“Sri Lanka Tourism running out of cash”
With reference to last week’s article under the above headline carried in the Business Times, the chairperson of the Sri Lanka Tourism Development Authority (SLTDA) has sent us the following letter:
“Sri Lanka Tourism has no shortage of cash i.e., LKR/Rupees, the legal tender in Sri Lanka. However, the country has run out of dollars with which events overseas need be paid for.
The report states “US dollars 1.6 million had been remitted to a dollar account of SLTDA”. A categorical statement. Later, in the same article this confidence is contradicted – “if this amount had been received”.
This statement of supposed fact is incorrect. Most funds collected for the Covid insurance were collected in LKR as travel agents and hotels claimed they did not have US dollars, also it was costly to transfer in US dollars.
They further requested credit periods to pay even the rupees. Several travel agents and hotels have still not paid Sri Lanka Tourism although we have paid the insurance company. These names appear as debtors in SLTDA records.
The article refers to credit facilities being extended from trade show organisers. In the absence of dollars in the banking system, even though SLTDA has the cash to buy the dollars, of course any institution would request credit facilities for foreign currency payments, in the interests of the industry so that they could participate in the show.
The article states that rupees have been remitted to the Sri Lankan Foreign Ministry for the embassy in Dubai to represent the country at the Arabian Travel Mart. Foreign trade shows unfortunately do not accept payment in rupees.
The writer refers to the basis of the insurance covers as a “revelation.” It may be so to the writer, but full details of the public tender that was issued in 2020 and details of insurance cover available to the industry and international traveler since January 2021.
The writer further states “usually the Treasury makes annual allocations for administration and staff welfare in the annual budget.” This is also incorrect. This is common knowledge amongst those associated with the tourism industry.”
Business Times response: Yes we erred when we should have referred to a ‘shortage of dollars’ (not local cash).
However the SLTDA is not totally correct to say that the insurance payments were all made in local rupees, as payments from January to April 2021 were made in US dollars and the total commission received by SLTDA during that period was $48,289. It was only after that, that payments were made in rupees.
Furthermore online insurance payments by tourists are said to be still made in a foreign currency.
Ironically in a statement of clarification as late as May 9, 2022, the SLTDA said the insurance payments were made in US dollars when at that time it was being made in local rupees, and this statement could have made that distinction.
The May 9 statement read: “… People’s Insurance PLC provided the COVID-19 insurance at a sum of USD 12 (cost of insurance USD 8.5 + commission USD 3.5) and they have increased the insurance cover up to USD 75,000.
The USD 3.5 received by SLTDA has been duly accounted for and is being used for administration, promotion and staff welfare.”
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