News

Is ex-parte just and fair?

By Chanakya Dissanayake

Ex- Parte Stay Orders are issued against factories alleged of environmental pollution and public nuisances.

Under the Public Nuisance Act , magistrates can issue orders to close down factories with immediate effect, pending inquiry. Industry sources protest that , ordering factories to close after considering only the complainants side of story, can often be unfair from industry point of view. This is mainly because the industries most of the time do not get a chance to presenting independent evidence to counter complainants claims.

The issue came into light especially after The Homagama Magistrate issued an Ex-Parte Stay Order closing down Hanwella Rubber Products factory, on 18th September 2000. This was based on a complain of four persons living in the vicinity of the factory, that the factory is polluting the environment.

The MD of Hanwella Rubber Products said, " The Magistrate issued a Ex-Parte Stay Order closing down Hanwella Rubber Products factory, BOI company, on 18th September 2000. This was based on complaint four persons living in the vicinity of the factory, that the factory is polluting the environment.

The MD of Hanwella Rubber Products said, "The Magistrate issued the order based on the affidavits filed by the complainants. The factory complex has availed Environmental Protection Licence issued by the CEA. We were not given a chance of presenting independent evidence to the contrary and the factory was subsequently closed for a week until the magistrate visited the sit e and lifted the Stay Order on 26th September. We suffered a loss of approximately Rs10 million in foreign exchange terms during the week of closure", he added. Subsequently, the company entered into a dialogue with the complainants and found out that the real reason for the protest is based on the fact that the factory is located in a residential area. "We agreed on a compromise. We are hoping to relocate the factory to a lesser populated area within a time period of one to two years. It will cost at least Rs130million to relocate.

This can happen to any factory in Sri Lanka. The existence of a law that stated that magistrate can issue an order to close down a factory, merely on a complainant of two or more individuals will do nothing to improve investor confidence in Sri Lanka", Mr Dharmasena added.

When giants meet its no small deal

Keells Business Systems Limited (KBSL) developing video conferencing software for intimate apparel exporter, MAS Holdings is just the initial step in their joint march forward in the information superhighway, making the twosome one of the most formidable partnerships to be reckoned with.

Mr. Mahesh Amalean, the media shy CEO of the group said that point to point video conferencing was already available but not enough for the company, who is the largest supplier to top US label Victoria's Secret. 

'We waited until the country had the kind of service we wanted (multi point video conferencing). It makes it that much easier to discuss the points in a garment when you have video conferencing."

"Anyway our relationship won't stop with video conferencing," Amalean said in a concise presentation matched by JKH, board director, Mr. Ajith Gunawardena who said that Amalean 's MAS Holdings was Sri Lanka's best run and possibly the largest company in his five minute speech. 

This was promptly disputed by Amalean who rightly identified JKH as our largest listed conglomerate.

The US$ 350,000 video server has the ability to display up to 16 different locations on a single video screen cutting down time and costs drastically and in fact transporting decision making onto an entirely more efficient platform. 

The Lucent Technologies multi point conferencing server and pictured video endpoints connect 16 domestic offices, factories and other MAS Holdings overseas partners at speeds of up to 384 K providing real time video conferencing. 

KBSL was recently appointed distributor for Picturetel Products in Sri Lanka. KBSL also represents Lucent Technologies and Avaya Communications for the range of Business communications inclusive of PABX, Call Centers, IVR, CTL Unified Messaging and Video Solutions.

MAS Holdings who started 13 years ago employs 13,500 workers and executives to make apparel that make men catch their breath in intimate moments. The success of their company was several partnerships forged with big time international intimate apparel and foundation garment makers, Amalean said.

Their first partnership was with Mast Holdings in USA. Next came Triumph of Germany followed by Courtaulds Textiles of UK. The technology transfer and the top of the range textile, accessories and plant and machinery infusion by the partner had made MAS Holdings number one in the intimate apparel export trade.

Tri Star Employees donate days pay to army

The Tri Star Group in consultation with the Army imported Rs 1, 649,083/- worth of Army camouflage material utilising the funds collected. 

The consignment of this camouflage material was recently handed over to the Army Commander Lt. Gen. Lionel Balagalle by a delegation of Executives and a cross section of Employees of Tri Star led by its Chairman Deshabandu Kumar Dewapura at the Army Headquarters recently.

