Provincial Council Elections Planned For First Six Months Of Next Year

Minister of Transport, Highways, Ports, and Civil Aviation Bimal Rathnayake says that preparations are underway to hold the provincial council elections during the first six months of next year (2026).

The Minister said that steps have already been taken to resolve existing legal issues related to the election process.

He emphasized that the government is prioritizing the provincial council elections, aiming to hold them before broader constitutional reforms are introduced.

While constitutional changes remain part of a wider political process, the immediate focus is on addressing legal obstacles to ensure the elections proceed as planned, he added.

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Lanka to borrow US$500 mn in yuan to cover CEP1 cost

President Anura Kumara Dissanayake has sought Cabinet approval to borrow the equivalent of US$500 million in renminbi (RMB) from the EXIM Bank of China and to separately disburse US$438 million of Sri Lankan government funds to complete the long-delayed first section of the Central Expressway (CEP 1).

This means that Sri Lanka, which has no RMB income, will have to convert its US dollar reserves to repay the loan. It additionally necessitates an amendment to the original commercial contract agreement, for which Cabinet approval has also been sought. The change in currency from USD to RMB is at the request of China EXIM.

Earlier this month, a committee appointed to analyse outstanding financial claims from the Metallurgical Corporation of China Ltd (MCC), the contractor for the 37.1 km stretch from Kadawatha to Mirigama, recommended settling the multibillion-rupee payments and negotiating with the same company to build the remainder of the road.

The China Exim Bank-funded project is stalled at a mere 36.38 per cent physical progress since construction started in September 2020. Recent delays were largely attributed to Sri Lanka’s economic crisis, which caused the suspension of loan disbursements from the Exim Bank and a lengthy debt restructuring process.

The Sri Lanka Government and the EXIM Bank of China entered into a preferential buyer’s credit agreement as early as March 2019 to finance CEP 1. An amendment to that contract was signed in June 2024 under Sri Lanka’s external debt restructuring process.

In April this year, Sri Lanka’s Finance, Planning and Economic Development Ministry—which comes under President Dissanayake—communicated to China EXIM the Government’s willingness to continue CEP 1 with EXIM Bank financing. EXIM requested a change in currency. Discussions were subsequently held regarding the loan currency and amount, interest rate, etc., and agreement was reached on an interest rate cap and floor of 2.5% to 3.5%.

The original EXIM Bank concessional loan was US$989 million, of which just US$51.5 million was disbursed before its suspension. While the remainder is US$938 million, EXIM, post-debt restructuring, has now only committed to lending US$500 million in RMB. Consequently, the Sri Lanka Government has undertaken to fork out the remaining US$438 million.

With the continuation of the contract, the Government must pay the contractor around US$200 million in claims and interest. A proposal by five of Sri Lanka’s largest construction companies to cancel the 2015-16 direct contract granted to MCC and to call for fresh, competitive, open tenders—on the basis that this proposition would cost the country far less and also lead to a speedier conclusion of the road—has been disregarded.

Hartal aimed at jolting govt. into addressing unresolved issues: Tamil political parties

Several Tamil political parties have planned to stage a hartal today (18) in the Northern and Eastern provinces demanding the repeal of the Prevention of Terrorism Act, holding provincial council elections, and resolving land disputes affecting the Tamil community.

Batticaloa District ITAK leader MP Shanakyan Rasamanickam told The Island that the hartal would be led by leaders of three Tamil and three Muslim parties, representing the region in Parliament.

Rasamanickam said that the protest aimed to present demands peacefully. He said that ordinary residents of the Northern and Eastern provinces faced numerous difficulties, including military control over lands, schools and all aspects of civilian life. The military’s agricultural activities had caused economic hardships to local residents, he said,

Rasamanickam also mentioned an incident on 7 August in the Muthu Ayankattu in Oddusuddan, Mullaitivu, where Edirmanasingam Kabilraj, a 32-year-old youth had died allegedly at the hands of the army.

Rasamanickam said that his party had formally raised the issues with President Anura Kumara Dissanayake and is calling for solutions through the hartal. He said that although talks had been held with the President in December last year regarding disaster situations, follow-up discussions on the Tamil community’s broader grievances have not been held.

Upcountry People’s Front Leader V Radha Krishnan said that the hartal would cripple all administrative and commercial activities in the Northern and Eastern provinces, with full cooperation from local trade union leaders. Many Tamil party leaders have publicly extended support for the protest.

