News

Chamber says hung parliament likely 

“A peaceful settlement of the conflict in the north and east is an important issue that needs settlement without delay. If this is not done quickly, we shudder to think of the consequences,” noted chamber president Aloy Jayawardene.

He said the chamber’s view was that the outcome of the December 5 elections would be another ‘hung’ parliament with a “repetition of the senseless jockeying for power that has proved to be a chronic recurrence at the cost of our economic development.”

In an appeal to all political parties ahead of the poll, Jayawardene said leaders of political parties should “see the light of reason and work towards unselfish goals for the greater good of our country.”

He said the chamber has watched with growing dismay how opposition parties threw to the winds all possible gains that could have accrued to the nation from the PA-JVP MoU.

“With our industries teetering on the brink of total disaster, the chamber feels that we and the people of Sri Lanka have the inalienable right to demand from our leaders a more responsible attitude to facing the problems that beset our nation.”

Jayawardene said the PA government had good ideas and policies but lacked the ability to implement them because of its weakness in numbers. “Now while time seems to be running out for us and the plunging of our growth rate to the lowest ever in the country’s history, we do not see much hope for improvement even after the current election.”

He said the government to be formed after the poll would have to assure the nation of good and stable governance and also practice it. “It has to implement urgent institutional and policy reforms. Once a dynamic economy, Sri Lanka now needs rejuvenation and only reforms can make it work,” his statement added.

EFC says state shouldn’t interfere in wages 

“We stress the importance of permitting private sector enterprises to determine without interference the management of their finances including the levels of wages of their employees,” noted G.K.B. Dissanayake, EFC Director-General in a letter to Labour Minister Athauda Seneviratne. Seneviratne last week requested the private sector to follow a government move to give an interim monthly allowance of Rs 1,200 per month to state employees.

The EFC said the private sector in general has appealed to successive governments in the past to refrain from intervention in private sector wages, as wages are determined on the affordability of each enterprise.

“On this basis, many companies in the private sector have their own salary scales which are comparable with market rates and many others determine their employee wages through collective bargaining with unions,” the EFC chief said. 

He said wages by the private sector to its employees have to be funded by finances generated by the respective enterprises and any wage increases also have to be funded from this same source. 

Dissanayake said state intervention in private sector wages is inconsistent with the fundamental principles of a free market economy since in such an environment fixing of wages should be subject to market forces.

GTL opens largest logistics centre in South Asia

It is a BOI approved US $ 9 million joint venture between W T Air Cargo of UK and Sri Lanka’s Roton Vander Freighting and has 365,000 square feet of warehousing space on a 13-acre site.

‘’Sri Lanka is definitely on her way to becoming a very strong economic force in the region,” said Niranjan Deva Adittiya, member of the European Parliament at the launch ceremony.

Opposition Leader Ranil Wickremesinghe said Sri Lanka needed more and more warehouses of this nature for economic development.

The development of service sectors such as logistic centres will enable countries like Sri Lanka to develop trade relationships with others despite economic problems, he said.

People’s Bank cuts interest rates

The People’s Bank (PB) said in a statement it was trimming interest rates by one to four percent in keeping with government moves to stimulate the economy.

The Bank of Ceylon (BoC) said last week it was reducing interest rates by two percent following the Central Bank move.

PB said it has brought down its lending rates on all rupee-funded facilities but said it would maintain its savings rates for all savings schemes including “Jana Jaya” and “Vanitha Vasana”.

Top hotelier blames politicians for tourism mismanagement

“While tourism is one of the most vulnerable enterprises in a crisis that could arise on account of internal and or external events, it also clearly indicates that the fortunes of an otherwise attractive and profitable enterprise such as Eden Hotel has also been totally shattered on account of both mismanagement of the country’s affairs at home and mishaps abroad,” noted Prof. M.T. A Furkhan, Chairman of Eden Hotel Lanka Ltd.

He was commenting on the downturn in the industry in the Eden Hotel Lanka Ltd annual report. Furkhan is also chairman of the Confifi hotel chain.

He said the crisis erupted just when tourist inflows to Sri Lanka were showing every sign of an upward trend. In 1999 the highest ever figure of 436,400 tourists was recorded in Sri Lanka which figure was reduced by 8% to 400,414 in the year 2000. 

In the first six months of this year, tourist arrival figures increased by 10.5%, with June arrivals alone showing a growth of 29.8% over June 2000. The official estimate of total arrivals for 2001 was 450,000 tourists, which if it materialized, would have broken the 1999 record. 

He said the first signs of doubt about the immediate future of tourism to Sri Lanka arose when the government decided to prorogue parliament and call a referendum, which was later postponed.

“The immediate reaction from the tourism generating foreign countries was travel advisories issued to their citizens warning them of the dangers of travelling to Sri Lanka. The next unfortunate event was the Katunayake Airport bomb incident which led to more severe travel advisories,” he said.

With the attacks in the US, there is now a dramatic change in the global scenario with the unhappy prospect of a war in South Asia.

Currently almost all hotels on the south west coast of Sri Lanka are competing for the occasional FIT traveller and for weekend local traffic. The income arising from those sources are hardly adequate to pay the salaries of the permanent staff, electricity costs with surcharges and other overhead costs and service debts at the same time. Contractual and seasonal staff have all been laid off and there is hardly any occupancy in most hotels, Furkhan said adding that some hotels have totally closed for business to minimize their losses.

In terms of results, the company reported a four percent rise in gross turnover but the net profit fell to Rs 12.3 million in 2000/2001 from Rs 19.2 million in the previous financial year. 