Mr Dewapura told Mr. Balagalle that there was a tremendous response from Tri Star employees towards the appeal made by the Company to assist our heroic Armed Services personnel who are defending the country. On several previous occasions too Tri Star Group has assisted the service personnel and their dependents through various programmes and donations made. Lt. Gen. Balagalle said he wished to thank the Chairman of Tri Star and all employees for the donation on behalf of all service personnel says a news release. 

eRunway poised to take off

Headquartered in Boston, MA, USA, eRunway operates several Advanced Technology Centres (ATC's) including Colombo, Sri Lanka, and Hyderabad, India. Working exclusively for the US, eRunway builds cutting-edge Internet and Mobilenet solutions for the New Economy. "Our collaborative processes mandate that software groups work closely together, communicate over high speed dedicated intra-company communication lines, spend time in the US, and innovate faster for our customers,", explained Tushara Canekeratne. 

Over the years, eRunway has adopted stringent hiring criteria, attracted the best software engineering talent, invested in state-of-the art training programs, offered its engineers with advanced formal technology training programmes, and management training programmes. Says Tushara Canekeratne, "these programmes help our engineers enrich their creative output and strive for greater heights innovating technology for the rapidly evolving US technology landscape. At eRunway, our people are very special and our teams are world-class. We work on tier I Internet and Mobilenet projects while helping our customers define the new technology world, says a news release. 

Money Market update First Capital ltd.

The inter-bank call money market and the overnight repo market

Central bank open market operations

As the Central Bank did not offer any term reverse repos and on the back of the renewed liquidity shortfall, the volumes of the overnight reverse window kept at higher levels. 

During the week the Central Bank had to release Rs. 42.8 bn to the market, averaging Rs. 8.56 bn a day, though the reverse repo window. Amidst the increased repo rate, no significant amount was recorded at the repo window. 

Treasury bill auction.

In the bill auction held on 3rd October, Rs. 2413Mn worth of treasury bills were offered to the market. The amounts accepted in the 91 days and 182 days were less than the amount offered and a higher amount was accepted in the 364 days. 

Given the renewed pressure on the inter-bank money market and the unchanged investor sentiments the treasury bill yields continued to climb. The highest gains were witnessed in the 91 days and 182 days. The spread between 91 days yield and the 364 days yield was further reduced to 86 basis points from 167 basis points in the previous week.

Treasury bond auction

As there were no change in the market perception and the short to medium term liquidity position, the investors continued to bid for higher yields. Therefore, both three year and two year bond yield improved further to reach the highest since the bonds were introduced. 

As the rising momentum continued to prevail, the secondary market activities remained low. Most of the market players were following a wait and see policy. 

Foreign Exchange - Dollar Spot Movement

Given the persisted strong demand for dollars, during most parts of the week the spot rate kept over the Central Bank selling rate. Though the Central Bank was honouring demand which were backed by import bills, the spot remained under pressure. 

The spot trading was minimal as there was an acute lack of sellers. The weekly spot average improved further to Rs. 79.53, as compared with the Rs. 79.37 of the previous week. Three months forward was quoted at Rs.81.35 to Rs. 81.55, while six months was at Rs. 83.10 to Rs. 83.40. 
 
 

	91 Days	182 Days	364 Days
Last Week	14.39%	15.03%	15.33%
This Week	14.61%	15.33%	15.28%
Change	0.22 %	0.30%	0.20%
Maturity		1-Oct-02	1-Oct-03
Coupon		10.75%	11.00%
Amount offered Rs.Mn		2500	2500
Amount Accepted Rs.Mn		2500	2500
Weighted Average		15.71%	16.00%
Change		0.33%	0.08%

          
 

Foreigners stay away

Average turnover during the week was Rs.25.1 mn and net foreign outflows were Rs. 28.8 mn. The Milanka Price Index slid 0.8 per cent to 852 while the All Share Price Index lost 0.6 per cent to register 519.9. 

"The retailers and institutions have been cautious about their pre- election picks," Manager Domestic trading, NDBS Stock Brokers, Dimantha Kohombanwickramage said. 

"Monday is a crucial day for trading as investors may get in before elections although Tuesday will be sluggish," he predicted. "The first trading day after elections will be interesting to watch," he promised.

"Uncertainty about election results did not lead to a speculation lead drive. The absence of foreigners did not do much for local confidence," Head of Research, CDIC Sassoon Cumberbatch, Diluk Desinghe said. "The market will lack direction till the results of the polls are announced," he predicted.

Tea exports on the up

Asia Siyaka Commodity Brokers reported that incidentally the low growns average had also toppled the all time record for any elevation. 

The previous all time weekly average record was set by High Growns in February 1998 at Rs. 159.29 per kilo. 

