Establishment of SAARC Industrial Zone proposed

The Sri Lankan Government has proposed establishment of SAARC Industrial Zone to promote trade and industrial activities in the South Asian region.

According to a press release by Saarc Chamber of Commerce and Industry (SCCI) here on Friday, President SCCI, Tariq Sayeed informed that proposal, conveyed through Nawaz Rajabddin, Vice President SAAC CCI (Sri Lanka ), was given by Professor G L Pieris, Minister of Export Development and International Trade, Sri Lanka.

It may be recalled that SCCI President is visiting Sri Lanka to explore ways and opportunities for enhancing bilateral trade volume between the two SAARC countries.

The idea of setting up of Industrial Zone is aimed at providing facilitation to the business community of the region to stimulate regional economic cooperation, the press release said adding that the industrial units to be installed in the proposed zone would be given facilities similar to those provided in Export processing Zones.

Responding to the proposal, President SCCI appreciated the idea, saying that such initiatives would help promote intra-regional trade and industrial activities.

He said that the other countries of the region should also establish similar Industrial Zones, which would prompt commercial activities in the region and eventually help achieving objectives of SAFTA.

“Since the issue is of great significance, it would be discussed in the forthcoming meeting of SCCI Executive Committee Meeting” said President SCCI.

He said that efforts would be made persistently to convince the respective Governments of SAARC to establish such industrial zones so that the perceived objectives of economic integration of SAARC are achieved.

Lankan drivers latest recruits by RTA in UAE

DUBAI - Sri Lankan taxi and bus drivers are the recent recruits in the UAE. For the first time, over 500 drivers have been recruited to work in Dubai with the help of the Sri Lankan diplomatic mission in the emirate.

The move is part of the Sri Lankan Ministry of Foreign Employment Promotion and Welfare's efforts to send skilled workers abroad as well as to balance their skewed migrant ratio, with female migrants outnumbering their male counterparts traditionally.

The Country Coordinator of the Sri Lankan Bureau of Foreign Employment at the Sri Lankan consulate in Dubai, S.A Zain, said that over 300 taxi drivers and 200 bus drivers have been recruited by the Roads and Transport Authority (RTA).

"This is the first time that such a large number of male skilled workers have been recruited from Sri Lanka. This is in line with our efforts to move away from unskilled to skilled labour force. These drivers have been recruited after being interviewed by RTA officials," he added.

Their employment contracts are under process and they will start work as soon as the formalities are complete, Zain said, adding that the consulate was keen on bringing in more male professionals to the UAE.

Sri Lankan Consul-General Wasantha Senanayake said the government was also keen on bringing in male nurses, hospital attendants and service staff from the hospitality industry.

"We have started implementing changes to the curricula in hotel management colleges to tailor to the needs of hotels in the UAE. Now, short courses are being introduced to train them to become bartenders, guest relations officers and pool attendants," said Senanayake.

Dr. Kotelawala contradicts CB Governor

Chairman Ceylinco Consolidated Lalith Kotelawala has strongly disputed a statement attributed to Ajith Nivrad Cabraal, Governor of the Central Bank, reported in a daily newspaper yesterday . Referring to the news item headlined Sri Lanka Economy on a Shaky Platform,’ Kotelawala said, "What a shocking statement by the Governor of the Central Bank of Sri Lanka Mr Ajith Nivrad Cabraal! First, he says that Sri Lanka’s economy is on a shaky platform. Secondly, he says that the action taken by the country against terrorism is destabilizing the economy. Thirdly, he says, if the situation is not resolved, Sri Lanka’s economy will be burdened with a war for another 30 years, which is directly contradictory to the views of the President and the Secretary of Defence."

He added, "I certainly do not agree with Mr. Cabraal. As expressed by me on several occasions, the President’s vision of ‘Mahinda Chintanaya’ will bring in new prosperity and economic freedom, if properly implemented."

Fitch On People's Leasing's Proposed Debenture

Fitch Ratings-Colombo/Mumbai/Singapore-03 July 2008: Fitch Ratings Lanka has today assigned a 'BBB+(lka)' National Long-term rating to Sri Lanka-based People's Leasing Company Limited's (PLC) proposed subordinated, unsecured, redeemable (five-year), listed debenture issue of up to LKR1 billion. At the same time, the agency has affirmed PLC's National Long-term rating of 'A-(lka)' (A minus (lka)). The Outlook is Stable.
The issue rating takes into account that the proposed debenture will rank as subordinated to PLC's existing senior debt. PLC's rating reflects its good financial profile, and People's Bank's (Sri Lanka) (PB, 'A-(lka)' (A minus(lka)) / Outlook Positive) 100%-ownership of its equity. PLC benefits from PB's strong brand franchise, and operational and funding support. PLC's rating is constrained by the market risk and limited funding diversity inherent in the specialised leasing company (SLC) sector.
Around 81% of PLC's loan growth during FY08 was funded by way of local institutional borrowings, with equity funding accounting for the remaining 19%. Lenders to the SLC sector have increasingly preferred shorter-term investment instruments during FY08, given the prevalent volatile interest rate environment. As such, PLC has increased issuances of commercial paper and promissory notes to fund its operations, progressively shifting the maturity profile of its borrowings towards the shorter term. Commercial paper and promissory notes in aggregate accounted for 35% of PLC's borrowings at FYE08 compared to 25% at FYE07. Long-term debt issues, such as the one proposed, should help PLC lengthen its funding maturities.
PLC's profitability, although strong compared to industry peers, fell during FY08 due to tightening interest margins and increasing inflationary cost pressures. Fitch expects PLC's profitability to be constrained over the short- to-medium term given the weak economic environment. PLC's gross NPL ratio ( measured by Fitch as loans in arrears for over three months) increased to 11.6% at FYE08 from 7.3% at FYE07 despite loan growth during the period. However PLC's recoveries have been good thus far, with most of its NPLs being regularised before they reach the six-months-in-arrears category (which is the regulatory threshold for the classification of NPLs for non-bank financial institutions), where it posted a NPL ratio of 1.8% at FYE08.
Established in 1996, PLC is a wholly-owned subsidiary of People's Bank, and enjoys a market share of around 10% of the leasing industry.
People's Bank owns 1.78% of the shares in Fitch Ratings Lanka Limited. No shareholder, other than Fitch Ratings Limited of the UK, is involved in the day- to-day operations of, or credit rating reviews undertaken by Fitch Ratings Lanka Limited.

