment’s push to develop University Towns in Keragala and Sooriyawewa reflects this shift. Globally, education hubs generate strong multiplier effects driving demand for housing, transport, healthcare, retail, and professional services.

 For Sri Lanka, still recovering from its economic crisis, such projects offer a rare combination of foreign exchange inflows, private capital mobilisation, and long-term human capital development.

The proposed Keragala University Town, located in the Gampaha District already the country’s largest student catchment has been structured as a 125-acre, master-planned campus hosting five universities.

With shared facilities and proximity to industrial zones, the model aims to integrate academic learning with industrial training. The BOI estimates investment needs of USD 370 million, with projected returns of 15–18% and a 6–7 year payback, figures that compare favourably with regional education developments.

The Sooriyawewa University Town in Hambantota is even more ambitious. Spread across 250 acres, it is designed as an integrated education and innovation ecosystem, combining higher education, vocational institutes, research centres, startup incubators, and digital learning platforms.

With projected investments of USD 640 million, the project targets global education providers seeking scale, lower operating costs, and access to South Asian markets.

The economic impact extends well beyond tuition revenues. International students bring foreign currency, while research and innovation hubs support higher productivity and technology transfer. Countries such as Malaysia and the UAE have demonstrated how education cities can generate billions annually while upgrading domestic skills.

 Sri Lanka’s advantage lies in cost competitiveness, English-language instruction, and geographic proximity to South Asia, the Middle East, and East Africa. Improved connectivity to airports and business districts further strengthens the investment case.

If executed effectively, University Towns could diversify Sri Lanka’s services exports, reduce brain drain by retaining local talent, and position the country as a regional education destination turning classrooms into catalysts for long-term economic resilience.

Sri Lanka’s tourism sector is losing an estimated $ 1.13 billion every year through economic leakages, despite generating more than $ 3 billion in annual earnings, according to the country’s first Rapid Assessment of Economic Leakages released yesterday. The findings have raised concerns over the quality and sustainability of tourism growth, particularly as the sector struggles to attract higher-spending visitors.

The assessment, conducted by the Sri Lanka Tourism Development Authority (SLTDA) with technical assistance from UN Tourism, examined three key areas: accommodation providers, inbound tour operators, and the wellness and Ayurveda segment. The report estimates tourism earnings at $ 3.17 billion in 2024 and approximately $ 3.2 billion in 2025, yet nearly one-third of that income flows out of the domestic economy.

Speaking at a stakeholder workshop held to unveil the findings, SLTDA Chairman Buddhika Hewawasam described the scale of leakage as “alarming,” while stressing that much of it is preventable. He said at least $ 1.13 billion is lost annually through both internal and external leakages, noting that while some level of leakage is inherent in tourism, a significant portion could be reduced through targeted reforms.

A major contributor to the outflow is import-dependent procurement. Hewawasam said imports linked to tourism operations exceed $ 800 million annually, driven by heavy reliance on foreign food and beverages, furniture, equipment, and energy. In addition, widespread informality within the sector results in an estimated $ 84.8 million in lost government revenue each year due to tax non-compliance.

The report also highlighted particularly high leakage rates in the wellness and Ayurveda segment, exceeding 50%. Hewawasam said this raises serious questions about sourcing practices and local value retention in a segment that should, in principle, be rooted in domestic resources and expertise.

Tourism Deputy Minister Prof. Ruwan Ranasinghe said the findings underscore the limitations of focusing solely on arrival numbers and headline revenue figures. He noted that roughly one-third of every tourism dollar earned leaves the country, reducing the sector’s contribution to local income, employment and fiscal stability.

While acknowledging that certain imports are unavoidable, Prof. Ranasinghe said the study identifies clear opportunities to strengthen domestic supply chains and retain a greater share of tourism-generated income within Sri Lanka.

UN Tourism Development Economist Prof. Frederic Thomas said the assessment was intended to shift the conversation from diagnosis to practical solutions. He noted that while some leakages are structural, others are avoidable and can be addressed through policy measures. Imports of goods and services, he said, account for the largest share of losses.

Discussions at the workshop focused on formalisation, licensing, digital payments, stronger local value chains and sustainability standards. The outcomes are expected to shape a three-year implementation roadmap led by the SLTDA, with a strategic shift from maximising visitor numbers to increasing value retention.

 Despite welcoming a record 2.36 million tourists in 2025, tourism income rose by only 1.6%, reflecting declining per-day spending. The SLTDA recently revised average daily tourist spending down to $ 148 from $ 171 estimated a decade ago, intensifying concerns over the sector’s long-term value creation.