However, brokers report that the devaluation of the rupee pumped sales but also lowered the US dollar value of teas. The average price of a kilo of tea in 1998 was US$ 2.30 while the US dollar average this year is only US$ 1.96. 

Meanwhile, brokers reported that Sri Lanka was heading towards another record, this time in exports. 

As at August this year total volume of tea exports has increased over 19 per cent over the same period last year. Export value too went up from Rs. 28 billion to Rs. 34.4 billion in the same period. 

Traditional buyers still remain dominant in the buyers' front, while Iran, Iraq and Libya have increased imports. In addition, Japan also a traditional buyer of Sri Lankan high growns has increased its imports from 3.5 million kilos in 1999 to 4.9 million kilos for up to August. 

Elections

New promises from young better deals from old

Go and see the villages

Mahinda Rajapaksha (PA)

We have achieved a lot. Especially in the fisheries sector our achievements are very evident. We have established fishing harbours with all infrastructure, we have provided state of the art satellite communication equipment and we are investing in large trawlers that can operate in deep seas. These are all first time achievements.

What happened was, in 1994 when we came into power the economy was ruined by the UNP. Foreign aid was not coming into the country. We started from ruins. Unfortunately many world trends (oil prices, food prices) went against us. But we managed to keep the economy going fairly well. 

The Labour Charter was initiated by you. What will be the effect of a labour charter on investor confidence in Sri Lanka ?

Yes. I frankly believe it. Because I discussed the Labour Charter with a lot of investors. These were good investors, not the types who come here to make a quick buck. All investors like to have a good relationship with the work force and with the Labour Charter we have shown that the government has a clear-cut policy regarding labour matters.

If you go to a country that does not have a labour policy, you will be reluctant to invest, because things could change overnight. There can be more strikes, more demands etc. When you have a clear policy, it is easier to work with the labour force.

Some analysts believe that Sri Lanka's labour is already too regulated and it is hard for our exporters to compete with other countries in the region which have lower labour costs. What is your opinion?

What they mean is that they want cheap labour. Salaries depend on the country's economy and the cost of living. You cannot have a high cost of living and low salaries. There is a balance between the cost of living and salaries. Sri Lanka will not provide slave labour. Some investors would like it if they can provide the meals only as salaries. We are concentrating on providing quality labour not cheap labour.

One of the main criticisms against the P.A. government is that it could not start any major development projects in the nature of Mahaweli. What is your opinion?

If you go into a small village you can see our infrastructural developments. We have provided electricity, water supply etc. 

We have two major projects coming up, Kukule Ganga project and the Udawalawa project. They may not be as large as the Mahaweli project, but these are also development projects. We must not develop one area of the country alone. That is why we have started our development work from small villages.

Government put the country on a war-footing and stopped the expenditure on development projects. However in the wake of the election it is increasing the recurrent expenditure on salary allowances etc. How do you see this?

I must be frank about it. We must make sure that the people are happy because the election is just around the corner. We have to give workers their rights. We had to look into the demands.

If a P.A. government comes into power, what areas of the economy will receive immediate attention?

We will be investing a lot on infrastructure. There is an unemployment problem, therefore it will be employment-oriented development. Also we will be investing heavily in education.

We will also strive to increase the agricultural productivity and improve the agri- marketing process.

Recently the Govt. reduced the price of weat flour, when paddy harvest from the yala season was just coming into the market. The result was a huge drop in paddy prices and difficulties selling it. What is your opinion?

I don't think that was the reason. The price went down because the harvest was very good and the market already had imported rice stocks from the previous seasons. In my opinion closing down the Paddy Marketing Board also affected the farmer. In a free market economy the government must protect agriculture and fisheries sectors.

Sri Lanka is an island, yet only 2% of the GDP comes from the sea. What are your plans to improve this situation.

We must encourage deep-sea fishing. We have introduced Trawlers and multi-day vessels for that purpose. Also we are working on improving an export market for good quality fish. Another very important area is that, we can tap many other resources from the sea. There are Minerals, Oils that we can harvest from the sea that can contribute to national production. We will be doing research on those areas.

Develop the roads

Rauf Hakeem (NUA)

For me to talk about Ports, it may seem as if I am hankering after the Portfolio. I am not hankering after it and it is my party who wants me to take it. This government is procrastinating on this issue and leaving room for unnecessary speculation. The repercussions of their conduct, they will have to face after the election.

My party leader had a vision for developing ports, and in the event me taking over the portfolio I will continue with his development work.