Certain parties continue attempts to deprive Sri Lanka of the GSP Plus

Minister Professor G.L. Peiris says that certain parties continue attempts to remove Sri Lanka of the GSP Plus tax concession arranged by the European Union.
He said Sri Lanka has yet not applied for the extension of the system since no country can apply till the European Commission takes legal measures.
He also refuted statements that the government of France is against the Sri Lankan government. Mr.Peiris said that there is no basis for the rumours that western countries are against Sri Lanka.

EU receiving a large number of requests not to extend GSP+

The European Union has informed the Government that they have received a large number of requests from various groups and individuals asking them not to extend the GSP+ status for Sri Lanka. This came to light during a press briefing held by Minister G.L. Peiris.

President addresses UN-ECOSOC member states in New York

In an historic first for the Asian Institute of Technology, President Prof. Said Irandoust recently gave a speech on civil society engagement for sustainable development to member States attending the United Nations Economic and Social Council (UN-ECOSOC) 2008 General Debate meeting held from 30 June ─ 3 July, at UN Headquarters in New York.

Addressing the 54-member Council meeting on 1 July, held on the theme “Calls for Concrete Action to Address Problems Afflicting International System”, President Irandoust offered AIT as a success story in relation to ongoing sustainable development work in Asia.

President Irandoust, speaking on behalf of civil society members attending the session of the Conference of Non-Governmental Organizations in Consultative Relationship with the United Nations (CONGO), informed the member States’ representatives that AIT had received support rom the United Nations for a regional centre of excellence to focus on Millennium Development Goals 1, 3, 7 and 8 (poverty alleviation, gender equality, environmental sustainability, and global partnership for development).

He told the international body that on 25 March 2008 AIT was formally endorsed by United Nations Secretary-General, Ban Ki-moon as the site of the official ASEAN Centre of Excellence on Millennium Development Goals (MDGs), in partnership with the United Nations Institute for Training and Research (UNITAR), United Nations Department of Economic and Social Affairs (UNDESA), United Nations Development Programme (UNDP), and UN-ECOSOC. At the meeting, President Irandoust announced the Asian Institute of Technology’s plan to apply for membership to UN-ECOSOC, starting as an observer in July 2009.

By developing pedagogical modules, educational materials and tools for training of trainers for governments, academic and educational institutions, civil society, NGOs, and the private sector, the Centre in Thailand will serve as a regional nexus for promotion, education, and training on attaining the MDGs by the year 2015, President Irandoust told the high-level UN meeting.


The President added that through its support for sustainable development of the Asian region, AIT works closely with the public and private sector, with leading universities, and with many international institutions, to promote beneficial technological and socio-economic change. He also informed the United Nations body that AIT has established training and education centres in Vietnam and Indonesia, and plans to open additional centres in Pakistan, Sri Lanka, Nepal, India, China, and possibly Africa.

Founded by the member States of the South-East Asia Treaty Organization (SEATO) in 1959 to advance technological and socio-economic development in the Asian region through higher learning and capacity building programs, today AIT is a leading, independent postgraduate development institution promoting advanced technology, sustainable development and management.

Since its founding, AIT has produced 16,000 master and PhD-level graduates and more than 23,000 professionals through short courses, representing more than 80 counties.

New regulations for foreign fishing vessels

The Minister of Fisheries and Aquatic Resources Felix Perera has gazetted new regulations allowing foreign fishing vessels to berth at the ports and anchorages of the country and unload their catch, official sources said yesterday (2).
A special gazette notification 1555/13 of June 26 has promulgated the new regulations, the sources said.

Under the previous regulations foreign vessels fishing outside the territorial waters had to have Board of Investment approval and a licence from the Fisheries Department for the purpose to unload their haul in Sri Lanka. But as some persons were engaged in irregular practices the Fisheries Corporation was deprived of obtaining fish stocks from the foreign vessels. This affected the Corporation’s efforts to keep prices steady.

The middlemen engaged in buying fish were directly responsible for this state of affairs, the sources said.

Under the new regulations all foreign fishing vessels which discharge their stocks of fish at any fishery harbour, anchorage or commercial port have to obtain a permit and sell 25 per cent of their catch to the Fisheries Corporation. However, they are prohibited from catching fish within the territorial waters of Sri Lanka official sources said.

Tariq Sayeed to address Sri Lanka Economic Summit

Tariq Sayeed, President SAARC Chamber of Commerce and Industry (SAARC-CCI) will address Sri Lanka Economic Summit 2008 at Colombo on Thursday.
It is the foremost business summit organized by the Ceylon Chamber of Commerce in collaboration with the Board of Investment of Sri Lanka for the ninth year in succession since 2000, says a press release issued here.
The theme for this year’s summit is “Meeting Today’s Challenges for a Better Tomorrow” which will be addressed by an eminent panel of speakers of national and international repute. They will mainly speak on important economic issues pertaining to trade and investment.

SANASA modernizes parapet wall of JAYA SRI MAHA BODHI

First time in Sri Lanka’s bank history , SANASA Development Bank -Sri Lanka’s most popular rural bank which has over 800000 membership plans to modernize the ancient stone parapet wall of the Jaya Siri Maha Bodhiya , Anuradhapura which was erected during King Devanam Piyatissa [205-210 B.C.] .
Chairman of the SANASA bank Dr.P.A.Kirivandeniya says the bank plans to raise funds through the public and hope to complete the entire modernization project within six months.
Addressing a media briefing in Colombo Dr.Kirivandeniya said the total cost would be Rs. 25 million and the bank has issued Rs.10 Million worth tickets.
“Public could purchase these tickets through the SANASA banks and SANASA Societies and help our national effort, Dr.Kirivandeniya said.
Department of Archeology has given its approval to the modernization project and a number of state agencies would assist to renovate the parapet wall.
Replying questions raised by media he said SANASA bank has already assisted Seruwavila Temple and placed Buddhist statutes.
“Our plan is to assist nationally recognized religious places, he said.
Jaya Siri Maha Bodhi Trust and the SANASA bank manage the proposed modernization activities and the bank requests more public donations to complete the task.

Government plans to strengthen CAA

Local trade Minister of Trade Bandula Gunawardena said measures have been taken to further strengthen the consumer protection authority act of the year 2003.
He points out this will help to grant justice to the consumer as well as to the business community.

