to present peace plan to UN
Addresses New York Stock Exchange on Sept 20 l Nearly 100 US CEOs
to visit Colombo in March
By Feizal Samath
Lankan Prime Minister Ranil Wickremesinghe, preparing to visit the
United States next week, will unveil to the world an ambitious plan
for peace and economic stability at the United Nations later in
September, government and private sector officials said.
The focus of
the UN trip is an address to the general assembly on September 19
followed by a presentation to the New York Stock Exchange the following
day where Wickremesinghe will talk on Sri Lanka's potential as an
showcase Sri Lanka and demonstrate what its true potential is and
ask the world community to recognise it as a country coming out
of conflict,'' Chandra Jayaratne, chairman of the Ceylon Chamber
of Commerce told The Sunday Times Business.
The CCC is
sending a business delegation along with the PM. The chamber, UNDP
here and the UN office in New York, the Prime Minister's office
and SriLankaFirst - the business-peace group, are also involved
in preparatory work for the UN programme.
Minister Milinda Moragoda confirmed Wickremesinghe's UN visit but
said he didn't have details. Moragoda flew to Washington yesterday
to prepare for the PM's July visit in addition to joining the Prime
Minister on that tour.
The PM's office
along with other partners will also host a business visit next March
in Colombo by a group of some 100 CEOs of US firms looking at investment
The CCC with
help from the American Chamber of Commerce in Colombo is preparing
a list of 20 projects for presentation at the UN general assembly
as potential areas for investment. They include infrastructure like
power, roads, airports, railways, telecommunications, water and
sanitation; promoting the island as a regional export centre to
sell to India and Pakistan; exports of IT-related services; logistics;
agri-business; marine resources and boat building.
The UN presentation
would be followed by roadshows by a Sri Lankan government cum private
sector delegation in Europe, Japan and South East Asia.
A UN source,
who declined to be named, said UN Secretary-General Kofi Annan's
office was personally involved in the PM's UN visit. "The UN
Secretary-General would endorse the Prime Minister's call and urge
the business community to invest in Sri Lanka," the source
say investors are unlikely to rush to Sri Lanka unless there is
absolute peace. "It is too early,'' said Paikiasothy Saravanamuttu,
executive director at the Centre for Policy Alternatives. "The
peace process has to be taken up to a particular point and stabilised
before investors are going to come out and start giving us money.'"
Wickremesinghe will meet US President George Bush and Secretary
of State Colin Powell during his July 21-25 visit, in addition to
meetings with the heads of the World Bank and International Monetary
Minister Tilak Marapana has ordered the Commissioner of Motor Traffic
to dispense with examining new and re-conditioned motor vehicles
when initially registered in a significant move aimed at improving
efficiency at the department
also follows representations made by Berty Widanagamage, President
of the Motor Vehicle Importers' Association, to streamline work
at the department. After a meeting called by Marapana on June 29
at the department, the minister last week directed that the registration
process should also be simplified with "vehicle numbers to
be assigned immediately upon presentation of the application for
He also minimised
procedures relating to the transfer of vehicles and ordered that
driving schools - under attack because of the rising number of fatal
accidents due to bad driving - should be effectively monitored and
centres - along with the RMV - would be set up for the testing and
issuing of driving licences in Colombo with three locations already
identified, Marapane said adding that "examiners of motor vehicles
should be cautioned to be careful in assessing the competence of
the drivers to be issued with licences".
alerts trading in banking stocks
trading in banking stocks over recent months has forced the Central
Bank of Sri Lanka (CBSL) to warn local banks to be vigilant to ensure
shareholders do not purchase bigger stakes than financial laws allow.
At a meeting with bank chiefs last month, CBSL officials stressed
the need for banks to check that individual shareholdings do not
exceed 10 percent of issued capital - the level at which approval
must be sought from the CBSL and the Minister for Finance. The banking
sector has been at the forefront of the share market's gains in
recent months. Commercial Bank shares have risen about 60 percent
this year while DFCC is up about 50 percent. Deputy general manager,
finance and planning at Commercial Bank, Ranjith Samaranayake, said
investors have recently been paying "exorbitant prices"
for bank shares, including Commercial Bank. While it encourages
more people to invest in its shares, Samaranayake said Commercial
Bank would now "strictly monitor" trading. "If anybody
has violated these provisions by buying our shares we will simply
refuse to register them. If we have reasonable grounds to believe
that somebody has purchased our bank shares as the nominee of another
person we will aggregate them and will refuse to register anything
above 10 percent without [the necessary] approval. This will be
implemented uniformly for everybody, including foreigners,"
The need for
banks to monitor trading in their shares is nothing new. The Banking
Act has for years required banks to ensure that individual shareholdings
greater than 10 percent must seek their necessary approval. Asked
why the Commercial Bank now felt the need to declare its vigilance,
Samaranayake said: "No one was buying shares like this so there
was no need for us to follow it." Although Commercial Bank
has so far not detected anybody breaching the 10 percent limit,
"the possibility is always there," he said. Samaranayake
would not say whether Commercial Bank was investigating any particular
instances of trading in its shares, but sources at the bank said
it has identified individual shareholders about whom it is concerned.