Radha Krishnan said that the Ceylon Workers Congress had pledged to back the hartal, stressing that without local support, resolving these issues would be difficult.

The SLMC has also announced its support for the hartal. In a statement, the SLMC condemned the killing of Kabilraj in Mullaitivu. “This brutal act is yet another reminder of the deep crisis of law and order within the very forces that are tasked with protecting the public.”

Kabilraj’s body was recovered from the Muttaiyankattu Tank on 9 August, two days after he and four others had reportedly been summoned to a nearby army camp and assaulted.The SLMC further charged that the government’s failure to hold members of the armed forces accountable for such incidents has eroded public trust and endangered the safety of civilians.

by Chaminda Silva and Samanthi Weerasekera ✍️

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US combat ship to arrive in Colombo after visits of Indian navy tanker, destroyer

Sri Lanka will see the visit of the Independence-variant littoral combat ship USS Santa Barbara (LCS 32) to the Port of Colombo this weekend over a port call, the US Embassy in Colombo said days after the visit of Indian Navy’s INS Jyoti (Fleet Tanker) and INS Rana (Destroyer) earlier this week.

India and the United States have increased the frequency of their naval ship visits to Sri Lanka as part of a broader strategic response to growing Chinese influence in the island nation’s ports and economy.

The US Embassy in Colombo said the visit of Santa Barbara was underscoring the strength of the US–Sri Lanka partnership and our shared commitment to a secure, prosperous, and free Indo-Pacific.

“It also reflects the longstanding ties between our navies and the close cooperation that defines our relationship. Colombo will serve as a brief stop for the ship to take on fuel and supplies before continuing its mission,” the US Embassy said in its statement.

The USS Santa Barbara is a part of the US 7th Fleet which commands the world’s largest forward-deployed fleet with the primary mission of providing operational control and planning for its forces in the Western Pacific and Indian Oceans, while promoting regional stability and maritime security through engagements with allies and partners, it said.

“The arrival of the USS Santa Barbara to Sri Lanka is a powerful symbol of the US–Sri Lanka partnership in action. As part of the US 7th Fleet—the Navy’s largest forward-deployed fleet—this visit reflects our shared commitment to maritime security, regional stability, and a free and open Indo-Pacific,” US Ambassador to Sri Lanka Julie Chung was quoted as saying.

“We’re proud to stand alongside Sri Lanka as we work together to promote peace and prosperity across the region.”

The USS Santa Barbara is an Independence-variant Littoral Combat Ship designed to operate in near-shore environments and support forward presence, maritime security, sea control, and deterrence missions.

The Santa Barbara conducts regular Indo-Pacific patrols to deter aggression, strengthen alliances and partnerships, and advance future war fighting capabilities, the US Embassy said.

The Santa Barbara’s visit comes while this Indian Navy’s INS Jyoti (Fleet Tanker) and INS Rana (Destroyer) are in Sri Lanka for the 12th Edition of annual Indian Navy (IN) – Sri Lanka Navy (SLN) bilateral maritime exercise SLINEX-2025.

SLINEX-2025 has been aimed at enhancing inter-operability, improve mutual understanding and exchange best practices/ procedures in multi-faceted Maritime operations between both Navies.

Over the past decade, China has made significant inroads into Sri Lanka through major infrastructure investments, most notably the controversial 99-year lease of the Hambantota Port and large-scale loans for projects under the Belt and Road Initiative (BRI).

These developments have raised alarm in New Delhi and Washington, both of which view Sri Lanka as a key node in the Indian Ocean’s maritime security architecture.

Frequent naval engagements, joint exercises, and port calls by Indian and US vessels are seen as efforts to reaffirm military ties, maintain strategic balance, and ensure freedom of navigation in the region, security experts say.

By strengthening defence cooperation with Colombo, India and the US aim to counterbalance China’s expanding footprint and keep vital sea lanes secure from potential geopolitical coercion, they say.

Sri Lanka Muslim Congress backs ITAK hartal

The Sri Lanka Muslim Congress (SLMC) declared its support for the hartal organised by the Illankai Tamil Arasu Katchi (ITAK) in the Northern and Eastern Provinces on Monday (18), in protest over the alleged killing of a man by Sri Lanka Army personnel.

In a statement, the SLMC condemned the incident, expressing outrage over the killing of 32-year-old Edirmanasingam Kabilraj in Mullaitivu.

The party said, “This brutal act is yet another reminder of the deep crisis of law and order within the very forces that are tasked with protecting the public.”