The minister further said attention of the attorney general has been focused to further strengthen the act by giving authority to reduce the price of gas.

Minister Gunawardena requests the general public to report of any irregularities committed by traders to the consumer protection authority .

The minister said the government intervention regarding rice has enable to maintain the price of rice at a convenient level.

"We are determined to continue the efforts until the goal is achieved," President

"The endeavour and commitment of the government is to ensure the victory of the people regardless of any challenge," said President Rajapaksa said on Wednesday.

The President, speaking at the occasion of declaring opening the newly constructed bridge at Arugam Bay, said that the government has initiated massive development programmes while liberating people from the clutches of terrorists and that this development drive cannot be abandoned despite many conspiracies including attacks on journalists.

He was referring to an incident that occured yesterday when a journalist and his friend were attacked in Colombo. The President categorically stated that this was yet another attempt to tarnish the image of the country at a critical time in its history and roll back the victories in the battlefield.

Speaking further President said that despite the difficulties confronted along the way, the Government was determined to continue the efforts until the ultimate goal is achieved.

He said the Arugam Bay bridge was milestone of the Nagenahira Navodaya (Eastern Awakening) development programme and noted that this bridge will bring many benefits to the communities engaged in agriculture, fisheries and other industries.

While expressing gratitude to the US government President Rajapaksa pointed out that unity was essential in order to obtain the support of the international community and called upon everyone to set aside differences and join the common cause of ridding the country of terrorism and developing those areas that had already been liberated from the clutches of terrorists.

The state-of -the-art bridge constructed at a cost of US $ 10 million, will replace the old bridge over Arugam Bay which was severely damaged in the tsunami.

The United States Agency for International Development (USAID) provided financial assistance for the construction of the bridge which has been designed and built using US technology.

USAID completes State-of-the-art bridge over Arugam Bay

The United States Agency for International Development (USAID) marked the completion of its flagship tsunami reconstruction project – the new bridge across Arugam Bay – in the presence of President Mahinda Rajapaksa.

The $10 million bridge is a gift from the American people to the people of Sri Lanka, and will replace the original bridge that was destroyed by the 2004 tsunami. The state-of-the-art bridge has been constructed by USAID in partnership with the Road Development Authority under the aegis of the Ministry of Highways.

The design is a combination of steel and concrete, which made the bridge less expensive, faster to build, and more durable. This technology is often used in the United States, but has not previously been used in Sri Lanka. "For decades to come, this bridge over Arugam Bay will symbolize the commitment of the American people to help Sri Lanka rebuild and grow economically after the tsunami," U.S. Charge d’ Affairs James R. Moore said at the opening ceremony. "It will bear witness to our support for stability, democratic governance, economic growth and development in Sri Lanka’s Eastern Province."

USAID Mission Director Rebecca Cohn highlighted the community involvement in completing this project in her opening remarks, explaining that approximately 80% of the workforce was recruited from the local communities of Pottuvil, Arugam Bay and Panama, giving local citizens direct economic benefits from this project. In addition, numerous meetings with the people and community leaders in Pottuvil and Ulla were organized to discuss the bridge construction. "We are proud of the level of community involvement, which showed all of us that by working together, we could complete this very ambitious project," Ms Cohn said. She also expressed hope that the new bridge will help boost the local economy by providing easier access for tourists to the 64 hotels in the Arugam Bay area.

special programme to control the emission of green house gases

A special programme to control the emission of green house gases will be initiated in the mid of next month. Accordingly, control stations will be constructed in Kandy , Anuradapura and two prominent places in eastern and southern provinces.
Ministry of environment & natural resources say that the equipments for this purpose have been purchased for the cost of 8 billion rupees.
These centers will estimate the emission level polluting gases.
Indonesia extends full support to Sri Lankan government on the efforts taken bring peace to the country. The newly appointed Indonesian Ambassador Java Hussain said that his government is paying more attention to this matter.
Mr Hussain met Prime Minister Ratnasiri Wickramanayake to promote ties between two nations on several fields.
Premier Ratnasiri Wickramanayake explained the process of development activities and eradication of terrorism to the high Commisioner.

Sri Lanka's GDP Growth Slows as Prices Curb Spending

By Anusha Ondaatjie

(Bloomberg) --Sri Lanka's economic growth slowed for the first time in a year in the first quarter as inflation running above 25 percent and escalating violence in the South Asian island's civil war damped spending.

Gross domestic product expanded 6.2 percent in the three months ended March 31 from a year earlier, compared with 7.6 percent in the fourth quarter, the Department of Census & Statistics said today. That was less than the median forecast of 6.4 percent in a Bloomberg News survey of 10 economists.

Spending by consumers and companies is weakening as the central bank holds interest rates at a six-year high to cool the fastest inflation in at least four years. Sri Lanka's economic outlook ``depends critically'' on an end to the island's 25-year civil war, according to the International Monetary Fund.

``Growth is slowing due to the impacts of the worsening security situation on business confidence and high inflation increasing costs for companies,'' said Vajira Premawardhana, head of research at Lanka Orix Securities Pvt. in Colombo.

The yield on the 7.5 percent bond due in March 2009 fell about 5 basis points to 18.4 percent at 11:50 a.m. Colombo time, according to Ceylinco Shriram Securities Ltd. The rupee was little changed at 107.7 to the dollar, according to Hatton National Bank Ltd.

`Significantly Higher'

Consumer prices in the capital Colombo rose 26.2 percent in May from a year earlier, after increasing 25 percent in April, on higher food and energy costs. Annual inflation, or the 12- month moving average increase in prices, jumped to 19.8 percent in May.

Sri Lanka's 2008 inflation rate is likely to be ``significantly higher'' than previous estimates as oil reaches records, the central bank said on May 26.

Inflation may slow to 14 percent by the end of this year, central bank Deputy Governor W.A. Wijewardena said on May 15. The central bank said in January it was targeting annual inflation of about 10 percent for 2008.

Policy makers in Sri Lanka, who have kept the benchmark repurchase rate unchanged at 10.5 percent for 16 straight meetings, may need to consider increasing the proportion of deposits that commercial lenders must place with it or let the currency appreciate to cool runaway inflation, James McCormack, head of Asia-Pacific sovereign ratings at Fitch Ratings, said April 10.

Commodity Exports

Growth may slow to 5.8 percent this year amid central bank measures to cool inflation, according to Fitch.

