Sri Lanka to seek competitive bids for state asset sales
ECONOMYNEXT – Sri Lanka will adopt a competitive bidding process for asset sales and will shortly call for expressions of interest from transaction advisors to support the divestment program, the head of the state enterprise re-structuring unit Suresh Shah said.
All assets will be sold through a competitive bidding process and no unsolicited bids will be accepted.
The first step will be to select transaction advisors.
“We will work with development financial institutions and qualified and experienced consultancy firms to provide transaction advisory services,” Shah said.
“After the transaction advisors study the companies, we will call for bids.”
Sri Lanka’s cabinet of ministers has given the go ahead for the sale of SriLankan Airlines including Sri Lankan Catering which has large volumes of debt from losses after it was taken back to state management from Emirates.
Sri Lanka Telecom, Sri Lanka Insurance Corporation, Litro Gas Lanka Ltd/Litro Gas Terminals Pvt Ltd, Canwill Holdings Pvt Ltd which owns the Grand Hyatt building, Hotel Developers (Hilton) are also in the list.
The transaction advisors will assist in “sell-side due diligence, valuation, data room creation, transaction strategy and marketing” of the firms, according to a statement from the re-structuring unit.
All assets will be sold through a competitive process. Both domestic and foreign investors could bid.
“We will not accept unsolicited bids,” Shah said. “We will follow a transparent and credible process. Whoever want to make a bid will be given the opportunity. We will call for bids both locally and internationally.”
A decision to list any unlisted firms has not has not been taken as yet but will be considered, he said.
In addition to getting immediate cash from asset sales, helping boost cashflows, the government will also bet a share in any higher future profits under private management through corporate income tax, not counting turnover taxes.
The debt of SriLankan Airlines will be re-structured before a divestiture.
According to IMF program related documents, a plan to re-structure debt of several state companies including SriLankan Airlines has to be approved by cabinet by June 2023 under a structural benchmark involving a World Bank program.
By September residual dollar loans would be transferred to the government. (Colombo/Mar28/2023)
Sri Lanka to seek competitive bids for state asset sales
Karaikal-KKS ferry service to commence on 29 April
Minister of Ports, Shipping and Aviation, Nimal Siripala de Silva said the first ferry line, of the new ferry service, to be operated between Karaikal Port in Puducherry, India and Kankesanturai (KKS), is scheduled to call at the KKS Port on 29 April.
The Minister disclosed this information at a discussion, with the stakeholders of this new ferry service, held recently at the Ministry.
A passenger terminal was built at the KKS Port as part of infrastructure development for the new ferry service. The Sri Lanka Ports Authority (SLPA) has provided a financial facility of Rs 144 million for construction carried out by the Sri Lanka Navy.
The initial construction phase of the passenger terminal has already been initiated by the SL Navy and will be handed over to the SLPA by the second week of April, following completion.
The ferry service owners at the discussion revealed that USD 50 will be charged from a passenger for a one-way trip and a baggage allowance of 100 kg will be permitted.
A ferry will carry 150 passengers at a time and will take around 4 hours to reach KKS from Karaikkal Port. Ferry service owners emphasised that only day time services will be operated initially. The Minister said as the ferry service has been launched, any entrepreneur from Sri Lanka or India is welcome to invest.
The Minister also said besides the launch of the new ferry service, the expansion activities of the KKS Port will be expedited.
“As the credit line from India for this construction is insufficient, an additional credit facility of USD 16 million has been requested from the Indian Exim Bank,” the Minister said.
Karaikal-KKS ferry service to commence on 29 April
Why Sri Lanka could be the IMF’s most spectacular failure
(Following is the excerpts of Dyan Jeyathilake’s article in the Sri Lanka Finacial Times of 16th March 2023)
Much of the discussion in and on Sri Lanka has either been a shrieking chorus of ‘Go to the IMF yesterday!’ coming mainly from the rightwing economists of the main Opposition, the SJB, or a no less shrill chorus of ‘beware the IMF!’ from the Oppositional left. My own ‘third position’ is different. It stands on two legs: ‘beware Ranil plus the IMF’ being one and ‘IMF beware of Ranil’ being the other.
The first leg – ‘beware Ranil plus the IMF’ – is because the IMF recipe in and of itself is much less dangerous than the extreme economic ideas of Sri Lanka’s antiquarian Reaganite-Thatcherite rightwing economists. Those ideas inform the economic agenda of Ranil Wickremesinghe as manifested in his policy agenda in 2001-2003 and 2015-2019. These ideas were so repellent to the public that he was electorally rejected on both occasions, most dramatically in 2020. An earlier model of this rightwing policy package was one of the causes of a massive insurrection in the late 1980s and had to be completely re-programmed and reformatted by President Premadasa so that democracy and the market economy could survive.
Ranil Wickremesinghe as President is seeking to implement his voodoo economics ‘Big Bang’ on the back of an agreement with the IMF in a classic example of what Naomi Kline has called ‘the shock doctrine’.
The second leg of my argument is that just as Sri Lanka has to beware the IMF reform agenda, the IMF has to beware Sri Lanka which can go from quagmire to volcano and back within a year thanks to President Ranil Wickremesinghe.
The IMF has cleaned up its act somewhat. It hasn’t undergone quite the shift that the World Bank did when Robert McNamara took over after his Pauline conversion to the upliftment of the poor having failed to defeat the Communist-led Vietnamese liberation fighters. But the IMF is considerably better than it was, and this has been pointed out by no less a critic than Prof. Joseph Stiglitz in his positive evaluation of the agreement with Argentina.
The problem arising out of an agreement with the IMF could have been mitigated had Sri Lanka presented its own national plan drafted by its best minds in the relevant field. This has not been done so far, though Yanis Varoufakis and Nishan de Mel have been saying just this independently of each other for a while. Neither the Government nor any political party of right, left or centre has a national plan or anything remotely like the best national team that Sri Lanka can deploy. My litmus-test would be whether Howard Nicholas, Nishan de Mel and Ravi Ranan-Eliya are on it.
Sad as this is, it isn’t the worst thing about the current situation. What is most dangerous is that President Ranil Wickremesinghe is openly invoking the IMF in openly sabotaging the holding of the local authorities election and going on to leave the electoral calendar open-ended, avoiding a commitment to any election stipulated by the Constitution. By doing so, President Wickremesinghe is using the IMF as human shield in his agenda of remaining in office without elections.
