Category: News

Sri Lanka is mulling measures to lure back Chinese tourists in a bid to alleviate an unprecedented debt crisis, its tourism minister said, as the South Asian nation tries to stabilize the economy.

The country is targeting half a million Chinese tourists in 2024, nearly double its pre-Covid visitor levels, Tourism Minister Harin Fernando said at a press briefing in Beijing on Monday.

If each Chinese tourist spent $5,000 that could raise a figure comparable to the recent International Monetary Fund bailout, he said. “If you really look at it, tourism can get Sri Lanka out of this mess,” the minister added.

Sri Lanka clinched a $3 billion bailout loan from the IMF in March after six months of negotiations. It is still trying to reach a debt restructuring agreement that would help the release of the next round of funds. China has been an observer to those talks.

Paris Club members account for $4.8 billion, or more than 10% of Sri Lanka’s external debt, according to IMF data. That’s slightly higher than China, which stands at $4.5 billion, while India is owed $1.8 billion. Palitha Kohona, Sri Lanka’s ambassador to China, who was also at the event in Beijing, said bilateral debt talks were ongoing.

Fernando said he’d presented a plan to Sri Lanka’s government that included free tourist visas for Chinese travelers until November. “They can just walk into Sri Lanka with a Chinese passport,” he said.

The minister also said he was holding talks with Chinese carriers, including China Southern Airlines and Air China, asking them to increase the number of flights to Sri Lanka. This month, carriers are operating 92 flights between the two countries, down from 174 in the same month in 2019, according to flight data provider Cirium.

Sri Lanka has battled its worst economic problems since independence in recent years, after protests over soaring inflation, food shortages and lengthy power cuts toppled the government. A series of deadly terror blasts in 2019 also hit tourism arrivals, along with the subsequent Covid pandemic.

Before all that, Sri Lanka saw some 266,000 Chinese arrivals in 2018, according to the Sri Lanka Tourism Development Authority. That fell sharply to 167,863 the following year, according to the authority.

The return of Chinese tourists is considered essential to the rebound of global tourism, but outbound travel is still lagging pre-pandemic levels. More than half of Chinese travelers said they hadn’t set plans to go abroad this year in a survey published last month.

A Chinese national suspected of having used a forged passport in an attempt to enter Sri Lanka was set to be deported, and reports suggest that he was later allowed to enter the country via the Katunayake Airport.

On the 18th of May 2023, two Chinese nationals and an Egyptian had arrived in Sri Lanka from Dubai and one of the Chinese men had produced a Guinea passport at the Katunayake Airport.

Immigration and Emigration officers at the BIA had denied entry to the Chinese national upon deciding that the passport he produced was forged.

News 1st’s Airport Correspondent said that thereafter, the Chinese national and his colleagues had behaved in an unruly manner.

It was then that State Minister Arundhika Fernando had intervened with the incident.

On the 19th of May 2023, the State Minister had addressed a letter to the Controller General of Immigration and Emigration informing that the Chinese national had arrived in Sri Lanka to discuss a housing project that will be launched under his ministry.

The State Minister had requested that the Chinese man be allowed to enter Sri Lanka upon considering his Chinese passport.

“The Chinese company based in Sri Lanka said that he is a genuine person, and he possesses a Chinese passport. They said that they will be responsible with regard to any punishment imposed on him, or on the decision to deport him. Therefore, I spoke to the Controller of Immigration and Emigration. I asked if it is possible to allow him to enter the country, using the Chinese passport. I addressed the letter on his advice and I did not influence him in any way,” exlained the State Minister.

The Department of Immigration and Emigration comes under the Ministry of Public Security, and the matter was raised with Minister Tiran Alles.

He said that he had have given instructions to “take him (Chinese national) in first and then check with the Chinese Embassy, get all the details and to take a decision.”

State Minister Arundika Fernando said that later was made aware that a Chinese national cannot use two passports.

The Department of Immigration and Emigration recorded a statement from the Chinese national in question and commenced an investigation.

In a significant move to address Sri Lanka’s fuel supply challenges, a contract agreement was signed with Sinopec, a leading international petroleum company. The agreement, signed today (22), marks a crucial step in ensuring a steady and uninterrupted fuel supply for the nation, the President’s Media Division (PMD) said.

