Author: Branita

A special meeting of the ruling party is scheduled to be held tomorrow (22) under the patronage of President Gotabaya Rajapaksa.

The meeting is to be held at Temple Trees at around 6.00 pm tomorrow, government sources told Ada Derana.

All members of parliament (MPs) from the ruling party have reportedly been informed to attend the mandatory meeting.

It is reported that the discussion will focus on economic issues, including the dollar crisis in the country.

Prior to the special meeting to be held in the evening, the ruling party’s parliamentary group is scheduled to meet tomorrow morning under the leadership of Prime Minister Mahinda Rajapaksa.

The meeting will be held at the Parliament complex, according to government sources.

China is considering offering a US$1.5 billion credit facility to Sri Lanka and a decision is expected soon, a top Chinese official said on Monday (Mar 21), as part of efforts to help the island nation amid its worst economic crisis in decades.

Chinese ambassador to Sri Lanka Qi Zhenhong told reporters the two sides were also discussing a separate loan of up to US$1 billion which the Sri Lankan government had requested.

He added that the South Asian nation was offered a loan of US$500 million from the China Development Bank on Mar 18.

Sri Lanka has to repay about US$4 billion worth of debt this year, including a US$1 billion international sovereign bond maturing in July. But its reserves dipped to US$2.31 billion as of end February, down around 70 per cent from two years ago.

The country is also struggling to make payments for imports of essentials such as fuel and medicines and enforcing nationwide power cuts due to a lack of fuel for power generation.

“We believe our ultimate goal is to solve the problem but there may be different ways to do so,” Qi said in response to questions on possible restructuring of the Chinese loans.

China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank and Japan.

Over the last decade, China has lent Sri Lanka more than US$5 billion for the construction of highways, ports, an airport and a coal power plant. But critics say the funds were used for white elephant projects with low returns, which China has denied.

President Gotabaya Rajapaksa asked China to help restructure debt repayments when he met Chinese Foreign Minister Wang Yi in January, but China is yet to respond to the request.

Repayments to China are estimated at about US$400 to US$500 million, a finance ministry source told Reuters.

Rajapaksa said last week Sri Lanka will work with the International Monetary Fund to help solve the country’s economic crisis with official talks to begin in mid-April.

Before the pandemic, China was Sri Lanka’s main source of tourists and the island imports more goods from China than from any other country.

Sri Lanka is a key part of China’s Belt and Road Initiative, a long-term plan to fund and build infrastructure linking China to the rest of the world, but which others including the United States have labelled a “debt trap” for smaller nations.

Sri Lanka firmed up a $1 billion credit line from neighboring India, a move that will ease a foreign exchange shortage for the nation even as it inches closer to an International Monetary Fund bailout.

The agreement, which includes aid for essentials like food and medicines, was signed between State Bank of India and the Sri Lankan government during Finance Minister Basil Rajapaksa’s visit to India Thursday.

#Agreement was signed between SBI and Government of Sri Lanka for $1 billion #credit facility for #procurement of food, medicine and other essential items to Sri Lanka. (2/2) pic.twitter.com/vfS1QHVSdX

— Ministry of Finance (@FinMinIndia) March 17, 2022

The aid comes at a time when a surge in oil prices, slower exports and a stunted tourism revival due to the war in Ukraine have jolted the $81 billion economy. President Gotabaya Rajapaksa said the government was in discussions with international financial institutions and friendly countries for repayment of loan installments, in an address to the nation on Wednesday.

The Indian subcontinent is the largest target market for the $1.12-billion Port City Colombo, which will build on ongoing political alignment between Sri Lanka and the country to offer key opportunities to Indian businesses, says the head of the commission overseeing the project.

Colombo Port City Economic Commission director general Saliya Wickramasuriya said in an interview that the project will offer opportunities both to Indian players, that already have a presence in Sri Lanka, and to those making their maiden foray into the island nation. He highlighted the separate laws being enacted for the port city and bespoke business solutions as its main attractions for Indian investors.

“With the changing economic circumstances both here and overseas, our target market is shifting slightly and the value proposition has to change accordingly…While there is recovery, there are still economic constraints everywhere and there are political disturbances everywhere,” Wickramasuriya said.

“So what we’re looking here is building on the relationships that already exist with entities who have invested in Sri Lanka. In particular, the Indian subcontinent is by far our largest target market,” he added.

The commission wants the “port city to be an international city” but it is also looking at more detailed, bespoke and customised solutions to “create value propositions for key anchor investors”, Wickramasuriya said.

Port City Colombo is being implemented by China Harbour Engineering Company, part of the China Communications Construction Company, to create a city on land reclaimed from the sea and extend Colombo’s central business district. The project consists of 269 hectares of reclaimed land, and the developers of the project are hoping it will benefit from a recent increase in economic cooperation between India and Sri Lanka.

The Indian side has provided a $500-million line of credit for purchasing fuel and a currency swap of $400 million under the Saarc facility. It has also deferred the payment of $515 million due to the Asian Clearing Union. The two sides also finalised the long-gestating project to refurbish and develop the Trincomalee oil farm, a storage facility with a capacity of almost one million tonnes.

Wickramasuriya acknowledged the economic problems currently being faced by Sri Lanka but was upbeat that the growing political alignment with India will benefit the project.

“I think bridges are being strengthened on the political front, which is good because it’s something we should do and keep doing with India, our oldest and biggest trading partner and also home to our largest contingent of arriving visitors,” he said.