Link EFF to elections
Sri Lanka is Asia’s oldest democracy. In fact, it is also Afro-Asia’s oldest democracy. It is over 90 years old. Ranil Wickremesinghe is using the IMF excuse to end Sri Lanka’s democratic character by blocking overdue local authorities’ elections and making no commitment to the inflexibly embedded presidential and parliamentary elections of 2024 and 2025. Instead, he enunciates a doctrine that makes democratic elections entirely dependent on his subjective perception of economic stability.
Thus, Ranil has pitted the IMF program against democracy, thereby identifying the IMF agenda as something that is so fragile that it has a zero-tolerance of competitive democracy. By so doing he also fosters an identification between the IMF agenda and frankly authoritarian rule, turning the clock back to the bad old days of the IMF as an objectively anti-democratic associate of Latin American dictatorship.
Prospects are even worse for the IMF in its current dealings with Sri Lanka. Any stabilisation package which lacks a democratically elected administration as its partner, lacks legitimacy. It is therefore highly probable that the agreement will draw discontent along two, not just one, vector: the socioeconomic and the political. Had the IMF agreement been with a country with an elected President – at least one elected to the legislature in the first place, before he was elected by the legislature—it would have been finetuned by someone who had a mass base; an organic mass connection.
Instead, you have an IMF agreement being used as a shield against the electoral process itself. This ensures that it is not only the standard socioeconomic backlash that the IMF agreement will generate but it will also run into the anti-autocracy/pro-democracy dynamic underway in Sri Lanka.
The combination of a stabilisation package overlaid by an autocratic political agenda will discredit the IMF agreement.
The confluence of a socioeconomic backlash and a political drive for democratic elections will blow the agreement out of the water, further discrediting the IMF.
Anyone who watched the massive popular protests named The Aragalaya (The Struggle) which swept away the local Bolsonaro figure, Gotabaya Rajapaksa would get my point that the Sri Lankans are unlikely to take the burial of elections and imposition of austerity measures lying down.
Of course, Ranil Wickremesinghe has proved capable of meeting protests with methods that have led to the loss of life, including of a war veteran serving as a private security guard at the University of Colombo. On the President’s watch both the faculty of Law and Royal College at which he studied, came under CS gas attack. Mysterious para-military type units, suspected to be contractors, have yet to be identified by the Sri Lankan military.
What this does not mean is that an Aragalaya is ruled out as an option. What it means is that an Aragalaya-2 is going to be costlier in terms of human lives.
When demonstrators carrying signs which name the IMF are clubbed and possibly killed, it isn’t going to make the IMF ‘brand’ look good.
The IMF should not underestimate our President. Sri Lanka had a robust two-party system. Those parties were the UNP and the SLFP. When Ranil Wickremesinghe took over the leadership of the UNP it had 94 seats. Now it doesn’t have a single elected member in the parliament. When the SLFP partnered with Ranil Wickremesinghe in 2015, it had been in office since 1994. During that partnership and due to it, the SLFP now has a pathetically few seats in parliament and is not the main Opposition. The backlash against the partnership with Ranil caused a huge split in the SLFP and the birth of the SLPP headed by the Rajapaksas. The SLPP is now partnered with Ranil having (s)elected him president through the legislature. It is now so weakened that it cannot hold an open-air public meeting.
Ranil Wickremesinghe is pure kryptonite. Now he’s going global, as BFF of the IMF.
So, what can the IMF do, given that it cannot interfere in politics? The states that are the mainstay of the IMF, such as the USA, can ensure that the local government elections are unblocked before the EFF is signed on March 20th, or it can keep the funds blocked until that happens even if it means going into the 2nd quarter of this year. Simply put, it should be ‘no elections, no EFF’.
If that doesn’t happen, the IMF will learn that though it is (barely) beyond the decades of ‘IMF riots’ it has entered on the arm of South Asia’s Mr. Kryptonite, the age of the ‘IMF Revolution’.
JVP-JJB’s Achilles Heel
The JVP has been in existence since 1965, and has tried many political projects, which have all failed to secure governmental and state power. Almost no revolutionary/left movement founded at the time the JVP was born has failed to win governmental power even episodically. Many movements founded after the JVP (e.g., El Salvador’s FPL, founded 1970) have had a stint or two in power.
The strategic concept of the united front is not an optional ‘app’ in serious Left theory and political practice. Originating with Lenin in 1921 at the 3rd Congress of the Communist International (‘Comintern’), it was developed by Trotsky, Gramsci, Stalin, Dimitrov, Ho Chi Minh and Mao. Mao named it one of ‘three magic wands’. It is in practice from Latin America to Nepal and Kerala.
Despite the JVP’s varied experience, one thing has remained constant. Their utter sectarianism; their allergy to a century-long Left strategy which dates from Lenin to Lula: that of the United Front. By any logic, that constant or constant absence – no united fronts- and the only other constant, the absence of success in gaining governmental and state power, are causally linked.
The question is why is the JVP-JJB which is today, closer to governmental power through popular consent than it has ever been, still clinging vehemently to its antipathy to a united front, when such a front or its absence could be the factor that puts it over the top?
The question is sharper still when one adds the present realities: the blockage of the electoral path by Ranil Wickremesinghe and the need to lever it open through mass struggle. Anywhere in the world, unity decisively helps such struggles and its absence foredooms them.
What the FSP lacks in quantity it makes up for in quality. A JVP-led Left Front would present a left platform, a left program, a left option in the economic crisis and the struggle for basic democracy.
(Link to the Full article)
https://www.ft.lk/columns/Why-Sri-Lanka-could-be-the-IMF-s-most-spectacular-failure/4-746362
Govt. agencies’ failure to hold the LG polls: SC grants leave to proceed with petition
Supreme Court today granted leave to proceed with a Fundamental Rights petition filed challenging the failure and refusal of several government departments to take the necessary steps to hold the Local Government Elections.
Supreme Court three-judge-bench comprising Justices Preethi Padman Surasena, Gamini Amerasekera and Janak De Silva granted leave to proceed with the petition under Articles 10, 12(1) and 14(1)(a) of the constitution.