Sri Lanka's economic growth is expected to accelerate this year as rising government spending and commodities exports counter weakening consumer demand, the central bank said on April 8. Gross domestic product may expand 7 percent, at the lower end of the range estimated in November, and up from 6.8 percent last year, the bank said in its annual report.

The government on Jan. 16 formally ended its 2002 cease-fire with the Liberation Tigers of Tamil Eelam, saying the rebels had used the accord to rearm and prepare for further attacks. Sri Lanka is seeking $1.8 billion in aid and investment to help rebuild the eastern province captured from the rebels in July.

Services, which represent about 60 percent of the economy, expanded 6.4 percent, down from 7.4 percent in the previous period, the statistics bureau said.

Industry, which accounts for 30 percent of the economy, expanded 6 percent from 8.5 percent in the fourth quarter. Farm output, about 10 percent of GDP, grew 5.9 percent from 6.7 percent previously.

Victoria's Secret

Sri Lanka, the world's fourth-biggest tea producer, has benefited from rising demand for commodities and food from emerging economies as sales to the U.S. weaken.

The South Asian economy exported a record $1 billion worth of the commodity in 2007 on higher prices, and may earn more this year as violence disrupted supplies from Kenya, according to the Sri Lanka Tea Board.

Sri Lanka's overseas sales, mainly garments for brands such as Victoria's Secret and Gap, have become less vulnerable to a U.S. slowdown as the island has secured more European markets, Central Bank Governor Nivard Cabraal said in January.

Exports climbed 11.3 percent to $2.49 billion in the first four months of 2008, according to the central bank. The bank expects overseas shipments to increase 10 percent this year.

LOLC receives approval to mobilize foreign currency deposits

Lanka ORIX Finance Company Limited, a member of the LOLC Group received approval from the Central Bank of Sri Lanka to mobilize foreign currency deposits, thereby becoming the first Finance Company in the history of financial services in Sri Lanka to be granted such an approval.

The LOLC group recorded an unprecedented growth in its performance during the immediately past financial year with a top-line growth of 50% and a bottom line growth of 21%, which is noteworthy, given the negative environmental pressures that prevailed during the financial year with high interest rates and inflation causing an increase in borrowing costs. The company also made a strategic investment in Commercial Leasing Company Limited with a view to increasing its scale of operations. Furthermore, the group is continuously increasing its reach to remote areas around the country through the Service Centers, which are being opened at the Lanka IOC Filling stations, consequent to the agreement signed with Lanka IOC.

The Group Managing Director/CEO of LOLC Kapila Jayawardena mentioned that LOLC is well placed to enter the foreign currency deposit mobilization market in terms of the strategically located global ORIX network, the widespread local branch network, and a significant percentage of ex-banking professionals, in employment at various senior and middle levels within the LOLC group. Furthermore, LOLC has a very advanced IT system which links all branches on-line real-time and a treasury management system which provides superior management information. Jayawardena further stated that they entered into an agreement with Western Union Money Transfer earlier on this year becoming an authorized agent, in order to be able to use this as a channel to remit foreign currency from the various overseas locations to savings accounts, which will be maintained with Lanka ORIX Finance Company Limited. The stability of the LOLC Group, the high standard of corporate governance and sophisticated risk management techniques adhered to by the group may have added some weight to our proposal to mobilize foreign currency deposits. Kapila Jayawardena said, "We will be able to offer extremely competitive interest rates, an exceptional service and more importantly a high level of stability to NRFC and RFC account holders. We are also looking at giving very attractive promotional offers to our clientele and are confident that we will be the preferred NRFC /RFC partner to many an investor." The LOLC Group is a financial services conglomerate in the country and offers a range of financial solutions such as Insurance, Fixed Deposits & Savings, Factoring & Working Capital, Leasing, Fleet Management, Agro & Micro Finance, Pawning, Stock Brokering, Islamic Finance, and also non-financial solutions such as IT, Project Development, Real Estate and Forestry.

India, Lanka to conclude CEPA talks

India and Sri Lanka are all set to conclude their discussions on the proposed Comprehensive Economic Partnership Agreement (CEPA) by July 12. However, owing to the sensitivities of industries in both the countries, so far there has been no agreement on proposals regarding reduction of their respective negative list (items not subjected to tariff reduction commitments). In the final round talks, to be held in Colombo from July 9 to July 12, both sides would also finalise provisions regarding services and investment that form part of CEPA other than the trade in goods section.
Both sides have held more than 12 rounds of talks so far since February 2005. The two countries, had in March this year, finished the implementation of the Free Trade Agreement on trade in goods inked in March 2000. Though New Delhi and Colombo had recently asked industry bodies to respond to suggestions on a possible reduction of negative list to enhance bilateral trade and expand the scope of FTA, the response has been discouraging, a senior government official said, adding that they have decided to go ahead with the current negative list. Both sides are targeting to achieve a bilateral trade of $5 billion by 2010.

India-Sri Lanka trade in 2006-07 was $2.72 billion, marginally up from the previous fiscal’s $2.6 billion. Bulk of Indian export to Sri Lanka includes petroleum products and transport equipments (almost 50% of the total), while primary and semi-finished iron and steel is also a fast growing export item. Among the significant import items are coffee, tea, edible oil, non-ferrous metal imports, spices and electrical machinery.

At present, in its effective negative list India has 429 items comprising products from sectors like chemicals, plastics, small-scale industry products, textiles and edible oils. Apart from these items, India has placed 598 other items (all from the textile sector) where a 25% duty concession has been given, making them comparatively easier to trade in. On the other hand, Sri Lanka has kept 1,180 items in its negative list comprising mostly products from the agriculture, automobiles and capital goods sectors.

In the services side, both countries have exchanged a schedule of commitment to give greater market access to each other’s services industry and have agreed to make the pact WTO-plus. On its part, Sri Lanka had earlier agreed to give a revised commitment. Sri Lanka’s commitment is an offer to open services sectors like financial services, IT, maritime, audio-visual and some segments of health services to Indian industry. India has also offered for greater access to services of interest to Sri Lanka, comprising 110 sub-sectors including IT, convention, audio-visual, tourism (including hotels, travel and tour agents), maritime (including cargo-handling and customs clearance) and air transport.