The signing ceremony took place at the Presidential Secretariat, with representatives from both Sri Lanka and Sinopec in attendance.

Secretary of the Ministry of Power and Energy M.P.D.U.K. Mapa Pathirana and Chen Chengmin, Managing Director of Fuel Production and Marketing Department of Sinopec Company, signed the agreement in front of the President, it added.

On the Sri Lanka side, the Secretary of the Ministry of Power and Energy, the Chairman & Managing Director of the Ceylon Petroleum Corporation, and the Chairman of the Ceylon Petroleum Storage Terminals Limited participated. From Sinopec, representatives from Sinopec Fuel Oil Lanka (Private) Limited, Sinopec Fuel Oil Sales Co. Ltd (People’s Republic of China), and Sinopec Fuel Oil (Singapore) Pte. Ltd. were present to formalize the agreement.

In response to the on-going foreign exchange crisis in Sri Lanka, the Ministry of Power and Energy has taken this decisive action to ensure an uninterrupted fuel supply to consumers. With the inability to provide sufficient foreign exchange for fuel shipments, the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) faced significant challenges, according to the PMD.

To tackle this issue, the Ministry explored various strategies and one of them involved inviting Expression of Interests (EOIs) from reputable petroleum companies established in producing countries. The goal was to import, store, distribute, and sell Petroleum Products in predetermined Distribution Dealer operated Networks in Sri Lanka. The Cabinet of Ministers approved this initiative.

One of the key requirements for new retail suppliers entering the market was their ability to secure forex requirements without depending on the domestic banking sector. It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation.

After receiving EOIs, the companies that were shortlisted were invited to submit detailed proposals in response to a Request for Proposal (RFP) document. The Cabinet Appointed Special Committee (CASC) and the Technical Evaluation Committee (TEC) thoroughly scrutinized the proposals and recommended awarding contracts to the following companies, subject to negotiations:

• M/s Sinopec Fuel Oil Lanka (Private) Limited, F5, Hambantota Maritime Center, Mirijjawila, Hambantota, Sri Lanka

• M/s United Petroleum Pty Ltd, 600 Glenferrie Rd, Hawthorn, Victoria 3122, Australia

• M/s RM Parks, 1061 N. Main St, Porterville, CA 93257, USA, in collaboration with Shell PLC

The Cabinet of Ministers, considering the recommendations made by the CASC and the Committee Appointed by the Cabinet, granted approval to award the contracts to the selected suppliers.

Sinopec, along with its affiliated companies, is set to commence operations in Sri Lanka within 45 days following the issuance of the license. This development brings hope for a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers.

Minister of Power and Energy Kanchana Wijesekera, State Ministers D.V. Chanaka, Indika Anuruddha, Shehan Semasingha, President’s Senior Advisor on National Security and Chief of Staff Sagala Ratnayake, President’s Secretary Saman Ekanayake, Central Bank Governor Dr. Nandalal Weerasinghe, Chinese Ambassador Qi Zhenhong and representatives of Sinopec Oil Lanka Pvt. Ltd, Sinopec China Pvt Ltd and Sinopec Singapore Pvt Ltd were present on this occasion, according to the PMD.

The deal with Sinopec– a state-owned Chinese company –was reached months after the two sides commenced their negotiations and Sri Lanka approved a proposal in March to liberalise the fuel retail marketing in the country with more players from China, Australia and the US.

Sri Lanka’s fuel retail market was a state monopoly under the Ceylon Petroleum Corporation (CPC) until 2003 when the Indian Oil Company (IOC) was allowed to operate.

“Negotiations have been completed with Sinopec Fuel Oil Lanka Ltd and its parent company in China and Singapore for a long-term contract on important storage, distribution and sale of petroleum products in the island nation,” the statement issued by the president’s office said.

In March, the Cabinet of Ministers had granted approval to award licenses to China’s Sinopec, Australia’s United Petroleum and RM Parks of the USA, in collaboration with multinational oil and gas company – Shell plc, to enter the fuel retail market in Sri Lanka.

Thereby, they are be granted a license to operate for 20 years to import, store, distribute and sell petroleum products in Sri Lanka.

In June 2022, the Cabinet of Ministers had green-lighted the proposal to open up Sri Lanka’s fuel import and retail sales market to companies from oil-producing nations.