The Centre for Policy Alternatives (CPA) and its Executive Director Dr. Paikiasothy Saravanamuttu filed this petition naming the Treasury Secretary, Government Printer, Inspector General of Police and several others as respondents.
The petitioners stated that the elections to elect persons as members of local authorities are required to be held every 04 years in terms of the relevant statutes. Elections were previously held in 2018, and the term of the Local Authorities that were due to expire in 2022 were ended for a year thereafter.
The petitioners stated that the conduct of the Government Printer and the Inspector General of Police is indicative of a coordinated campaign to procrastinate the holding of local Authority elections. The petitioners also stated that the President in the capacity as the Minister of Finance and the Secretary to the Treasury have not until the very last minute on the 23rd of February 2023 indicated that there is a challenging in the allocation of funds to conduct the elections.
The petitioners maintained that these actions are prejudicial to the fundamental rights of the petitioners and the citizens of Sri Lanka.
The petitioners are highlighting that the failure of the Government Printer, IGP, President Ranil Wickremesinghe (as Finance Minister) and the Election Commission failed to protect the fundamental rights of citizens, by failing to take proper steps as required by law to hold elections by 19th March as made compulsory in terms of the Municipal Councils Ordinance, Urban Councils Ordinance and Pradeshiya Sabhas Act.
Senior Counsel Viran Corea with Luwie Ganeshathasan and Khyati Wikramanayake appeared for the petitioners. Senior Additional Solicitor General Priyantha Nawana appeared for the respondents.(Lakmal Sooriyagoda )
President writes open letter to bilateral creditors with appeals and assurances
- Letter with clarifications aimed at providing comfort to all and enable SL to progress swiftly to next stage of the debt treatment negotiations
- Reiterates he is committed to stay the course, and says SL relies on creditors to do the right thing
- Woos all to maintain and even enlarge and strengthen official bilateral creditor coordination
- Says new era starts with full implementation of IMF-supported program and resolution of debt situation
- Commits to transparency and assures SL will not make any side arrangements with any creditor aimed at reducing debt treatment impact on that creditor
- Assures not to resume debt service to any creditor unless that creditor agrees on a comprehensive debt treatment in line with IMF-supported program parameters and comparability of treatment principle
President Ranil Wickremesinghe yesterday wrote an open letter to all official bilateral creditors of Sri Lanka with multiple appeals and assurances ahead of next week’s Executive Board consideration and approval of $ 2.9 billion four year Extended Fund Facility (EFF).
The letter contains clarifications aimed at providing comfort to all and enable Sri Lanka’s to progress swiftly to the next stage of the debt treatment negotiations.
Following is the full text of President Wickremesinghe’s open letter.
It was with great satisfaction and sincere hope that I welcomed the announcement made last Tuesday by the Managing Director of the IMF, Kristalina Georgieva, that an IMF Executive Board meeting will be held on 20 March 2023 to consider and hopefully approve the Extended Fund Facility (EFF) arrangement we requested as part of our efforts to restore macroeconomic stability and debt sustainability.
I would like to praise your diligence and express my gratitude to the Paris Club creditors and Japan in particular, and to India and China for enabling the cooperation required to arrive at this point and explicitly delivering IMF compatible financing assurances as well as the other creditor countries which answered the Paris Club creditors’ call to join them. I would also like to thank the Paris Club Secretariat for supporting these efforts.
Since taking office last July, my Government and I have been engaging in good faith with all of you, providing all the necessary information to enable you to make a proper assessment of our debt situation, and the required efforts to close our funding gap and restore debt sustainability. My Government also deployed all efforts to demonstrate our commitment to the EFF program and relentlessly engage on the path to reforms. Our administration has already implemented major reforms by way of prior actions agreed with the IMF.
In the 75 years of Sri Lanka’s independence, there has never been a more critical period for our economic well-being and future development. That is why we have introduced a robust reform agenda aimed at achieving debt sustainability, strengthening governance, widening the social safety nets supporting the most vulnerable and ensuring we can grow an inclusive economy attractive to international business. This is how we will improve the lives of our people and ensure they are first in line to benefit from improvements in our economic conditions.
The IMF-supported program will be critical to achieving this vision for our country. Hence, this new era starts with the full implementation of the IMF-supported program and the resolution of our debt situation with you as long standing partners, as well as with our commercial creditors. There is still a lot of work to be done together. I encourage you to maintain and even enlarge and strengthen official bilateral creditor coordination in the context of our forthcoming engagement. It is the best way of achieving an efficient, transparent and equitable implementation of our debt treatment exercise. For that, I call on the Paris Club bilateral partners, in particular Japan, together with all our other official bilateral partners, including India and China, to garner and foster coordination as you best see fit.
We also understand and acknowledge that we must ensure that appropriate safeguards are in place to ensure equitable burden sharing and comparability of treatment. To alleviate any legitimate concern in that regard, there are commitments that we can make to those of you willing to take action ahead of the others.
The first of these commitments, probably the most important one, is transparency. We commit to communicate transparently with all of you on any debt treatment terms that are agreed with any creditor or group of creditors, before being formalised. In the same vein, we commit to report regularly on our indebtedness, ensuring no financial liabilities incurred by the country are undisclosed.
Second, we commit not to resume debt service to any creditor unless that creditor agrees on a comprehensive debt treatment in line with IMF-supported program parameters and the comparability of treatment principle.
Third, we reiterate our commitment to a comparable treatment of all our external creditors, with a view to ensuring all-round equitable burden sharing for all restructured debts. To that end, we will not conclude debt treatment agreements with any official bilateral creditor or any commercial creditor or any group of such creditors on terms more favourable than those agreed under any multilateral platform put forward by our official bilateral creditors. Offering a debt treatment outside of the perimeter set by the debt targets under the IMF program would risk making Sri Lanka’s debt unsustainable again. To this end, we also confirm that we have not and will not make any side arrangements with any creditor aimed at reducing the debt treatment impact on that creditor.
I sincerely hope that these clarifications will provide comfort to all of you and enable us to progress swiftly to the next stage of the debt treatment negotiations. This is paramount for our country. Just as my administration and I have committed to do, we rely on all of you to do the right thing.