However, as per the schedule of commitments on investments, companies can carry out services operations in the other country following the respective FDI guidelines. "The investment agreement is only to give protection post-investment," an official said.

Direct flights between Sri Lanka-Nepal essential

Enterprise Development and Investment Promotion Minister Dr. Sarath Amunugama said on Thursday that the absence of direct flights between Sri Lanka and Nepal was the biggest impediment to bilateral tourism.

He was speaking at a seminar, Windows on Nepal, in Colombo.

"The two governments should seriously consider the resumption of flights between the two countries if we are to promote their tourism interests," he said.

Today tourists visiting the two countries have to fly in circuitous routes such as Bangkok, Delhi, Kolkata or Doha wasting valuable time and money, he said.

The Minister said that both countries were blessed with tourist attractions. Nepal had the breathtaking mountains and Sri Lanka the sun kissed beaches, he said.

Dr. Amunugama reminiscing the days he had worked as a UNadvisor said there were Westerners who used to spend a couple of months in Nepal visiting places of tourist interests such as Kathmandu and Pokhara and to take the direct flight to Colombo from Kathmandu and to visit the beaches in Hikkaduwa and Bentota.

"The flights were full of such tourists who were mainly hippies and the plane smelt of grass," he said in lighter vein.

Today some of them are holding top positions in their respective countries and would have fond memories of the good old days, he said.

As much as the two countries were blessed with many gifts of nature , they also had their share of problems, he said.

"Sri Lanka is saddled with the civil war and Nepal also has experienced a similar problem. But I am rely happy to note that Nepal has entered the democratic process," after going through a bad period," he added. There were opportunities to promote bilateral trade, he said.

Shell gas increases by Rs. 8

Shell Gas will increase the price of a domestic 12.5kg cylinder by Rs. 8 with effect from midnight today, bringing the revised price to Rs. 1737.

Laugfs reduces gas by 53 rupees

Laugfs gas is to reduce the price of a 12.5 kg Cylinder by 53 rupees from midnight today bringing the revised price to Rs. 1668.

Sri Lankan and Indian Chambers signed a MOU

Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) of India and Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) signed a Memorandum of Understaing (MoU) to jointly ptomote trade and investment between the two countries.
“Still there is immense potential left to further expand bilateral trade between India and Sri Lanka and since the signing of the Indo-Sri Lanka Free Trade Agreement in March 2000 trade has grown rapidly between the two countries,” said FCCISL Secretary General/CEO, Samantha B Abeywickrama at the occasion of signing the MoU with FAPCCI.
FAPCCI and FCCISL signed the MoU to foster friendship and to promote trade, investment, social, economic, human resource development, technical and scientific cooperation, friendship and other spheres of economic activity.
Abeywickrama said that negotiations on India and Sri Lanka Comprehensive Economic Partnership Agreement (CEPA) is now ready to be signed and thus it would facilitate the inclusion of investment and services in addition to deepening commitments embodied in the Indo-Sri Lanka Free Trade Agreement signed in 2000.
He said that FCCISL is a one-stop shop for investments in Sri Lanka and invited Indian entrepreneurs to visit Sri Lanka to explore the opportunities.
Shri Suraj Prasad Agrawal, President, FAPCCI said that the early conclusion of CEPA will have an added impetus to the ongoing Indo-Sri Lankan economic partnership. The FTA has accelerated the development of economic cooperation and with growing mutual trade, a bilateral trade of US $ 5 billion is envisaged to be achieved by 2010.

Gas price going up again

The domestic cooking gas price is to be revised from midnight today according to the Consumer Affairs Authority (CAA).
The price revision had been requested by Shell and Laugfs gas companies and would be based on the pricing formula.

Sources said the pricing committee of the CAA had finalized the new prices last week and these were submitted it to Chairman Rumi Marzook for a final decision today.

Meanwhile Shell Gas company had earlier requested for a price increase of Rs. 324 for a 12.5 kg cylinder of gas.

Great scope for Pakistan to export cement to Sri Lanka

There is a great scope for Pakistan private sector to export cement to Sri Lanka to meet the ever increasing demand of cement as construction industry in Sri Lanka was rapidly growing with a reasonable pace.

President, Sri Lanka Federation of Chambers and Commerce and Industry, Nawaz Rajabdin who is also VP, SAARC CCI, on Monday was talking to his counterpart in Pakistan Iftikhar Ali Malik .

He said Sri Lankan government has offered special package of attractive incentives for investment from Pakistan under SAFTA and FTA. He said that Sri Lankan ministry of Textile and Industries Development has floated international tenders to import huge quantity of cement and Pakistan private sector can take full advantage.

Nawaz Rajabdin also discussed the issues of mutual interest while emphasising the two countries should effectively contribute towards promotion of bilateral as well as regional trade.

Iftikhar Ali Malik said Sri Lankan minister for Textile and Industries Development Kanera Valgam has assured him that Sri Lanka will fully encourage Pak private sector to export cement to his country at competitive rate.

Sri Lanka attached great importance to private sector of Pakistan in the region and signed free trade agreement with Pakistan on August 01, 2002 followed by signing of the protocol on Feb 09, 2005 and full implementation of the free trade agreement on June 12, 2005.

Another member of the delegation Shahzad Ali Malik, Chief Executive Guard Rice said that Pakistan has granted tariff rate quota (TRO) arrangements to Sri Lanka for export of 10,000 MT tea,1,200 MT betel leaves and 3 million pieces garments every financial year (July-June) while Sri Lanka has granted TRO arrangements to Pakistan for export of 6,000 MT Basmati Rice and 1,000 MT Potatoes for every calender year.

However, import of potatoes is permitted only during the off-season period in Sri Lanka.

Nawaz Rajabdin said 4-days recent visit of President SAARC CCI Tariq Sayeed to Sri Lanka which concluded on June 28 was most successful for having more one on one personal interaction with business community and trade leaders of two countries.

It may be mentioned here that it was a great honour for Pakistan that Tariq Sayeed, a Pakistani business leader and SCCI Chief was especially invited to inaugurate the first ever chambers competition awards 2008 ceremony, a prestigious event organised by the Federation of Chambers of Commerce and Industry Sri Lanka at Colombo on Friday (June 27).

Great scope for Pakistan to export cement to Sri Lanka

There is a great scope for Pakistan private sector to export cement to Sri Lanka to meet the ever increasing demand of cement as construction industry in Sri Lanka was rapidly growing with a reasonable pace.