Kabilraj’s body was recovered from the Muttaiyankattu Tank on August 9, two days after he and four others had reportedly been summoned to a nearby army camp and assaulted.

The SLMC further charged that the government’s failure to hold members of the armed forces accountable for such incidents has eroded public trust and endangered the safety of civilians.

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US envoy urges Sri Lanka to cut non-tariff barriers to boost trade

Sri Lanka should enhance trade facilitation and create a more conducive business environment by reducing non-tariff barriers, US Ambassador Julie Chung said.

She urged Sri Lanka to “seize this window of opportunity by enhancing trade facilitation and creating a more conducive environment, including reducing non-tariff barriers, enhancing openness, and improving competitiveness.”

The US envoy made this comment when she met Ceylon Chamber of Commerce officials to discuss trade, investment, and economic opportunities between Sri Lanka and the United States, a statement from the chamber said.

Ambassador Chung met with Chairman Krishan Balendra, Vice Chairman Bingumal Thewarathanthri, Deputy Vice Chairman Vinod Hirdaramani, Secretary General and CEO Buwanekabahu Perera and other representatives of the Ceylon Chamber to discuss trade, investment, and economic opportunities between Sri Lanka and the United States.

Ambassador Chung extended her congratulations to Mr. Krishan Balendra on his appointment as Chairman of the Ceylon Chamber, and the U.S. Embassy’s interest in continuing and strengthening engagement with the Ceylon Chamber of Commerce, given its position as the premier and most influential representative of the private sector.

She also commended the Sri Lankan Government for its collaborative and constructive negotiation with the United States to achieve a fair, balanced, and reciprocal trade relationship.

The discussion highlighted Sri Lanka’s regional trade position and the potential to attract increased U.S. business interest following recent changes in global trade positions. Ambassador Chung emphasised that many U.S. companies are increasingly considering South Asia, with Sri Lanka emerging as a top option, the statement added.

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Sri Lanka: Tamils hope for foreign help as mass graves open -DW.com

Every time a mass grave is excavated in Sri Lanka, Thambirasa Selvarani can’t sleep.

“We don’t know what happened to our relatives, and when they start digging, I feel panicked,” Selvarani told DW.

The 54-year-old has been searching for her husband, Muthulingam Gnanaselvam, since he disappeared in May 2009 after he surrendered to government forces at the end of the Sri Lankan civil war. After decades of fighting, the conflict ended with the defeat of the Liberation Tigers of Tamil Eelam (LTTE),also known as the Tamil Tigers.

Multiple mass graves have been uncovered since then. For the last three months, archaeologists have been excavating a mass grave in Chemmani, on the outskirts of Jaffna, the capital of Sri Lanka’s Northern Province. The excavation has unearthed 140 skeletons so far, including children.

Victims ‘heaped together’ in a shallow grave

Chemmani has been suspected as a mass grave site since at least 1998. A former army corporal, who at the time was on trial for the rape and murder of schoolgirl Krishanthi Kumaraswamy, said there were hundreds of other bodies buried in the area alongside the young girl.

Lawyer V. S. Niranchan told DW he was working with families whose relatives had disappeared from the area surrounding Chemmani in the 1990s.

So far, the excavations have shown that bodies were buried “haphazardly, without any legal barriers, heaped together in a shallow, unmarked” fashion.

“We think some of them could have been buried alive,” he said, adding, “if they were already dead, the bodies wouldn’t be bent,” with some of them displaying twisted limbs.

Several artifacts have been discovered at the site along with the skeletons, including slippers, a baby’s milk bottle, and a child’s school bag.

Opening old wounds

Anushani Alagarajah, executive director of the Jaffna-based Adayaalam Centre for Policy Research, said Chemmani had a “very painful, very traumatic history, particularly with people in Jaffna.”

“A lot of our friends’ brothers and fathers and sisters disappeared at the time,” Alagarajah told DW. “It’s been over 25 years. It’s opening up very old, deep wounds, not just for the families, but for the whole community, the whole of Jaffna. And it’s a reminder that you can’t really forget.”

The Chemmani excavation has become the most high-profile instance of a mass grave investigation in Sri Lanka to date.

It has also triggered numerous calls for international oversight, especially from the country’s Tamil community.

Visiting the site in June, the UN High Commissioner for Human Rights Volker Türk noted that “Sri Lanka has struggled to move forward with domestic accountability mechanisms that are credible and have the trust and confidence of victims. This is why Sri Lankans have looked outside for justice, through assistance at the international level.”