IMF urged Anti-Corruption Bill gets Cabinet approval
(FT 15-03-2023)
After years of long pursuit, the Anti-Corruption Bill ‒ a landmark piece of legislation defining measures to reduce corruption and vulnerabilities by improving fiscal transparency and public financial management was finally approved by the Cabinet of Ministers Monday to proceed with the next steps.
The move is a result of negotiations with the International Monetary Fund (IMF) for a bailout package, amidst the ongoing economic crisis. Such a Bill was long overdue and should have ideally come as a result of domestic compulsions rather than an international compulsion.
“Clearance of the Attorney General has been granted for the draft bill prepared by the Legal Draftsman. The Cabinet-approved legislation will now be gazetted as a Bill and thereafter presented in Parliament,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday.
He said the IMF has urged Sri Lanka to reduce corruption and vulnerabilities by improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework and conducting in-depth governance diagnostic, whilst, in turn, the agency will provide an extended fund facility of $ 2.9 billion.
On 7 March, IMF announced that it’s Executive Board on 20 March (Monday) will consider the approval of the Staff Level Agreement reached with the Sri Lankan Government in September last year for a $ 2.9 billion four-year Extended Fund Facility (EFF) program.
“This will be a great opportunity to address the systemic corruption in Sri Lanka in a multitude of spheres and will also benefit to secure the IMF bailout. The Government must demonstrate its willingness for fiscal transparency and reduction in corruption to gain a degree of credibility with international financial partners. A strong anti-corruption legal framework would in this regard be an absolute necessity for debt restructuring efforts,” Gunawardena said.
On 8 February, President Ranil Wickremesinghe said the Anti-Corruption Bill will be introduced and the Government is taking steps to include the ‘Stolen Assets Recovery Initiative (StAR)’ in this Bill, together with the World Bank and the United Nations.
Analysts said the Anti-corruption Bill shouldn’t just be a checkbox exercise to get access to foreign aid. It must be a chance to confront the systemic corruption that has not only made it possible for the political elites to be corrupt but also encouraged it and given them impunity for their actions.
The proposal to this effect submitted by Justice, Prison Affairs and Constitutional Reform Minister Wijeyadasa Rajapakshe was approved by the Cabinet of Ministers at its meeting on Monday.
https://www.ft.lk/front-page/Anti-Corruption-Bill-gets-Cabinet-approval/44-746352
Local Government Elections and the Government’s attempt to prevent it.
(The Morning 12-03-2023)
- Treasury Secy.’s absence at EC meeting criticised, EC asked for fresh date
- Secy. Siriwardana outlines four issues regarding attending EC’s meeting
- EC informed by Treasury Secy. that letter on funds passed on to Minister
- Dolawatte raises privileges issue against SC, Speaker requested to inquire
The Election Commission (EC) last week decided on 25 April as the new date to conduct the Local Government (LG) Polls, in keeping with the Supreme Court’s recent and related order following a meeting with Government Printer Gangani Liyanage, Inspector General of Police (IGP) Chandana D. Wickramaratne, and other relevant authorities, at which Secretary to the Treasury and Finance Ministry Mahinda Siriwardana was absent.
Election Commission Chairman Nimal G. Punchihewa has told the media last week: “We cannot wait until the Treasury releases funds. The Supreme Court order tells the Treasury to release funds. We have asked for funds and if they are not given, we can report it to the Supreme Court. Siriwardana didn’t attend last Tuesday (7). He has informed via a letter that he has to attend a security-related meeting. He has asked for another date to meet.”
He has further said that the new dates had been fixed in consideration of postal voting and the main voting which should be scheduled in a specific time period. The postal voting for the postponed Local Government Elections is likely to be held from 28-31 March. Punchihewa had said that steps were being taken to conduct the postal voting for the polls on the new date.
Opposition legislators had also met members of the Election Commission on Tuesday, during which they had emphasised holding the Local Government Polls as soon as possible.
Meanwhile, Opposition Leader Sajith Premadasa had alleged in Parliament on Tuesday that the Government had purposely prevented the meeting with the Finance Ministry Secretary and the Election Commission scheduled for that morning to discuss the financial matters concerning the holding of Local Government Elections.
According to Premadasa, the Government had prevented the scheduled meeting claiming that there was a National Security Council (NSC) meeting. The Opposition Leader had questioned how a NSC meeting had been held when the President, the Prime Minister, and the Defence Minister were in the Chamber.
Prime Minister Dinesh Gunawardena had however refuted the allegation by saying that the President had come to Parliament after the NSC meeting as he [the Prime Minister] had informed the President he would not attend the meeting.
The letter
Meanwhile, highly-placed sources disputed claims made in Parliament that the Finance Secretary did not attend a meeting with the Election Commission due to a NSC meeting.
Accordingly, it is learnt that a letter was sent to the Election Commission by the Secretary to the Ministry of Finance requesting a later date to meet. In the letter, the Treasury Secretary had highlighted four key points as to why he would be unable to attend the meeting.
1) The Treasury Secretary had not received the determination from the Supreme Court on Tuesday morning prior to the scheduled meeting.
2) Upon receiving the determination from the Supreme Court, the Secretary had stated that he would need to discuss the determination with the Attorney General.
3) Prior to attending the meeting, the Secretary to the Treasury had stated that he would have to discuss the matter with the Minister in Charge.
4) It was also mentioned that a previously scheduled Security Council meeting was to be held at the same time as the meeting called for by the Election Commission.
Therefore, it seems that the Finance/Treasury Secretary had outlined four issues regarding attending the meeting, and had requested a fresh date.
This issue had given way once again for concerns as to how the Election Commission hopes to hold the Local Government Elections on the new date without having first consulted the Treasury Secretary.
Meanwhile, Government Printer Gangani Liyanage stated that she had written to the Treasury on Wednesday (8) to release the remaining funds of more than Rs. 300 million to recommence the activities of ballot paper printing for the upcoming Local Government Polls and had forwarded a written request to IGP Wickramaratne requesting the provision of adequate security for the same.
Letter to RW
Finance/Treasury Secretary Siriwardana has also informed the Election Commission that the letter sent to him by the commission requesting the allocation of funds to hold the Local Government Elections has been forwarded to the Finance Minister.