In October the same year, the Petroleum Products (Special Provisions) Bill, paving the way for new suppliers to enter as importers, distributors and retail operators for petroleum products, was approved by the Ministerial Consultative Committee on Power and Energy.

Later on April 26, a team of officials from Sinopec visited Sri Lanka in order to finalise the agreements and commencement of operations for retail fuel sales, and accordingly, the timeline, conditions of the relevant agreement and other concerns were discussed between the team of officials and technical experts from the Chines energy giant and the Minister of Power and Energy, Kanchana Wijesekera.

It had been decided that the agreements would be signed in mid-May, and that operation would commence 45 days thereon.

Also, the US-based oil company RM Parks Inc. and the British multinational oil and gas company Shell PLC had held discussions with Minister Wijesekera on commencing retail fuel sales in Sri Lanka in the first week of June this year.

Wijesekera, joining the political talk show “360°” on TV Derana earlier in April, revealed that each company will handle 150 CPC dealer-operated filling stations in the local market.

At present, a total of 1,142 filling stations are under the purview of the CPC, however, the corporation fully owns only 234 of them, the minister explained, adding that 450 out of the remaining 908 filling stations owned by private distributors would be allocated to the three foreign oil companies.

Former Army Commander General Shavendra Silva through his lawyer today informed Court of Appeal that he is disputing the findings of Karannagoda Committee appointed to inquire into incident of violence following the Galle Face attacks on May 9, 2022.

President’s Counsel Faisz Mustapha appearing for General Shavendra Silva told court that his client is disputing the findings of Karannagoda Committee on both factual and legal aspects.

He contended that Karannagoda Committee is not a committee that has been appointed under any provision of the law.

Mustapha said it was a committee appointed by former President just to report to him and reiterated that he is not accepting the validity of the inquiry.

Faisz Mustapha PC further raised objections for conducting a fresh inquiry relying upon the findings of the Karannagoda Committee.

He alleged that Karannagoda Committee report had been released to the media with the motive of tarnishing the reputation of his client based on unfound allegations.

He raised objections for the withdrawal of the application if it is based on the findings of the Karannagoda Committee report. President’s Counsel Sanjeeva Jayawardena appearing for the petitioners including several Ministers and parliamentarians submitted that no point whatsoever had Mustapha PC’s client challenged the board of inquiry report of the military leaders and that in any event, that would not be final and conclusive, as the Minister has now undertaken to additionally conduct a full investigation in terms of the Law and as such, any persons involved in the conspiracy that took place, would be revealed finally at such proposed investigation.

Jayawardena further said there is no case of filing objections as this was a crucial matter as several official governmental institutions and installations were attacked and overrun.

He further said that there was even a physical threat to the security of Parliament itself and therefore, that the masterminds behind these attacks must be duly investigated.

Both parties made these remarks when the writ petition filed by 22 government Parliamentarians representing SLPP and several others was came up before Court of Appeal.

President’s Counsel Faisz Mustapha with Kuvera de Zoysa PC with Counsel Faisza Mustapha Marka and Sharafi Mohideen appeared for General Shavendra Silva. President’s Counsel Sanjeeva Jayawardena with counsel Rukshan Senadheera appeared for the petitioners.

The US is not keen to pursue a new iteration of the Status of Forces Agreement (SOFA) with Sri Lanka at present, visiting US Bureau of South and Central Asian Affairs Deputy Assistant Secretary (DAS) Afreen Akhter told The Sunday Morning last week.

Responding to a question, Akhter said that entering into a SOFA with Sri Lanka was not being considered by the US at present. “I don’t think that is something we are considering at the moment,” Akhter said.

The attempt to negotiate the bilateral SOFA between both countries caused much controversy in 2019, after part of its content was leaked to the local press.

However, the visiting DAS stressed that the US continued to work closely with Sri Lanka, especially on maritime security, and highlighted the gifting of the third decommissioned ex-US Coast Guard cutter to the Sri Lanka Navy.

Akhter also said that a specialised maritime patrol aircraft, which is to be gifted to Sri Lanka by the US, was expected to arrive in the island next year.

“We are really focused on building Sri Lanka’s maritime security capability through the gifting of the coast guard cutter, the King Air aircraft which will come next year, and through specialised training and other platforms and systems,” Akhter stated.

She added that the US considered Sri Lanka a valuable partner in the Indo-Pacific region.