‘We don’t know who they’re going to find next’

Tamil activists held a protest to coincide with Türk’s visit. Thambirasa Selvarani attended the event and met Türk personally, telling him she had no faith in Sri Lankan justice mechanisms.

Selvarani is the chairperson for the Association of Relatives of Enforced Disappearances (ARED) in Ampara District. She wants mass graves in her district to also be excavated.

“We feel scared. We don’t know who they’re going to find next, who they’re going to identify next,” Selvarani told DW. “I keep thinking about it day and night and I can’t sleep, I can’t eat. I feel so disturbed.”

“For the last 17 years, as presidents keep changing, we’ve been asking them to tell us the truth about what happened to our children and loved ones,” Selvarani said.

The progress, however, has been slow. Selvarani says she still faces intimidation by officers from Sri Lanka’s Criminal Investigation Department (CID) when attending protests.

“They say, ‘You shouldn’t go there, your relatives are dead, why are you still going here and there?'” Selvarani told DW.

New government, old problems

In a break from Sri Lanka’s usual dynasty politics, the country elected leftist president Anura Kumara Dissanayake in September 2024. But lawyer Niranchan remains suspicious, saying “history has shown” that governments could not be trusted and would object to international oversight.

“This government doesn’t understand ethnic problems,” he told DW. “They think that the country will be peaceful if we stop corruption. But they don’t understand that ethnic problems are also a reason that this country has fallen into debt.”

Ambika Satkunanathan, a human rights lawyer and former commissioner of the National Human Rights Commission of Sri Lanka, shares his distrust.

“Historically, pretty much nearly every Sri Lankan government has been extremely reluctant to obtain international assistance in different accountability processes,” she said.

Before coming to power, President Dissanayake said he would not seek to prosecute those responsible for war crimes. Talking to DW, Satkunanathan highlighted the lack of trust that victims have that the state is committed to pursuing justice.

In Sri Lanka, hope is ‘dangerous’
Last month, human rights NGO International Committee of Jurists (ICJ) called for “international oversight and victim-centred investigation” to take place “in compliance with international law and standards” in Sri Lanka.

But Alagarajah from the Adayaalam Centre for Policy Research says she does not believe Dissanayake’s government would request international oversight. She also said she did not see “anything different” regarding Chemmani when compared to previous excavations.

Alagarajah said she had met with families who believed they would find their children in Chemmani and who “want to believe that this process is going to give them some answers,” but that the hope for answers was also “dangerous.”

“Hope is not always the best thing to have, because it can also deeply disappoint you and hurt you, particularly in this country,” Alagarajah said.

Edited by: Darko Janjevic

UN Urges SL to Seize ‘Historic Opportunity’ for Justice, Reconciliation and Reform

The UN Human Rights Office has called on Sri Lanka to take decisive steps to break from decades of entrenched impunity, deliver long-overdue justice, and implement transformative reforms to address serious human rights violations, including crimes committed during the country’s civil war.

In a report released today, UN High Commissioner for Human Rights Volker Türk urged the Government to develop a comprehensive roadmap to translate its recent pledges on justice, rule of law, and national unity into tangible results.

“Today, an opportunity presents itself for Sri Lanka to break from the past… It now needs a comprehensive roadmap to translate these commitments into results,” Türk said, stressing the need for a formal acknowledgment of violations and crimes committed by both State forces and non-state armed groups such as the LTTE. He emphasised that the pain of victims remains “palpable” and their demands for truth and justice must be met.

The report follows Türk’s recent visit to Sri Lanka, where he met with Government officials, civil society, victims’ groups, and community leaders, and travelled to Trincomalee, Jaffna and Kandy. It calls for sweeping structural reform of the security sector and broader constitutional, legal, and institutional changes in line with the country’s international human rights obligations.

Key recommendations include the creation of a dedicated judicial mechanism with an independent special counsel to address grave rights violations, the release of military-occupied land in the north and east, the repeal of the Prevention of Terrorism Act (PTA), and the release of long-term PTA prisoners.

While welcoming the Government’s plans to establish an independent Public Prosecutors office, the report raises concern over continued harassment of civil society activists, ongoing surveillance of families of the disappeared, and persistent use of the PTA despite pledges to repeal it. It also urges the amendment or repeal of other laws that restrict fundamental freedoms, including the Online Safety Act, the ICCPR Act, the draft NGO Bill, and the draft Personal Data Protection Act.