Siriwardana has made this observation in a written response to the Election Commission following the letter sent by the commission to the Treasury Secretary last Tuesday. It is learnt that the Treasury Secretary has informed the Election Commission that his (Siriwardana’s) approval alone would not be sufficient to allocate funds for polls given the current situation in the country. Hence, the Election Commission’s letter seeking funds to hold the polls is now with President Wickremesinghe, who is also the Finance Minister.
Controversy over Judiciary
However, the drama over the holding of Local Government Elections last week resulted in a governing party legislator alleging that the Supreme Court had violated parliamentary privileges through a recent directive given in relation to a case on the holding of the much-discussed Local Government Elections.
SLPP MP Premnath C. Dolawatte had said that Parliament was empowered to act in instances of violation of its powers and privileges as per Article 4 (c) of the Constitution. He had told the House on Tuesday (7) that a point of privilege had arisen from the injunction SC (FC) No. 69/2023 issued on 3 March.
Quoting from the Constitution, Dolawatte had noted in detail that Parliament had financial control of the State. An injunction issued by a panel of Supreme Court judges had attempted to nullify the non-violable powers vested in Parliament and in breach of a principle of natural justice, the MP had noted.
According to Dolawatte, the matter of the Local Government Elections is an affair of Parliament with a proposal already in the agenda to form a select committee, and the judges have disregarded that despite it being noted by the Attorney General. He had further observed that the court had disregarded an affidavit submitted by the Finance Secretary about a lack of funding, which was a violation of traditions that would lead to anarchy of the Judiciary.
Dolawatte had said the Minister in Charge of the subject of Finance was responsible to Parliament, which controls public finance, and that the Interim Order by the Supreme Court attempted to prevent the implementation of these laws and made the control of public finance by Parliament a nullity.
He had also stated that the interim order sought to give effect to the Activity Budget Estimates for 2023, which was not a law nor a legal document, but a summary of the Appropriation Bill for 2023 to assist Parliament during the debate.
However, State Minister of Finance Shehan Semasinghe had also stated last week that the Speaker had agreed to an inquiry into the violation of parliamentary privileges due to the interim order issued by the Supreme Court pertaining to the Local Government Elections.
Semasinghe had said on Friday (10) that the matter had been accepted by the Speaker and had been presented to the Parliamentary Committee on Ethics and Privileges. “It is a serious offence to implement the interim order by the Supreme Court before hearing the said matter and taking a decision,” he had said.
The State Minister had further said that by tabling the letter by the Chairman of the National Election Commission on the matter, he had requested the Deputy Speaker to refer the matter to the Parliamentary Committee on Ethics and Privileges to conduct an inquiry. Semasinghe had also requested the Deputy Speaker to advise all relevant authorities not to take action on the said matter until the Parliamentary Committee on Ethics and Privileges concluded its inquiry on the said matter.
A heated argument had then broken out between the ruling party MPs and the Opposition over Semasinghe’s statement.
Opposition Leader Premadasa had also accused the Government of attempting to postpone the Local Government Elections by pressurising the Judiciary, which had given a clear verdict to conduct the election.
Demanding polls
In the run-up to last week’s episode on pushing for Local Government Polls, Opposition parties – the Samagi Jana Balawegaya (SJB), National People’s Power (NPP), Tamil National Alliance (TNA), Sri Lanka Muslim Congress (SLMC), All Ceylon Makkal Congress (ACMC), Tamil Progressive Alliance (TPA), and breakaway factions of the Sri Lanka Podujana Peramuna (SLPP) – had jointly written to the Election Commission on Sunday (5), demanding that the Local Government Elections be held on or before 19 March, fulfilling the undertaking given to the Supreme Court by the Election Commission.
The letter sent by the Opposition parties addressed to Commission Chairman Punchihewa and its members stated: “Now that the SC has removed the only impediment to holding the election according to law, it is your imperative duty to conduct the said election on or before 19 March 2023. We do not see any reason why you should consult the Secretary to the Treasury or anyone else, now that they are bound to comply with the interim order issued by the SC as aforesaid. We, therefore, request you to re-fix the date of the LG Elections to a date before 20 March 2023 as required by law or the earliest possible date without any further delay. You should not prevaricate on the pretext of consultation with anyone.”
The letter further noted: “We write consequent to the order of the SC made on 3 March 2023, in SC FR 69/2023 restraining the Minister of Finance, the Secretary to the Treasury, and others from withholding necessary funds for the conduct of the LG Elections that was scheduled to be held on 9 March 2023. The court has also made a further order to the Government Printer with respect to the printing of ballot papers. You gave an undertaking in SC Writ 6/2023 and SC Writ 7/2023 that you will hold the said elections according to law. You are aware that according to law, the said elections should be held on or before 19 March 2023. When the Secretary to the Treasury and the Government Printer did not cooperate with you, you filed a motion in the aforesaid two cases seeking the court’s direction on them.”
The NPP meanwhile has requested the Election Commission to take necessary measures immediately with regard to the Local Government Elections based on the Supreme Court verdict and fix an early date for the election.
NPP Secretary Dr. Nihal Abeysinghe in a letter to the Election Commission has stated that the Supreme Court in its verdict has observed that conducting the LG Polls is a fundamental human right considering the importance of the said election.
RW Govt. gears up to finalise IMF deal
(The Morning 12-03-2023)
- China’s latest assurance on SL debt restructuring brings IMF deal closer
- Govt.-India in agreement to extend $ 1 b credit line by a few months
As Sri Lanka nears the one-year mark of last year’s Aragalaya people’s power protest campaign, the country’s economic revival seems to be finally on track with the appreciation of the Sri Lankan Rupee and economic activities showing positive signs following news of the proposed International Monetary Fund (IMF) deal likely to be finalised this month.
However, the public’s agitation over the ongoing hardships seem far from over, with Opposition parties, civil society, trade unions, and university students taking to the streets over a plethora of demands. It would therefore be correct to say that the challenges faced by the Ranil Wickremesinghe Government are far from over.
Nevertheless, there was some respite for the Government with the receipt of the latest letter by the China Export-Import Bank on Monday (6), expressing commitment to Sri Lanka’s debt restructuring programme. The letter by the Export-Import Bank of China was signed by the Bank’s Vice President, Zhang Wencai.
