Businessmen in Colombo complain that present traffic arrangements are costing the country millions of rupees each day in lost business and man-hours.
Showroom operators in Colombo say they are badly hit by the ban on operating in Colombo. "We cannot transfer finished products from our factory to our showroom, both located within a few miles of each other. We cannot make deliveries during working hours. After 8 pm. when lorries are permitted on restricted roads, most of the offices and showrooms are closed!"
Businessmen say while they consider security is important, they try to make the best of the situation. One solution has been to use vans for transport which are permitted by the Police. Businesses dealing in bulky items are unable to even use this avenue.
"If we have to deliver 10 writing tables to Mount Lavinia 10 trips have to be made. This adds to our costs. We are undergoing cashflow problems due to the present economic situation and the power cuts," one furniture dealer complained. "When the LTTE explodes a bomb in a van, they will ban vans as well," he quipped.
FCCISL Chief, Patrick Amerasinghe said members of his chamber were suffering as a result of the security arrangements. He said the authorities should consult the trade associations before imposing such restrictions as they may have other options.
One Colombo businessman suggested that businesses situated within the city be given periodically renewable permits, with the driver and his assistant being certified by the company. "We will help the authorities with security clearance if necessary," he said.
Mr. Amerasinghe said some businesses were losing as much as 20 per cent of their sales as result of these restrictions. He said it was unfortunate that no prior notice was given of altered traffic arrangements in Fort last week, resulting in a massive traffic . "Nobody knew what was happening. People thought there was a bomb in the Telecom building," he said.
He said the ban on lorries was affecting the construction industry with workers idling until building materials were delivered. In addition even exporters were having problems procuring raw materials in time, resulting in production hold ups.
However Colombo city traffic police said two months notice was given before the restrictions were imposed.
A top police official said he was unable to issue permits on a selective basis, and in any case the restrictions on lorries were imposed as a result of a Defence Ministry directive which was beyond his control. "Businesses will have to transport heavy items before 7.00 a.m. Or after 5.00 pm. And not all areas are restricted," he printed out, adding that the public was informed in through the media, on new traffic plans.
Sri Lanka's first ever publicly traded debenture issue by a private sector organisation, Vanik Incorporation Ltd., closes tomorrow.
According to a senior Vanik official, with tradable debenture being a new investment instrument in Sri Lanka, and despite the public being relatively unfamiliar with the concept, the response to their launch has been "quite satisfactory."
Vanik is expected to raise Rs. 600 million from the public, offer a 20% interest rate payable quarterly, with a 21.55% effective interest rate.
Vanik Chief, Justin Meegoda said the interest rate offered was "higher than necessary" as this was the first debenture of its kind and was intended to be attractive. "We strongly believe no interest rate on debentures will go higher than this," he said.
Financial analysts, economists and bankers agreed it is the economy's gain, when a new investment tool is introduced to the market. Investors have greater investment opportunity and the corporate sector can raise more funds, they say.
The debentures which is very much a part of developed money markets where it is "plain vanilla" as Mr. Meegoda says, is a long term loan, with the corporate entity involved, borrowing directly from the public. Investors are, in return, issued a certificate called a debenture, which is marketable, transferable and negotiable. In the case of Vanik, the maturity period of the debenture is three years at 20% interest per annum payable quarterly.
Mr. Meegoda said, "Vanik's aim is not just to collect money. We have always taken an interest in the expansion and progress of Sri Lanka's capital market."
Econsult chairman Dr. Howard Nicholas said, "Debentures are a good thing and Vanik has been innovative and sensible too.
Mr. Meegoda said, "Somebody had to introduce the instrument into the market."
He said they had held seminars in all the major towns to educate the investor public and also involved 100 commerce graduate teachers in the task.
Dr. Nicholas said it was really not up to Vanik or any particular company to educate the people. "An organisation like the Colombo Stock Exchange ought to take initiative in the matter."
He also feels the government should have been the initiator in the long-term traded bond market. "That will be the way of establishing a bench mark interest rate and the market gets the feel of what the correct long term interest rate for bonds is."
There has been some confusion over the word "unsecured" in connection with debentures, which means they are not backed by any specific, identified asset, Vanik Chief Meegoda said.
"In that case a fixed deposit is also unsecured." According to him, the only difference is, in the case of a debenture, the regulatory authority has specified the use of the word "unsecured," but in the case of the fixed deposit, the regulatory authorities have not made that a regulation. When a debenture is "unsecured" if there is a default in payment of capital at maturity, the investor will be compensated only through the liquidation of the company. But why should we default? We don't want to see the end of Vanik, says Mr. Meegoda.
Financial analysts also say the banking sector is worried by the entrance of the debenture into the Sri Lankan capital market, as it would erode the deposit base of financial institutions. Several leading banks in Colombo pooh-poohed the idea.
Dr. Nicholas says, "It is natural for banks not to like the advent of debentures into the market, for they will naturally eat into the fixed deposits." He said in developed money markets, investors move between fixed deposits and debentures.
Analysts have also pointed out the absence of a credit rating agency which would have bolstered investing confidence by assessing the risk factor involved. Yet as Mr. Meegoda said, "It is a chicken and egg situation. No international rating agency will venture into a market which has no investment instruments."
'The National Youth Skills Olympic Competition - 1996' will be held at district level in June this year and at national level in August.
Chairman, National Apprentice Institute and Training Authority (NAITA) Chairman, R. I. Samaratunga said at a press briefing recently, that the objective of this competition was to enhance the skills of youth, by giving them national recognition.
He said this competition was first held in 1989, with skills in Building and Construction and in 1994 NAITA included other skills as well.
NAITA hopes to proceed to international levels, by training these contestants at a national level. Mr. Samaratunga said they hope to start a competition among the SAARC countries, thus taking these contestants to higher levels. He said this year's competition would be a memorable one, because NAITA was celebrating its 25th Anniversary.
The first prize winner at national level will receive a sum of Rs. 10,000 together with many more prizes and certificates for the other participants. The closing date for applications is April 30.
What worries the Treasury is the cost of the strike: about half a billion rupees, a week.
If that continues for sometime, it may be cheaper to give into the demands, some Treasury boys said last week. But the seasoned plantation man would have none of it. Someone must teach Mr. T. a lesson, he said.
Colombo's stocks will continue their decline in May and rest at the 600 level, brokers have told their overseas clients.
Hence the unusually poor turnover last week.
Right now, most overseas investors are waiting for the market to reach the 600 level, so they could cash in on some bargain blue chips. Ah, the Bears are having a field day...
Sri Lanka, someone once said, had one of the highest per capita consumption of arrack.
But things may soon change, if predictions in the beer industry come true.
Several new breweries are to be set up by end 1997. The total increase in production that would be achieved by these projects will be about 250 per cent, those in the industry say...
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