The report further highlights the economic crisis’s disproportionate impact on vulnerable communities, particularly the Malaiyahar Tamil community in the plantation sector. Türk urged international financial institutions and creditors to give Sri Lanka the fiscal space to protect social and economic rights, warning that austerity measures must not undermine human rights obligations.

The UN Human Rights Office reaffirmed its commitment to supporting Sri Lanka in advancing accountability, reconciliation, and human rights, while also urging the international community to complement domestic efforts with international accountability measures.

Sri Lanka pauses 2 Mannar Wind Power Plant projects to address concerns

President Anura Kumara Dissanayake has ordered the temporary suspension of two proposed wind power plants in the Mannar area a 20 MW facility and a 50 MW project despite tenders being called and contracts already awarded.

The decision was made yesterday during a meeting at the Presidential Secretariat on the proposed wind power projects and issues raised by local communities. The discussion focused on the country’s energy needs, the economic importance of renewable projects, and the grievances of residents in Mannar.

The President emphasised that energy is a national resource tied to domestic electricity costs, industrial competitiveness, foreign investment, and overall economic growth. He stressed that while development is essential to strengthen the economy, it must be carried out with consensus and solutions to address local concerns.

Religious leaders and residents from Mannar raised objections, citing environmental damage, livelihood disruptions, and non-implementation of environmental recommendations linked to both the wind farm and an ilmenite project in the area. In response, the President announced a one-month suspension to investigate these issues and provide prompt solutions.

It was noted that electricity from the project could be produced at 4.65 US cents per unit (around Rs. 13), significantly lower than the 8.26 US cents (Rs. 25) per unit proposed for purchase from Adani Company, aligning with the government’s aim to keep average generation costs at Rs. 13 per unit.

The meeting also addressed related infrastructure needs, with the President confirming budgetary allocations for the Kokilai Bridge reconstruction and the Mannar New Water Project.

Energy Minister Kumara Jayakody said the Land Reclamation Department will prepare a report on possible flooding due to the wind power plant. Additionally, several state agencies, including the Department of Wildlife and the Ministry of Lands, will jointly report on land issues in the Northern Province.

The discussion was attended by Northern Province religious leaders, parliamentarians from both government and opposition, Energy Minister Kumara Jayakody, Deputy Minister of Cooperative Development Upali Samarasinghe, Secretary to the Ministry of Energy Professor Udayanga Hemapala, government officials, and members of the Mannar Citizens’ Committee.

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Sri Lanka 2032 bond bids rejected, 2035 bonds undersold

Sri Lanka’s bond auction on August 12, 2025 sent a stark warning to policymakers: despite macroeconomic stabilisation under IMF reforms as deep-seated investor skepticism remains.

The Central Bank of Sri Lanka (CBSL) sought to raise LKR 65 billion through bonds maturing in 2032 and 2035, but the market delivered a brutal verdict – zero uptake for the 2032 bond and tepid demand for the 2035 issue, leaving the auction LKR 46.5 billion short of its target.

Here is a summary of the bond market operations.

2032 Bond (8% coupon): Fully rejected, signaling investors see the return as inadequate for Sri Lanka’s lingering default risks and inflation.

2035 Bond (10.7% coupon): Only 74% of target met, underscoring persistent doubts over long-term debt sustainability, policy clarity and economic reforms.

“The bond market is flashing red,” a debt market analyst told the Island Financial Review on condition of anonymity. “Investors are saying, ‘Show us real progress on debt restructuring and economic reforms before we commit.”

“While short-term bonds (2027-2029) traded at 8.50%-9.39%, yields on longer-dated debt (2030-2032) climbed to 9.45%-10.25% which was a clear risk premium. Overnight liquidity also tightened to LKR 97.89 billion, hinting at growing caution. The rupee inched up to LKR 300.67/USD. Yet, traders appear to think that stability is fragile. In this context, if bond auctions keep failing, pressure on the currency will return,” he cautioned.

When asked what could be done to make the bond market more attractive for investors, he replied, “The Central Bank may be forced to sweeten terms, risking a reversal of recent rate cuts which will push borrowing costs higher though. Sri Lanka’s economy is stabilising, but the bond market’s cold shoulder reveals a harsh truth – investors still don’t trust the recovery. Without faster debt solutions and critical economic reforms, the Central Bank’s Road ahead would just get rougher,” he opined.