“We hereby express our firm support to Sri Lanka through a debt treatment. This would be in line with the goal/objective of restoring public debt sustainability consistent with the envisaged IMF-supported programme and delivered through financial operations negotiated between our two sides. In view of the time needed for Sri Lanka to complete the debt treatment negotiation, in order to end your default status as soon as possible, and pave the way for the country’s economic recovery and debt sustainability restoring, the bank is going to provide an extension on the debt service due in 2022 and 2023 as an immediate contingency measure based on your request, which means you will not have to repay the principal and interest due of the bank’s loans during the above-mentioned period, so as to help relieve your short-term debt repayment pressure.
“Meanwhile, we would like to expedite the negotiation process with your side regarding medium- and long-term debt treatment in this window period, with a view to finalising the specifics of a debt treatment in the coming months, based on the principle of active communication, friendly discussion, mutually-beneficial, and win-win cooperation. We will make our best efforts to contribute to the debt sustainability of Sri Lanka,” the letter has stated.
The letter has further stated: “The bank will support Sri Lanka in your application for the IMF Extended Fund Facility (EFF) to help relieve the liquidity strain. In the meantime, adequate contributions from all the creditors would be a critical condition for a speedy solution as desired by all the parties. We will continuously call on commercial creditors (including the international sovereign bondholders) to provide debt treatment in an equally comparable manner, and encourage multilateral creditors to do their utmost to make corresponding contributions, to help you better respond to the crisis and emerge from it.”
Following the latest assurance received by the Chinese, President Wickremesinghe informed Parliament that Sri Lanka was expecting IMF Board approval by the end of the month after its largest bilateral creditor gave written support for debt restructuring via the Export-Import Bank of China on Monday (6). He said the Government had received the letter of assurance from the Chinese Exim Bank the previous night and the letter of intent signed by the Central Bank Governor and the President had been sent to the IMF the same night.
Meanwhile, US Treasury Secretary Janet L. Yellen on Monday spoke with President Wickremesinghe and expressed support for Sri Lanka’s steps towards an IMF-supported programme to advance economic reform and achieve a strong and durable recovery.
According to the US State Department of Treasury, the Secretary welcomed Sri Lanka’s commitments to transparency and comparable treatment for all bilateral official and private creditors.
IMF Chief Kristalina Georgieva said on Twitter: “I welcome the progress made by Sri Lankan authorities in taking decisive policy actions and obtaining financing assurances from all their major creditors, incl. China, India and the Paris Club.” She added that she looked forward to presenting the IMF-supported programme to the Executive Board on 20 March.
“Sri Lanka has now received financing assurances from all major bilateral creditors. This paves the way for consideration by the IMF’s Board on 20 March the approval of the Staff-Level Agreement reached on 1 September 2022 for financing under an Extended Fund Facility. Approval by the board would also catalyse financing from other creditors, including the World Bank and the Asian Development Bank. The arrangement will support the authorities’ programme of ambitious reforms that they have already embarked upon, which will help Sri Lanka emerge from its current crisis and set it on a trajectory of strong and inclusive growth,” the IMF stated on Tuesday (7).
Sri Lanka is making good progress towards unlocking the IMF bailout package but its Restricted Default (RD) status will only come off after the debt restructuring process reaches completion, rating agency Fitch had stated on Friday (10). “Sri Lanka’s post-default ratings would depend upon our assessment of its credit profile. If the key parameters for returning to debt sustainability under the IMF programme allow for a moderate and extended debt reduction process, this could facilitate debt restructuring talks but may weigh on the sovereign’s post-default credit rating,” Fitch said in a statement.
Meanwhile, Reuters last week reported that Sri Lanka was negotiating with India to extend a $ 1 billion credit line by a few months. The news report, quoting sources, has stated that the credit line is due to expire on 17 March, with Sri Lanka having used only about two-thirds of it, mainly for medicines and food.
A source at the Sri Lankan Finance Ministry has also been quoted as saying that the Government wanted to extend the credit line by 6-12 months because there was about $ 300 million of it left unused. By Thursday (9), an agreement had been reached on the extension.
Trinco Oil Farm- and related issues
(From The Island 8-03-2023)
New move on Trinco oil tank farm
Having participated at the China Bay parade, President Wickremesinghe, accompanied by National Security Advisor and Chief of Presidential Staff, Sagala Ratnayake, and several others, including Power and Energy Minister Kanchana Wijesekera, toured the Trincomalee Oil Tank Farm, consisting originally of 100 tanks, situated in 827 acres of land. The tank No. 91, however, was destroyed in Japanese air attacks, launched by ship-borne bombers, and attack aircraft, during World War 11. President Wickremesinghe is the first head of state to visit the Oil Tank Farm since Sri Lanka handed it over to Lanka Indian Oil Company (LIOC) during his previous tenure as the Prime Minister. The Oil Tank Farm is situated in China Bay. Managing Director of LIOC, Manoj Gupta, was there to welcome President Wickremesinghe.
In terms of the agreement, finalized on 07 February, 2003, during Chandrika Bandaranaike Kumaratunga’s tenure as the President, the LIOC took over the 99 oil tanks, each capable of holding 12,300 tonnes (1 tonne =1,000 litres) of fuel. The upper and lower tank farms consist of 85 tanks and 14 tanks, respectively.
On behalf of Sri Lanka, the then Secretary to the Treasury, Jayampathy Charitha Ratwatte ,signed the agreement, operative for a period of 35 years. In fact, the Trincomalee facility is so far covered by three agreements, namely (i) the Indo-Lanka Accord of 29 July, 1987, signed by President JRJ and PM Rajiv Gandhi (ii) the agreement on taking over of possession and related matters of the China Bay installation of the Ceylon Petroleum Corporation (CPC), signed on 07 February, 2003, and (iii) comprehensive agreement on cooperation in economic projects, finalized on 26 April, 2017, by Indian External Affairs Minister Sushma Swaraj and Development Strategies and International Trade Minister Malik Samarawickrema.
President Wickemesinghe declared, at China Bay, in no uncertain terms, the urgent need to go ahead with the Oil Tank Farm development project.
In line with the government’s overall strategy, President Wickremesinghe recently brought in one-time Navy Commander, Admiral Ravi Wijegunaratne, as the Managing Director of the Ceylon Petroleum Corporation (CPC), and to its Director Board as President’s nominee, and also as Chairman, CPC Trincomalee Oil Tank Farm Development Company. The Director Board consists of eight-four each from Sri Lanka and India. The CPC /LIOC venture is meant to speed up the entire process. National Security Advisor Sagala Ratnayake is working on this project.