The chairman said that the directors decided that as the consequence of closing the hotel could be very damaging, the alternative choice of keeping the hotel open at least for the few FIT clients plus the local weekend clients is the lesser of the two evils. “Here again, the hotel industry is forced to offer even lower priced packages in order to compete for the meagre customers, which means that hardly any net income will be left to meet the enormous cost of keeping open a 5-Star property such as Eden Hotel.”

Auctioneer’s commission only after sale is complete-court

By Laila Nasry

The judgment delivered by Chief Justice Sarath N. Silva with Justices P.R.P. Perera and Shirani Bandaranayake agreeing stated that; “the right of an auctioneer to make such a claim cannot even be remotely implied.” 

It was further stated that what is recoverable by the auctioneer is the fee on the proceeds of the sale either, where it does not exceed Rs. 7,500 and the fee is fixed at 3% in relation to movable property and 2% with regard to immovable property or where it exceeds Rs. 7,500 and the fee recoverable would be Rs 150 and Rs 5 for every 1,000 of the proceeds over and above Rs 7,500. 

In the instance of a sale being postponed or stayed, the amount recoverable by fees would be half of the amount that may be due in the first and second situations on the estimated value of the property. However this is subject to the limitations in proviso of Section 258 of the Civil Procedure Code. 

The case which was instituted in the Commercial High Court of Colombo by the Commercial Bank of Ceylon Ltd. and came up before the Supreme Court for Leave to Appeal inter alia addressed the issue of fees claimed by the auctioneer in execution proceedings and paid by the bank subsequent to the execution of the auction had been stayed in the High Court. 

The auctioneer is L.W. Senanayake.

Letters

Treasury short-circuits CEB

But what seems unbelievable in this instance is the rare courage, unheard of in recent times, displayed by Mr. L. Ariyananda, Chairman of the CEB, who whilst holding office, boldly brought to the attention of the public, through the media, of serious irregularities being committed by the Treasury.

The chairman must be commended for this exemplary step as the head of a statutory authority, which has been charged with the responsibility of providing electricity at a realistic cost, to drew the attention of the public to a matter that is likely to have lasting adverse economic consequences for them. The professionals and particularly the engineers whose counterparts in the CEB have been recently much maligned, should wholeheartedly endorse this initiative and emulate the lead given by him.

Since the Treasury has so far not denied or refuted these statements we must presume that they are well founded. Therefore this is a sound case where the CEB, the professionals and the public must commence a campaign to condemn such action and to ensure that it is not repeated.

The CEB must stand together and give a firm warning to the Treasury that unless they call off their project they will have nothing to do with it. The public must express their resentment to the hijacking of the specialist duties assigned to the CEB by law.

Unless society is prepared to react fast and effectively to serious irregularities of this nature, the freedom for those who work according to personal agendas will continue and the culture of corruption and indiscipline that is strangulating the country will continue regardless of who is in the driving seat.

T.G. Perera
Colombo

Pears Baby’s new range

“A sharp growth in the product is expected after the re-launch of the brand,” said Amal Cabraal, the Brands Director of UCL. 

The range of pure and mild Pears Baby products consist of soap, baby cream, talcum, cologne, shampoos and oil. Pears Baby soap was launched into the market in 1960 and followed by other products in the baby care range. The last re-launch was in 1994. 

New aids for teaching, learning

The Craft Educational Aids at 71, Dickman’s Road, Colombo 5, is the sole agent and sole distributor in Sri Lanka, for Franklin Electronic Publishers of USA.

A company spokesman said these devices eliminate the problem of referring printed dictionaries and saves time especially when reference has to be done in class rooms.

Events and announcements

Marketing courses

These distant learning courses are designed to meet the needs of today’s marketing communications and advertising industry including the latest e-commerce. There are courses for new comers, school leavers as well as well experienced personnel. 

The examinations will be held in June and November in Sri Lanka. Maximedia, a Sri Lankan e-commerce company focused on career solutions represents Cambridge Marketing College in Sri Lanka and the Maldives. 

IT and the VIRUS

ITI on bottled water

This seminar will deal with draft food regulations on the registration, manufacture and marketing of bottled natural mineral water and drinking water, due to be gazetted shortly.

The manufacture of bottled natural mineral water and bottled drinking water has expanded tremendously in Sri Lanka in the recent past including imported bottled water.

UK trade mission

This is their first visit to Sri Lanka and is a strong signal of Britain’s continuing commitment to trade with Sri Lanka. Six companies - Systems Ltd. Eastman staples Ltd, International Apparel Training & Consultancies, Intrec Ltd, North West London College, The British Computer Society and the Chamber Management Services comprise the delegation.

Seminar on US-crisis impact

The keynote address of this seminar will be delivered by Arjuna Mahendran, Director, Economic Research, (ASEAN & South Asia), at Societe General Securities (Singapore) Pte. Ltd.

Mahendran is a high calrbre thinker on the economic landscape of South East Asian Countries. His presentation will deal with:

* Japan is already in a technical recession and the US is almost certain to follow, dragging down Europe with it. What does this mean for Sri Lanka’s export prospects?

* The war in Afghanistan has thrown up a higher regional risk profile, which offers both risks and opportunities for Sri Lanka. How can we identify the opportunities and exploit them while downplaying the risk?

* What are the structural impediments in the domestic economy, which hamper exploitation of these opportunities (apart, of course, from the war)?

* What elements make up Sri Lanka’s long-term comparative advantage and how can these be effectively exploited?