If I ever decide to take up this portfolio I will continue the work on the Oluvil port. Oluvil port project should go ahead without any obstacles. 

What will be the contribution to the national economy from the development of the Oluvil port.?

We are not asking the government for funds. It can be on BOT or BOO basis. It is going to be the hub port for Batticaloa, Ampara and Uva province. It can bring immense potential for a very backward area. Prosperity of a particular region would result with other regions also benefiting from it.

In your opinion what were the main economic achievements in the eastern province during the past six years?

Various infrastructure development projects have taken place. Initially restructuring and rehabilitation of war affected property had to be given priority. We also gave priority to higher education and succeeded in setting up a university in the east. In addition a variety of development schemes like road development, utilities have taken place. The development work carried out by my leader in the east has surpassed the cumulative development work by all eastern province ministers during the past 40 years.

What are your immediate future plans for infra structural development in east other than the harbour?

There must be a highway linking the major cities with the east. A highway should cover the entire coastal belt. Rail Road facilities are also essential to connect the east with the capital.

How do you asses the economic achievements of the PA government during the past years, Has it lived upto the expectations of the business community?

I do not think the business community could be easily satisfied. They are usually never satisfied. Taking into account the trying circumstances under which this government had to take forward the economy, I would say that the management of the economy has being fairly good. But it does not mean that it couldn't have been better.

It would have been certainly better if the decisions were taken without unnecessary procrastination. I hope that the future administration would take decisions without delay and according to proper procedures.

What is your comment about allegations pertaining to employment drives in the port that will deter the efficiency and the profitability of the port?

I totally deny it. The media have always been pointing out employment drives in the Ports Ministry, but they are silent about the massive employment drives in other ministries. My leader has always observed strict equality in giving jobs. I challenge any minister to say they have given more jobs to Tamils than my leader. The question about over staffing, you should bear in mind that the Ports Authority is one of the most profitable state organisations. It has a potential to sustain a marginal increase in the employment levels. You can't look at this from a purely commercial angle, a government has its political objectives too.

Going to be a revolution

Ravi Karunanayake (UNP)

There is no question about us coming into power. There is no if. We, the UNP, realise that the fundamental problem in this country is the state of the economy. The first thing we will be doing is rebuilding the economy. This is the main area that the P.A. government has failed in. For the past six years the economy never got off the ground. Historically, alliance governments have ruined the country's economy. 

Once we come into power, the economy will be driven as fast as possible. We will provide the entire necessary infrastructure and stop the massive brain drain. One of the main areas that will receive immediate attention is the agriculture sector. It will be an agriculture led industrial revolution. Labour intensive projects are a must. Then, we will be looking at the service industry, ports for example have huge potential for development. 

Airports can also be developed and this would mean vast employment opportunities. Our Airports are strategically located but we are once again about to lose the opportunity to convert them to hub status. Banking and insurance are also two areas that we need to push forward.

We also have a vision of developing young up-market management talent. Sri Lanka can be in the forefront of providing management services in the region. Colombo can be developed into a business centre in the same way as Singapore. 

What is your view about the P.A. government's privatisation policy and what will be the privatisation policy of a future UNP government? 

Privatisation has become a global trend, after it was successfully introduced in the UK. The UNP government launched a privatisation programme in late 80's, very cautiously. But, after the P.A. took over in 1994 the only way they could finance their expenditure was by selling assets. 

They have created private monopolies in place of public monopolies. Gas, AirLanka and Telecom are all good examples. 

A future UNP government will implement the privatisation programme with professional approach. We will create an open playing field. There will not be any private monopolies.

What is your opinion about the FTA with India, has it really helped our exporters? 

The Indian government has done, what is best for India. What the Sri Lankan government has also done is what is best for India. 

If our private sector is not geared to compete, what the government should do is to empower the private sector. Instead you go and sign a free trade agreement forcing our private sector to compete with Indian Manufactures on an unequal footing. When we come into power, we will be looking at FTA 's with all the neighbouring countries, but we will be studying our ground situation first and entering on favourable terms on our exporters point of view. After all you should not do anything that is detrimental to our private sector. We have proved ourselves to be a pro-business party.

What will be the main sources of finance for the development projects proposed by the UNP?

We will stir up interest rates within the country and raise capital as much as possible within the country. A little bit of induced inflation can be absorbed because it will be used for investments. Also a lot of our projects will be on the BOT and BO basis. 

What is your view about the Anti-Dumping Bill that is about to be presented in Parliament?

I think we are ten years too late. It should have been legalised long ago to protect our manufacturing base. What the government is doing tomorrow is what they should have done yesterday.