Highlighting the port city’s potential for commercial and retail activities, he added, “There’s a lot of potential for Indian businesses to move one step closer to the world by coming to Sri Lanka, because a lot of Indian goods get trans-shipped through Sri Lanka…So, this is why we are offering an international financial centre concept in a convenient physical location for businesses that are in the goods and services movement business.”

The Colombo Port City Economic Commission is currently working on a set of 10 key policy frameworks and regulations, including regulations for banking and finance, setting up and winding down businesses, immigration, dispute resolution.

“Those regulations are being drafted and we are sealing up the ease of doing business indicator types. I would say by the end of April, we should be able to roll out our drafts to the market…,” Wickramasuriya said.

Although the struggle for justice for the Easter Sunday terror attacks of 21 April, 2019 reached a certain climax with Colombo Archbishop His Eminence Malcolm Cardinal Ranjith meeting with the Catholic church’s Head, His Holiness Pope Francis and addressing the United Nations Human Rights Council (UNHRC), the struggle for the same would continue locally, said the local Catholic church.

Speaking to The Morning, Colombo Archdiocese Social Communications Director Rev. Jude Chrishantha Fernando said: “The Archbishop, who is currently on a visit to the Vatican, met with the Pope. He also addressed the UNHRC in Geneva, Switzerland. With these efforts, our struggle to demand justice for the Easter Sunday terror attacks reached a climax. However, the struggle that we launched locally would also continue.”

As another step towards that end, he said that the Catholic church has planned to hold a series of commemorations during this year’s Easter Sunday on 17 April and also on 21 April, the latter in line with the third anniversary of the said terror attacks. He noted that a number of special events have been planned, including special services on both 17 April and 21 April, adding it is hoped to finalise such when Archbishop Ranjith, who is currently in Rome, Italy, returns to Sri Lanka.

The Colombo Archbishop met with Pope Francis on 28 February at the Vatican, and the Easter Sunday terror attacks and the related investigations were discussed during the said meeting.

“The Archbishop is meeting the Pope after two years and he is especially focusing on informing him that we need help from the international community to seek justice for the victims of the Easter Sunday terror attacks,” National Catholic Social Communications Centre Director Rev. Cyril Gamini Fernando said at a press conference held on the same day.

Following the meeting with the Pope, Archbishop Ranjith met UN High Commissioner for Human Rights Michelle Bachelet and discussed about revealing the truth behind the Easter Sunday terror attacks and bringing justice to the victims, on 2 March, in an approximately 45-minute-long discussion.

Furthermore, claiming that there are attempts to harass and intimidate those who demand justice for the said terror attacks, the Colombo Archbishop on 7 March called upon the UNHRC and its Member States to devise a means to ensure that the truth behind the said terror attacks would be uncovered.

Making a statement at the 49th session of the UNHRC, the Archbishop said that the first impression of this massacre was that it was purely the work of a few Islamist extremists. However, he claimed that subsequent investigations have indicated that the said terror attacks were a part of a grand political plot.

“Despite our repeated requests and those of civil organisations pursuing the truth, the incumbent Government of Sri Lanka has failed to mete out justice to the victims. Instead of uncovering the truth behind the terror attacks and prosecuting those responsible, there are attempts to harass and intimidate those who clamour for justice. As a result, nearly three years after the horrendous crime, we are still in the dark as to what really happened on that Easter Sunday,” he said.

On 21 April 2019, Easter Sunday, three churches (St. Sebastian’s Church in Katuwapitiya, St. Anthony’s Church in Kochchikade, and Zion Church in Batticaloa) and three luxury hotels in Colombo (Cinnamon Grand Colombo, The Kingsbury Colombo, and Shangri-La Colombo) were targeted in a series of co-ordinated suicide bombings. Later that day, another two bomb explosions took place at a house in Dematagoda and the Tropical Inn Lodge in Dehiwala. A total of 269 people excluding the bombers were killed in the bombings, including about 45 foreign nationals, while at least 500 were injured.

Liro Gas was unable to source the US $ 8 Million on Wednesday (16) to settle payment for a gas shipment that reached Sri Lanka.

According to Litro Gas, a shipment is valued at approximately US $ 3 Million, however, due to arrears and demurrages, the supplier is seeking the US $ 8 Million from Sri Lanka.

According to reports, the demurrages per day for this particular shipment is US $ 4,500/-, and Litro Gas revealed that it has payments to the tune of US $ 18 Million as demurrages to the supplier.

Where did it all go wrong?

If Litro Gas has opted for a long-term tender process, the payment for shipments could have been better managed.

Notably, the long-term tender of Litro Gas lapsed on the 28th of February 2022, and even at that time, Litro Gas has not taken any measures to finalize the renewal of the long-term tender.

Litro Gas has noted several reasons for the cause.

– The failed attempt to introduce a full functioning Siyolit (Pvt) Ltd, the special purpose vehicle (SPV) incorporated for Sri Lanka’s gas sector

– Crises that followed after reducing the weight of the domestic LP gas cylinders and distributing them to the local market

– Gas related accidents that were reported from across Sri Lanka

What is the situation at the moment?

Although the long-term tender awarded to a foreign supplier has expired, Litro Gas Lanka continues to purchase gas from the same company.

When a supply agreement is signed, the supplier usually agrees to supply at least 10 percent more or less of the total consignment.

Is gas being imported under this agreement?

Higher costs can’t be prevented when spot purchases are made for gas.

Last year, the chairman of Litro Gas criticized the supplier and blamed a mafia behind the transaction.

Is a mafia in operation at the moment, as mentioned by the Chairman of Litro?