President, Sri Lanka Federation of Chambers and Commerce and Industry, Nawaz Rajabdin who is also VP, SAARC CCI, on Monday was talking to his counterpart in Pakistan Iftikhar Ali Malik .

He said Sri Lankan government has offered special package of attractive incentives for investment from Pakistan under SAFTA and FTA. He said that Sri Lankan ministry of Textile and Industries Development has floated international tenders to import huge quantity of cement and Pakistan private sector can take full advantage.

Nawaz Rajabdin also discussed the issues of mutual interest while emphasising the two countries should effectively contribute towards promotion of bilateral as well as regional trade.

Iftikhar Ali Malik said Sri Lankan minister for Textile and Industries Development Kanera Valgam has assured him that Sri Lanka will fully encourage Pak private sector to export cement to his country at competitive rate.

Sri Lanka attached great importance to private sector of Pakistan in the region and signed free trade agreement with Pakistan on August 01, 2002 followed by signing of the protocol on Feb 09, 2005 and full implementation of the free trade agreement on June 12, 2005.

Another member of the delegation Shahzad Ali Malik, Chief Executive Guard Rice said that Pakistan has granted tariff rate quota (TRO) arrangements to Sri Lanka for export of 10,000 MT tea,1,200 MT betel leaves and 3 million pieces garments every financial year (July-June) while Sri Lanka has granted TRO arrangements to Pakistan for export of 6,000 MT Basmati Rice and 1,000 MT Potatoes for every calender year.

However, import of potatoes is permitted only during the off-season period in Sri Lanka.

Nawaz Rajabdin said 4-days recent visit of President SAARC CCI Tariq Sayeed to Sri Lanka which concluded on June 28 was most successful for having more one on one personal interaction with business community and trade leaders of two countries.

It may be mentioned here that it was a great honour for Pakistan that Tariq Sayeed, a Pakistani business leader and SCCI Chief was especially invited to inaugurate the first ever chambers competition awards 2008 ceremony, a prestigious event organised by the Federation of Chambers of Commerce and Industry Sri Lanka at Colombo on Friday (June 27).

High-tech bridge for Arugam Bay

The Government will open the new Arugam Bay bridge connecting Pottuvil, Arugam Bay and Panama in the Eastern province, to the public today (June 30).

The bridge constructed at a cost of US $ 10 million, will replace the old bridge over Arugam Bay which was severely damaged in the 2004 Boxing Day tsunami.

The United States Agency for International Development (USAID) has provided financial assistance for the construction of the new state-of -the-art bridge which has been designed and built according to US technology.

According to the Highways Ministry, the new bridge which runs parallel to the old one, comprises two spans measuring 185 metres, and offers user-friendly features like protected pedestrian walkways. The project launched in August 2006 also includes 900 metres of paved access roadway and a water supply system for Arugam Bay.

"We hope that the project will be a major boost for the fishing, agriculture and tourist industries in the areas and thus help the revival of the economy in the East," a Ministry spokesman said.

Private sector pay hike next month

The government yesterday said salaries of private sector employees would be increased from next month, following a request made by the Labour Minister.

The private sector responded positively to a request made by Minister Athauda Seneviratne for a 15% to 30% pay hike for private sector employees.

Minister Seneviratne said the pay hike would come as a temporary solution for the skyrocketing cost of living largely triggered by rising world oil prices.Mr. Senevirate said the ultimate objective would be sustainable development through improving productivity. He said the pay hike would be implemented following discussions with the relevant parties.

Garments specific for British Defence Ministry manufactured in Sri Lanka

Texstyle Lanka Private Limited entered into an agreement with the BOI to manufacture garments for export on June 26. Mr. Ananda Bandara, Chairman and Managing Director and Mrs Hemali Bandara, Director of the company and Mr Dhammika Perera, Chairman/ Director General of the BOI, signed the Agreement. Dr Sarath Amunugama, Minister of Enterprise Development and Investment Promotion formally handed over the BOI Certificate of Registrations to the investor.
Minister Amunugama congratulated the investors stating that Texstyles Lanka Exports Private Limited illustrates well the spirit of enterprise of Sri Lankan companies who have succeeded in mastering cutting edge technologies and is now able to meet the requirements of demanding customers overseas. In the future other Sri Lankan companies will carve themselves niches as the demand for specialized and high-end goods will increase.

The cost of the project, which is located at Boralessgamuwa is US$ 718,000 and the company will be employing 175 workers. Texstyle Lanka exports 80% of all its production to the British Ministry of Defence.

Mr. Ananda Bandara, an engineer by profession, who has many years of experience in the textile industry. He founded the company as a garments buying and liaison office and got into manufacturing with his vast experience. Over the years he developed his knowledge in a very specialized area in the manufacture of garment, such as flying suits and equipment used by military and aerospace professionals.

Mrs. Hemali Bandara, his spouse, is also a company Director is well experienced in the textiles and garments manufacturing. Her knowledge of the garments industry included experience working for Hentley Garments, May Department

Stores International and also at Liz Claiborne. The company has been in existence since 2003 when it had just 9 employees as a modern sample-manufacturing unit. In 2004 it increased it staff strength to 75 employees. In 2006 Texstyle Lanka began producing aircrew coveralls and contracted with RFD Beaufort UK, main supplier to the British Ministry of Defence. The true knit unit was started in 2007 to supply sweaters, pullovers and cardigans to the UK market for labels such BHS, Chums, Woodwille, Heatons and other brands. In 2008, the company workforce was expanded to 120 employees.

Texstyle Lanka is the only Sri Lankan Company to supply United Kingdom’s Ministry of Defence. The main buyer of the company is RFD Beaufort Private Limited, a British company that supplies safety, military, aerospace and survival clothing equipment for the British Ministry of Defence and other countries as well. For such production very advanced machinery is used to produce the garments needed to equip and protect fast jet pilots and parachutists.

Many of the clothing items use new types of high value non-flammable materials that meet the highest aerospace requirements. One example is a fleece-lined garment that protects fighter pilots flying in very cold conditions. The garment is also fire resistant.

Other products include suits for aircrews and for ground crews. Anti G trousers that counteract the forces of gravity are also among the goods produced and exported by the company. Furthermore they produce and supply fabric sea anchors used in life rafts for survival operations, in addition to specialized working clothes and helicopter flying suits for those employed on oilrigs. Future advanced products will include advanced garments such as tri-laminate immersion suits and submarine escape survival kits.