There is also a belief in the bank that the prices being paid for
its shares are so high - and so far from reasonable valuations -
that some investors must be acting for strategic reasons.
shareholders are often able to get around the restrictions by buying
shares through investment vehicles to which they are apparently
chief executive Anil Amarasuriya said changes may be needed to make
these vehicles more transparent.
might be certain ownership details sought from the funds,"
he said. Sampath is perhaps the best-known example of a bank challenging
the conduct of its shareholders. In mid-2000, Sampath alleged that
Hatton National Bank, acting in concert with one of its major shareholders,
Harry Jayawardena's Stassen group of companies, had acquired more
than 30 percent of shares in Sampath, thereby breaching a number
of statutory limits including the 10 percent rule. Sampath has successively
argued its case in court and the case is currently in appeal.
LTTE prepares NE development plan
Tamil Tiger guerrillas have prepared a development plan
for Sri Lanka's north and the east with the help of the Tamil Diaspora,
a senior private sector official said.
hoping to get a copy of the plan to study it," said Chandra
Jayaratne, chairman of the Ceylon Chamber of Commerce. Jayaratne
steps down later this month as CCC chairman with AMW chief Tilak
de Zoysa taking over as chamber head.
the chamber has been invited to be the "scorekeeper" for
the government's Poverty Reduction Strategy (PRS) and the Triple
R project (Relief, Rehabilitation and Reconstruction).
Intelligence Unit will monitor the progress of these two programmes,"
The CCC has
also been invited to be represented on the national operations room
to be set up in July by the government. This ops room would monitor
all development projects undertaken by the state and make sure they
keep to schedule.
tariffs hurt producers
Sri Lanka's biggest cement producer has condemned the government's
decision to reduce the industry's tariff protection as a result
of the Indo-Lanka Free Trade Agreement (FTA), warning the move illustrated
the sort of unpredictable decision-making which could deter potential
foreign investors in the country.
managing director Tim Mackay said the decision to reduce the tariff
on cement imported from India to 6.5 percent from eight percent
provided "a pretty scary signal" to international investors.
The two major
foreign cement manufacturers in Sri Lanka - Holcim and Tokyo Cement
- have together invested about $100 million in the country on the
basis of assurances from the previous government that the eight
percent tariff would remain in place for as much as eight years,
negotiations with Indian officials, the Minister for Trade, Ravi
Karunanayake, last weekend announced the tariff would be reduced
this year as part of a package of new measures under the FTA.
he recognised the government had to provide a major concession to
India in return for Sri Lankan garment manufacturers being granted
easier access to the sub-continent.
a major investor in this country. I'm clearly disappointed that
the cement industry's meagre protection is what has been traded
off," he said. Mackay said he recognised that the minister
had sought the best outcome from the negotiations, after India has
pushed for the cement tariff to be reduced to as low as five percent.
But he said
his concern was not so much the change itself as government's willingness
we need is certainty. An investor can't come here on this basis
and that is what worries me."
looking at establishing new businesses in Sri Lanka would have to
look very carefully at these sort of decisions, he said. "I
think it sends some pretty scary signals."
Holcim - formerly
Puttalam Cement - has invested about $ 60 million in Sri Lanka since
it commenced operations in 1996 through the Board of Investment.
a subsidiary of the Swiss-based multinational Holcim Group, directly
employs more than 800 people. Mackay said local cement producers
would now have a harder time competing with Indian companies which
are themselves subsidised by their government.
reduction in the tariff] hurts but it's manageable," he said.
the chief executive of the Sri Lankan arm of India's Ambuja Cement,
said that although it was too early to be sure, he did not think
the reduction in tariffs would force the company to close its Sri
Lankan manufacturing operation and rely instead in imports.
spent millions but have not yet broken even. We're increasing our
market share," he said.
Larsen and Toubro, the other major Indian cement company operating
in Sri Lanka, are understood to be the only cement producers in
the sub-continent that have their own export facilities.