Of the 99 tanks, 61 tanks are empty. President Wickremesinghe is keen to restore the unused 61 tanks to working condition. Would it be possible to store here what can be safely called the strategic Indian oil reserves?
Indian response to the 80s threat
On 29 July, 1987, President JRJ and Premier Rajiv Gandhi exchanged letters which dealt with the Trincomalee Oil Tank Farm as part of the controversial Indo-Lanka Accord. They essentially addressed security issues, against the backdrop of the then growing Indian concerns that foreign military, and intelligence personnel, posed a serious threat to India. India never acknowledged that Sri Lanka wouldn’t have had to seek foreign military assistance if not for its then Premier Indira Gandhi launching a destabilisation project here by covertly training Sri Lankan Tamil armed groups, as a direct counter to then Sri Lankan President JRJ’s overt pro-Western stand, by even offering Trincomalee as a base to Washington.
India included the Trincomalee Oil Tank Farm in the agreement that was meant to bring the situation under control. But, at the end of its direct intervention, India had lost 1,300 officers and men, over double that number wounded, and Rajiv Gandhi himself was blown up, in Tamil Nadu, by a female Tiger suicide bomber. It was the price India paid for interfering in Sri Lanka’s internal affairs.
At the time New Delhi’s hand was also forced by covert Western actions to destabilize and, possibly, break up India, by backing various separatist groups there. So, in a way, the Tamil separatist movement here was hijacked by the West to sow discord in India, where there are more than 60 million Tamils. The West, led by the USA and the UK, was all out to finish off India, even using Pakistan as a proxy because it was seen as being too close to the then Soviet Union. But they were halted, in their tracks, because of the solid backing that New Delhi received from Moscow, the then countervailing military power. Later, with the collapse of the Soviet Union, in the late 80s, the West found a new convenient mortal enemy in Islamic terrorists, who were in the first place incubated, in Pakistan and Afghanistan, by Washington, to chase out Russians from the latter, with the backing of wealthy Arab countries, like Saudi Arabia.
So those in Delhi should be aware that if there was no China, India would have been the West’s current number two target, after Russia. These pale faces are essentially and, undoubtedly, evil, especially if one looks at what they have done around the world by plundering and enslaving the weakest, while outwardly professing ‘all men are created equal’. At least the Russians, after their October revolution, helped to free many of the enslaved colonies. All those colonies were given independence, for fear of the spread of Communism, and certainly not because the colonial powers suddenly became enlightened.
Let me reproduce the letter, dated 29 July, 1987, signed by Rajiv Gandhi.
” (1) Conscious of the friendship between our two countries, stretching over two millennia, and more, and recognizing the importance of nurturing this traditional friendship, it is imperative that both Sri Lanka and India reaffirm the decision not to allow our respective territories to be used for activities, prejudicial to each other’s unity, territorial integrity and security.
(2) In this spirit, you had during the course of our discussions, agreed to meet some of India’s concerns as follows: (i) Your Excellency and myself will reach an early understanding about the relevance and employment of foreign military and intelligence personnel with a view to ensuring that such presence will not prejudice Indo-Sri Lankan relations; (ii) Trincomalee, or any other ports in Sri Lanka, will not be made available for military use by any country in a manner prejudicial to India’s interests; (iii) The work of restoring and operating the Trincomalee Oil Tank Farm will be undertaken as a joint venture between India and Sri Lanka; (iv) Sri Lanka’s agreement with broadcasting organizations will be reviewed to ensure that any facilities set up by them in Sri Lanka are solely used as public broadcasting facilities and not for any military or intelligence purposes.
(3) In the same spirit India will: (i) Deport all Sri Lankan citizens who are found to be engaging in terrorist activities or advocating separatism or secessionism (ii) provide training facilities and military supplies for Sri Lankan security forces
(4) India and Sri Lanka have agreed to set up a joint consultative mechanism to continuously review matters of common concern in the light of the objectives stated in para 1 and specifically to monitor the implementation of other matters contained in this letter.
(5) Kindly confirm Excellency that the above correctly sets out the agreement reached between us. Please accept, Excellency, the assurances of my highest consideration.”
India raised concerns particularly over US and Israeli presence in the 80s. But, today, India is part of the Quadrilateral Security Dialogue (QSD), widely known as the Quad, formed to meet what the US, Japan, Australia and India perceived as the growing Chinese challenge. Sri Lanka is caught up in the Quad politics due to heavy Chinese investments here, particularly the leasing of the Hambantota Port, for a period of 99-years, to China, in 2017, by the Yahapalana government. But what is really interesting is that the same government finalized a wide ranging memorandum of understanding for cooperation in economic projects, on 26 April, 2017, with India, that covered the Trincomalee Oil Tank Farm, eight months before China secured 85 percent of shares in the Hambantota Port for USD 1.12 bn.
Media management in armed forces
While the writer was working on the presentation for JNSC, the US embassy, in Colombo, in a joint press release with Sir John Kotelawela Defence University (KDU), dealt with the launch of a publication, titled ‘A Shared Vision for the Indo-Pacific: Implications for South Asia,” edited by Dr. Harendra Vidanage, at the Cinnamon Grand, one of the hotels targeted by the Easter Sunday bombers.
Vice Chancellor of the General Sir John Kotelawala Defence University, Major General Milinda Peiris, was among those present, along with US Ambassador here Julie J. Chung.
The joint statement quoted Rear Admiral (ret.) Peter A. Gumataotao, of the USN, as having told the gathering: “What is at stake is our ability to respond to activities that undermine the values and principles of a free and open Indo-Pacific. Competition is good, but when rules are changed, the process should be transparent and agreed on. The US embassy is busy promoting a shared vision for the Indo-Pacific. It would be pertinent to mention that the US embassy issued statements in Sinhala, Tamil and English. Obviously, the media management is part of their operation. A few days before the Cinnamon Grand event, Ambassador Chung visited Parliament. She was there to welcome the appointment of new office-bearers of the Sri Lanka-US Parliamentary Friendship Association. Rebel SLPP MP Chandima Weerakkody was elected the President of the Association.