What will be the UNP's policy towards the telecom sector, will the SLT monopoly remain?

The PA government's biggest blunder in privatisation was the SLT. A realistic valuation of the stake privatised was in the region of 30 to 35 billion Rupees. But it was concluded for 13.5 billion.

Also the government succeeded in creating a private monopoly. A privatised asset should not be protected by the government. It is free for grabs and let the consumer benefit from the competition. 

The private WLL loop operators should also be encouraged and given an equal level playing field. Healthy competition should be encouraged since the consumer becomes the final winner.

The small business sector in the country is on the decline. What are your plans to revive the sector?

More than 60 % of all businesses belong to the small and medium category. 

This government has throttled and killed the small businesses. The government failed to drive the economy with any confidence and destroyed the investor confidence. Investor confidence is sacred. 

With one bad statement you can kill it. It is the duty of the government to save the ailing industries. When all is going well you don't need a government. We will be empowering the small businesses with sufficient financing and other means of support. We must not forget that over 60% of the labour force are employed by this sector.

Some analysts say that our stock market is too regulated and it prevents many companies from listing, what is your opinion?

I do not agree. There is less interest in obtaining a listing mainly because of the lack of comfort factors arising out of it. The advantages from obtaining a listing should be clearly evident. Tax benefits are given to unlisted companies, it should be the other way around.

Listed companies are concerned about the return they generate to their shareholders. If tax benefits are given for listing, they can increase their return to shareholders. There will be much more interest in obtaining a listing.

Watawala Plantations in Mumbai

Watawala Plantations had made sure that their stall would impress upon the visitors the potential of their products and Ceylon Tea in general.

The wide range of pure Ceylon Tea products displayed created a big impact as most of those items were a new concept to the general Indian tea market.

The stall was also graced by many distinguished businessmen and visitors. 

One of them were Mr. Krishna Kumar, Vice Chairman of Tata Tea India and Managing Director of the holding company of Taj Group of Hotels

IBM launches NetVista range

By Akhry Ameer

The NetVista all-in-one and legacy-free machines are being launched by IBM, with its newest aim 'a simplified computing experience'. The two new computers vary from the traditional PC in looks, where it moves away from the usual beige-box CPU and monitors to a black finish sleek space saving design. 

The other new features include 15" flat panel monitors with built-in speakers; wireless networking options for home and business; low profile PCI slots and USB ports for easy expansion and connection of peripherals.

The NetVista range also has an additional "Access IBM" button providing access to IBM information, service and support relative to each model. 

The space saving footprint design of these machines are achieved through folding the CD-ROM and floppy drive into the monitor stand. 

Both models offer similar computing power with Intel Pentium III - 667Mhz processors, 64 to 128MB SDRAM and a 10 to 20GB hard disk. The machines are also equipped with an integrated Ethernet network connection capability, while Microsoft Windows 98 and Lotus Smart suite are standard software together with inventory and diagnosis tools.

Employing its new EON (Edge Of Network) technology the line-up has been optimized for the end-user with e-lifestyle coordination and e-business readiness with simple usage features. A new special security-chip has been added to issue and verify digital signatures and encrypt data on the machine towards a secure internet usage.

IBM's new machines evolve from its contention that businesses and individuals follow a four point criteria in selecting desktop machines, i.e. innovative design, manageability, service and support, and price. As for price, according to IBM's local website, the NetVista X40 costs Rs. 245,654/-, NetVista S40 Rs. 122,682/-, as opposed to its top of the range traditional Desktop A20 with a Celeron 600 MHz processor and other standard features that costs Rs. 77,087/-.

The NetVista range will be marketed through IBM's business partners and authorized resellers as with its earlier products. IBM was recently identified as the leading vendor in overall PC shipments for the 2nd quarter in the Asia Pacific region by IDC, the leading Asia/Pacific market research organization.

Telecom instruments from DIMO

As the sole agents for Siemens communications systems, DIMO Limited will initially supply 3 models of telephone instruments to be sold at Teleshops and the DIMOMART at Union Place. These various analogue Euro set models offer standard low-cost entry-level phones and phones with high resistance against lightning, hands free operation, electronic locking and speed dialing keys.

Siemens is a world leader in the communication field with a global presence in over 190 countries. Its technology with its varied solutions is chosen by the communication industry worldwide for voice and data networks. 

DIMO Limited celebrated is 60th anniversary last year. Its Engineering Equipment Solutions division deals in popular brands such as Siemens, PK and MTU with over Rs. 102 million in turnover.

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