Sri Lanka's national carrier slaps fuel surcharge

Sri Lanka's national carrier, Sri Lankan Airlines, will re-introduce a fuel surcharge to cover rising jet fuel costs, the airline said Saturday.

"Sri Lankan Airlines has re-introduced the fuel surcharge for travel and ticketing effective July 1," the airline said.

It said flights between Sri Lanka and Southeast Asian countries will cost 50 dollars more while fares to the United States and Canada will increase by 160 dollars. Middle East and other destinations will cost 90 dollars more.

Sri Lanka offshore sand deposits draw foreign interest

Foreign investors are interested in mining sea sand off Sri Lanka's western coast to be used in the construction industry which is facing shortages of the material, government officials said.

But the high cost of the offshore sand mining and potential conflicts with fisher communities are deterrent factors, they said.
Geological Survey and Mines Bureau chairman N P Wijayananda said the best sea sand deposits are found between the coastal towns of Kalutara, south of the capital Colombo, and Kalpitiya, to its north.

"There are investors who want to mine, especially for the port projects."

Sri Lanka has two big port projects planned – one to expand Colombo port and the other to build a new harbour in southern Hambantota.

The sea sand deposits off the western coast have already been exploited by the government to provide material for highway as well as previous port construction projects, he said.

The bureau has issued an exploration licence to a Korean investor who showed interest in mining the offshore sand deposit north of Colombo.

"The investor is to do further investigations," Wijayananda said.


Another licence has been issued to an investor covering an area off southern Hambantota.

But sea sand off the south coast has been found to have more calcareous material – coral and shells – making it more suitable for filling purposes rather than construction, Wijayananda said.

Sri Lanka construction contractors are facing a serious shortage of sand owing to restrictions on river bed mining.

The restrictions were imposed to prevent environmental damage and led to prices of sand soaring in the local market.

Wijayananda said more offshore sea sand mining was required to fill up previously mined stockpiles as they get depleted. .

SINGER SRI LANKA SELLS STAKE IN LEASING FIRM TO LANKA ORIX

Singer (Sri Lanka) said it will sell its 30 per cent stake in its associate Commercial Leasing Co. valued at 495.8 million rupees (US$4.6 million) to Lanka Orix Leasing Co. (LOLC) following a mandatory offer.
Singer (Sri Lanka) said in a stock exchange filing that it has accepted the mandatory offer made by Lanka Orix Leasing Co. for the shares held by Singer (Sri Lanka) of Commercial Leasing Co.

Singer (Sri Lanka) held 30 per cent of Commercial Leasing Co. and accounted it as an associate company.

The statement said the value of the shares is 495.8 million rupees, which is about 408.9 million rupees above its Net Book Value in the company accounts and 80.2 million rupees above its Net Book Value in the Group accounts.

Commercial Leasing Co was taken over last month by Lanka Orix Leasing Company which offered to buy out other shareholders under stock exchange rules.

Commercial Leasing Co is a mid-sized specialised leasing company which was started in 1988, and has a share of around five per cent of the leasing market.

Foreign capital must for economic survival of SAARC countries

In the era of globalization the economic survival of developing countries, especially of the SAARC nations, depends on their ability to compete, create attraction for foreign capital, enlarge markets and pool their resources. President SAARC Chamber of Commerce and Industry,Tariq Sayeed said while inaugurating the first ever ‘Chambers Competition Awards 2008’ organised by the Federation of Chamber and Commerce and Industry, Sri Lanka (FCCISL) in Colombo on Friday, according to a message received here.
“Ultimately it will be the collective,creative and enterpreneural energy of the South Asia that will enable it to compete and emerge as a dynamic partner of the global economy”.
He stressed the urgent need for the adoption of following measures to strengthen and boost the economy among SAARC countries:
Formation of the strategic planning,defining the role and objective compatible to the requirements of business community,building repute as a centre of quality information, improvement of role and advisory units for government on economic issues, refurbishing secretariat on modern lines,provision of training for augmenting capacity building of the employees, developing effective relationship with government agencies and promotion of public-private partnership.
He said he was confident that the adoption of such measures will not only designate chambers as true representatives of the business community of the country but also elevate the image of the institution.
Tariq Sayeed said that “FCCISL Chambers Awards 2008” will add a new chapter in the history of the FCCISL and create a “healthy environment” amongst the chambers at regional and national level.”This would go a long way in building the image of chambers as partners of economic development in a country”.
He said launching of this award was inspired by winning the world chamber award at the world chambers federation and congratulated FCCISL for this milestone. “This is not only a pride for the institution but also an honour for the region of South Asia”.
Tariq Sayeed said that conferring awards to regional chambers is a prestigious approach to acknowledge the most acclaimed projects undertaken by these chambers. Later,he gave away awards to winners.
VP SAARC Chamber of Commerce and Industry,Pakistan chapter and deputy leader of Pak Traders delegation Iftikhar Ali Malik also graced the occasion.
Nawaz Rajabdin,President FCCISL and Vice President SAARC,Sri Lanka chapter, speaking on the occasion, thanked Tariq Sayeed for inaugurating the mega event.
He said that services of Tariq Sayeed to bridge the gap between business community and promotion of commercial activities in the region were commendable. He said these awards will serve as a stimulator to uplift the chamber movement in the country.
It may be mentioned here that Tariq Sayeed is the first Pakistani invited by FCCISL to inaugurate the prestigious ceremony of Chambers Competition Awards 2008.

Sri Lanka retailer cuts diesel price further

Indian Oil Corp's (IOC.BO: Quote, Profile, Research) Sri Lankan retailing unit has reduced its diesel prices for a second time in a week by 10 more rupees ($0.09) per litre to 110 rupees line with those of state-owned Ceylon Petroleum Corp (CPC), official said on Thursday.

Lanka IOC LIOC.CM reduced its diesel prices to match the state owned oil retailers diesel prices in line with a request by the Sri Lankan government, said K.Ramakrishnan, the managing director of the Lanka IOC.

"We have done this on the advice of the government, we also firmly believe that the government will be lenient in the new petrol tax in turn of reducing the diesel prices," Ramakrishnan said.