Sri Lanka seems to be in a catch 22 situation. Contrary to repeated assurances that Sri Lanka wouldn’t take sides in China vs Quad, Sri Lanka appears to be already tilted towards the US-led grouping. The proposed operationalization of the Trincomalee Oil Tank Farm should be examined against the Quad operations. Economic ruination has paved the way for external interventions as Sri Lanka struggled to cope up with growing challenges.
The armed forces and police find the situation tough as media manipulations continue. India is now part of the overall US political-security-economic policy. India actually encourages Sri Lanka to be part of the US-led club but there can be certain concerns. Unfortunately, the Opposition has conveniently missed key factors in the strategic Indo-Pacific project. The status of India-US relations is at its zenith, therefore our giant neighbour wouldn’t mind even if Sri Lanka signed the Status of Forces Agreement (SOFA) with the US. The Americans prefer to call the SOFA Visiting Forces Agreement (VFA).
Sri Lanka entered into the Acquisition and Cross-Servicing Agreement (ACSA) in August 2017 during Maithripala Sirisena’s tenure as the President. Perhaps those responsible for national security should study the circumstances President Sirisena gave into pressure that was brought to bear on him by Sri Lankan Ambassador in Washington at that time, Prasad Kariyawasam, to renew ACSA, in early August 2017. Sri Lanka first signed the ACSA in March 2007. It expired in 2017. The Yahapalana partner obviously had no objection. SOFA was first signed in 1995 during CBK’s presidency. Apparently, the United States asked Sri Lanka for a new pact and sent a draft to the Sri Lankan Ministry of Foreign Affairs, in August 2018. SOFA, however, is on hold.
The Millennium Challenge Corporation Compact (MCC) – a project worth USD 480 mn (Rs 89 bn) – was torpedoed by a committee, headed by Prof. Lalithsiri Gunaruwan, in February 2020. The economist didn’t mince his words when he declared ACSA, SOFA and MCC could be part of the US-Indo Lanka strategy.
Political leadership, regardless of the party in power, appears to have continuously failed to examine developments/situations/events properly. For the first time such a report was prepared in Sinhala.
The government media needs to closely study developing situations. With the emergence of social media, in the past decade, as an extremely powerful tool, media management has become a tough task. Situations cannot be tackled by simply issuing statements, or trying to suppress information.
A cohesive system is required to address issues at hand. Perhaps, those handling media will have to work outside official channels to overcome challenges.
Sri Lanka’s growing dependence on foreign powers to meet its needs, ranging from essential items, including medicines, school uniforms and defence requirements, in a way portends long term problems. Sri Lanka should be certainly grateful for international support but also mindful of other factors.
A recent statement, attributed to Deputy Indian High Commissioner, Vinod K. Jacob, underscored the status of Indian assistance. Jacob declared that India offered as many as 1,500 training slots, annually, to Sri Lanka, at an annual cost of USD 7mn. Jacob was addressing a group of Indian Navy trained Sri Lanka Defence Forces personnel, on board INS Sukanya, on February 28.
Referring to India’s much-touted ‘Neighbourhood First’ policy, Jacob mentioned a five-point plan to take Indo-Lanka relations to the next level. The Indian HC quoted Jacob as having said: “First is the potential for economic and financial cooperation by building on the Indian support to the people of Sri Lanka, in 2022, to the tune of USD 4 billion. The focus could be laid on areas, such as trade in national currencies, ease of investments and strengthening financial cooperation. Second, the two sides are working towards increasing air, ferry, digital and energy connectivity. Third, a new type of development cooperation partnership building on the existing multi-billion portfolio, with special emphasis on vulnerable communities, is required. Fourth, both sides need to enhance people to people exchanges, particularly in tourist movements. Fifth, it is essential to strengthen the cultural, religious, music, movie and sporting links for mutual benefit.”
Sri Lanka needs to develop a strategy of its own, drawing support from the international community. The current economic-political-social crisis should be addressed, without further delay. The failure to reach a consensus, on Local Government polls, can cause a protracted political conflict that may undermine the overall efforts to restore economic stability.
https://island.lk/prez-takes-trinco-oil-tank-farm-to-next-level/
Semasinghe’s request on privilege issue raised over SC interim order on LG polls
(Adaderana 10-03-2023)
State Minister Shehan Semasinghe has requested the Deputy Speaker of Parliament to instruct relevant authorities not to act on the interim order issued by the Supreme Court regarding the 2023 Local Government polls until the inquiry carried out by the Parliamentary Committee on Privileges comes to an end.
Furthermore, he also asked the letter sent to the Finance Minister by the Election Commission Chairman, to be referred to the Parliamentary Committee on Privileges.
The state minister made these remarks referring to the issue of privilege raised by MP Premnath C. Dolawatte in parliament recently regarding the Supreme Court’s interim order pertaining to the Local Government election.
MP Dolawatte on Tuesday (March 07) told the House that the powers and privileges of the parliament have been violated by this interim order.
On March 03, upon considering a petition filed by SJB’s General Secretary Ranjith Madduma Bandara, a Supreme Court judge bench issued an interim order directing the Secretary to the Finance Ministry and the Attorney General, preventing them from withholding the funds allocated for elections in the budget 2023.
Delivering a statement in parliament today, State Minister Semasinghe further noted that the Speaker Mahinda Yapa Abeywardena has accepted the question of breach of privileges raised by MP Dolawatte and that the matter has been presented it to the Committee on Parliamentary Ethics and Privileges.
“It is a serious offence to implement the interim order of the aforesaid case before hearing the said matter and making a decision,” the lawmaker stressed.
He added that by tabling the letter of the chairman of the Election Commission, he seeks the Deputy Speaker to refer the same matter to the Committee on Parliamentary Ethics and Privileges to conduct an inquiry. This letter has further breached the privileges of the members of this House.
“Further, by raising this privilege matter, I request the Deputy Speaker to advise all relevant authorities not to proceed further or take any action on the interim order until the committee concludes its inquiry.”
Commenting on the privileges matter raised by the government MPs, the opposition raised deep concerns about attempts to pressurize the judiciary and further defer the Local Government election.
A heated debate ensued between the lawmakers of the ruling party and the opposition in parliament today over the privileges matter.