Lanka IOC on Tuesday announced its decision to reduce its diesel prices by 10 rupees to 120 rupees with effect from Tuesday midnight. This followed the government's request last week that it cut by 20 rupees to bring them into line with those of state-owned Ceylon Petroleum Corp (CPC) or face 'severe' action.

Until Tuesday Lanka IOC sold diesel at 130 rupees ($1.2) a litre, 20 rupees more than CPC. The government said that had pushed up losses at CPC by 400 million rupees a month as drivers have flocked to its cheaper pumps, increasing its sales by 20 million litres.

Lanka IOC raised its diesel price three times late last month, increasing its margin over CPC, but kept petrol prices at the same level as CPC at 157 rupees a litre.

Sri Lanka says it already subsidises CPC at 30 rupees a litre for diesel.

In mid-2006, Sri Lanka allowed Lanka IOC to fix its own prices depending on world markets.

The Lanka IOC officials last week said 'there is no level playing ground' in Sri Lanka as the government imposed a new 24.50 rupee per litre tax on petrol imported as a finished product since May 25, had cut into its margins.

Lanka IOC has to pay the tax on every litre of petrol, while CPC only pays it on half the petrol it sells as the other 50 percent is refined locally, Lanka IOC said last week. ($1=107.73 Sri Lankan rupees)

Total Security Appliances to Secure Sri Lankan Enterprises

Check Point® Software Technologies Ltd. (Nasdaq: CHKP), the worldwide leader in securing the Internet, announced the Sri Lankan launch of Check Point Power-1™, a new line of Internet security appliances offering high-performance sites a simple, robust, and easy to manage security solution with the best price/performance ratio available. Check Point also introduced in the Sri Lankan market the new UTM-1 Total Security® appliances, giving enterprise sites of all sizes more choices to match the right solution with their security and performance needs. Check point is pleased to announce the availability of these solutions through its Authorized Regional Distributor, Ceylinco Networking Technologies Ltd. (CNT).

Power-1 appliances combine firewall, IPSec, virtual private network (VPN) and intrusion prevention with advanced acceleration technologies, delivering a high-performance security platform for multi-Gbps environments.

"We are committed to providing our customers high performing security solutions," said Bhaskar Bakthavatsalu, Country Manager, India & SAARC, Check Point Software Technologies. "Power-1 provides customers the flexibility to combat malicious applications and threats while maintaining predictably high speeds. With the new appliances, tight security does not come at the expense of network performance."

"However Sri Lankan SMBs seeking to leverage the most out of constrained IT resources want out-of-the-box network solutions with all the key security features and services on a platform that can keep a network moving quickly and smoothly. With UTM-1 Total Security, customers get the most comprehensive, powerful network protection on the market based on the same VPN-1® solution that protects the Fortune 500 in a single, easy-to-manage, cost effective platform," he added.

Power-1 appliances provide performance up to 14 Gbps firewall throughput, delivering the most cost-efficient firewall for high performance environments a price/performance ratio under $4 per Mbps. With a 6.1 Gbps intrusion prevention speed, customers also gain the ability to stop application layer threats at industry-leading speeds. Consequently, organizations facing application security threats, such as worms or buffer overflows, will be able to stop them while maintaining high performance for business critical applications. Since advanced acceleration technologies are built into the software, customers can also receive performance improvements without upgrading hardware, maximizing the value of their security investment.

New security protections and product updates can be easily installed as needed so businesses get the latest security deployed quickly. Multiple Power-1 appliances can be centrally managed with other Check Point security gateways through a single console, thus simplifying network security management and reducing administrative costs. The console simplifies the management of complex architectures found in high performance environments. In addition, it provides a single interface for managing firewall, VPN, and intrusion prevention as well as analytical and monitoring capabilities. As sites increase in complexity or in size, their environments will require security appliances with more ports and higher performance. The two new Check Point Power-1 appliance models provide the ability to meet all levels of complexity.

The new UTM-1 Total Security appliances expand the performance of the UTM-1® line up to 4.5 Gbps. Customers can choose the right solution for their environment with appliances ranging in performance speeds from 400 Mbps to 4.5 Gbps. The entire UTM-1 Total Security product line comes with the "Total Security" package, which offers either one or three years of comprehensive security services and reduced support rates. Each UTM-1 Total Security appliance comes complete with all the security protection, software and security updates and hardware to achieve the highest levels of network security. Integrated security protections include:
· Industry-leading application and network-layer firewall
· Site-to-site and remote access VPN
· Gateway antivirus and anti-spyware
· Intrusion prevention with type-based SmartDefense® security update and type-based protection
· Web security with URL filtering and Web security protections
· Messaging security and anti-spam, including Check Point’s six-dimensions of comprehensive messaging security

“We at CNT are proud to represent Check Point in Colombo and the SAARC region. This step taken jointly by Check Point and CNT to launch these new solutions will further empower us to provide total internet security solutions to our clientele.” said Sanjaya Padmaperuma, Director/General Manager, Ceylinco Networking Technologies Ltd.

Gowri Shankar at the helm as 36th President of CIMA Sri Lanka

Ms. Gowri Shankar Somasundaram was elected as the 36th President of CIMA Sri Lanka Division at its 20th AGM held at the Cinnamon Grand. Guest of Honour on the occasion was Dr. B. Mahadevan, Professor at IIM Bangalore. The second woman to head this premier institution in Sri Lanka, and also the third woman President worldwide, Gowri Shankar now joins the echelons of a band of distinguished personalities who have chartered the destiny of this much respected institute, since its inception in 1965.

Accepting the Presidency, Gowri Shankar said her vision was to reinforce the professional excellence of the fraternity. “Profession First is a theme that I will be devoted to. My year will be dedicated to the advancement of the Management Accountancy Profession, to equip, elevate and enrich it”.

She further stated, “Our discipline is in the business of creating value. Value Creation is the foundation of any business. We will advocate ‘thought leadership’ through Technical Forums where new ideas will be encouraged. We will also be driving discussions as to the enhancement of the profession in the Public Sector by facilitating our discipline to be introduced through new initiatives.

Gowri is also committed to Islamic Finance. With her travel mainly in the Middle East and working in the Islamic Finance context, she will launch Islamic Finance as a master course. “Business today demands intelligent and insightful professionals with a strategic vision. Students are our future wealth. Student development and growth will thus be a major focus in developing the ideal professional the world demands”, she added.

Functioning as Advisor and Business Partner to His Royal Highness Prince Mish’al Bin Moham