• Taxpayers Charter on the cards
• Bond prescribes sovereign rating
• More money for port development
• Opposition representation wanted at Paris Meeting
• Tourism shrugs off war and elections
• The winding down of the economy
• Putting the economy back in top gear
• Austin Associates to shake up key industries
• Blue Diamonds hauled up
• More steel for construction
• Bottom Line
• CGM Express Print Shop launched
• Colombo Dockyard wins National Safety Award
• Readywear buys more UML
• Mind your business
• Tea records marginal price changes
• Blend and export, says guru
• Ceylinco Life tops premium income
• Bitech to teach IBM courses in Sri Lanka
• CEAT-Kelani produces new range of tyres
• ANZ reports steady growth
• Admark does Sri Lanka proud at Cresta '99
• Emirates does it again
• Ericsson appoints Delair
• DHIRAAGU goes for GSM technology
• Janashakthi records growth
• HNB share issue fully subscribed

Taxpayers Charter on the cards

By Dinali Goonewardene

The Sri Lanka Institute of Taxation is pushing for the enactment of a taxpayers charter. A deputation of members of the Sri Lanka Institute of Taxation met senior officials of the Ministry of Finance and the Department of Inland Revenue to discuss the enactment of a taxpayers charter in Sri Lanka.

"A taxpayers charter would serve as a code that guides taxpayers and the Department of Inland Revenue in fulfilling their obligations," Member of the Council of the Sri Lanka Institute of Taxation, M.S.M.T Samaratunga told The Sunday Times Business.

The Sri Lanka Institute of Taxation has suggested that the Indian taxation charter be used as a model as it is short and simple.

The Indian Charter states that each taxpayer is entitled to expect the Income tax Department to be fair in deciding tax matters, provide a right to be heard and be impartial and objective. It is also expected to be fair in collecting taxes that are legitimately due.

The charter states that taxpayers could expect the income tax Department to provide a quality service by settling tax affairs promptly and keeping confidential, personal information furnished to the department in addition to being courteous to taxpayers.

The taxpayer may also expect the Income Tax Departments assistance in understanding the rights and duties under tax law and availing the benefits and concessions due to them and getting information and assistance at the enquiry counter.

The charter also states that the income tax department expects the taxpayer to extend co-operation to tax officials in assessment and collection and expects him to voluntarily disclose his correct income and pay taxes dues. The taxpayer is expected to discharge his statutory obligations on time and provide true and complete information.

At present, in the absence of a taxpayers Charter the Department of Inland Revenue abides by a mission statement which aims to foster a beneficial tax culture but does not specify the duties and obligations of the Department of Inland Revenue or the taxpayer.

Bond prescribes sovereign rating

International credit rating agency Duff and Phelps's Group Vice President and Chief Economist, Daniel Bond said in Colombo last week that a sovereign rating will help stall the adverse publicity and promote investor confidence for government bonds in international markets.

Bond was talking to an audience of regulators, stock and money brokers at a SLASIA forum.

The media machine's well established practice of highlighting bad news and sensationalising news has taken its toll on the country which gets flashed in the international news only when there is a bomb blast, election violence or an attack on a military post in the north, he said.

But a sovereign rating will take care of this by giving the country its true creditworthiness and provide a basis for investors to buy foreign currency denominated Sri Lanka government bonds, he said.

Bond referred to countries with similar economic fundamentals like Costa Rica which raised huge amounts of funds in international bond markets because they come with a sovereign rating from more than one of the four recognised international rating agencies ie. Standard and Poor's, Moodys, Fitch IBCA and Duff and Phelps.

Sri Lanka has yet to get a sovereign rating although the GOSL has raised money in international bonds markets.

The first was a US$ 50 mn FRN. A few local corporates have also raised money abroad. Now that DCR, the local arm of the Duff and Phelps is here (they set up in July) a rating for the country is to be expected.

But debt analysts say that ratings for an agency in which the Central Bank has a stake (15%) is not healthy and ratings should come from one of the other agencies.

Analysts also say that the government is shy to go for a rating because of its very conspicuous war risk and the huge defence expenditure which is 4.3% of the budget deficit and 1.8% of GDP.

More money for port development

By Mel Gunesekera

The World Bank has agreed to fund a US$ 44 million ports efficiency improvement project, to enable the Colombo port to be competitive in the region, a Bank official said last week.

The project expected to get underway next year, will consist of four components, policy, safety and environmental enhancement, trade facilitation and technical assistance and training. The cornerstone of this project is to corporatise the Jaya Container Terminal (JCT) by making it a public limited liability company with less political interference, the official said.

The sector reforms would also include the setting up of a port regulator, which may see amendments to the Sri Lanka Ports Authority (SLPA) Act. (MG) An independent regulator is necessary since JCT is managed by SLPA, and the QEQ is managed by South Asia Gateway Terminals Ltd.

A Ports Competition Commission will be set up under the regulatory structure, which will be funded via the Ports Efficiency Improvement Project. The regulator will be set up under the purview of the Ports Ministry and will be accountable to parliament. The regulator will have jurisdiction over all port participants, to ensure equality among all operators, prevent anti competitive practices and monitor port tariff. The World Bank hopes to use the Telecommunications Regulatory Commission as a model to set up the ports regulator.

Meanwhile, the World Bank, the Overseas Economic Co-operation Fund (OECF), and the Asian Development Bank (ADB) have agreed to fund the development of the port's South Harbour.

The project is expected to cost around US$ 600 million. The Asian Development Bank has also agreed to provide a US$ 1.46 million technical assistance grant to prepare development plans for this project.

The study, financed by the ADB's Japan Special Fund, will determine the viability of building a breakwater for additional container terminals to be constructed. The total cost of the study is US$ 1.83 mn equivalent and co-financing may be provided by the OECF, World Bank and others.

SLPA total revenue increased by 14% to Rs. 6.8 bn during the first half of 1999 compared to the same period in 1998. The SLPA's operating expenditure during the same period was Rs. 4 billion, the Central Bank's half-yearly report stated.

The report said, total container traffic at the Colombo port decreased marginally to 853,973 TEU's while transshipment container handling also decreased marginally to 609,803 TEU's.

Opposition representation wanted at Paris Meeting

By Dilrukshi Handunnetti

Donor Countries have asked for the inclusion of an opposition member in the next, Paris aid group meeting authoritative sources told The Sunday Times.

The condition comes in the backdrop of a possible cancellation of our Commonwealth membership due to negative socio-economic indicators and criticism of the PA administration on good governance, human rights and other concerns, areas in which the donor community has considered the PA to have stumbled.

The sources confirmed that it has been communicated that it was necessary for the donor countries to have confidence that a bipartisan economic policy could be adapted in Sri Lanka specially in the backdrop of a protracted war.

It was only recently that the scheduled Paris Aid group meeting was postponed which was widely reported to be only a 'deliberative but not a pledging conference' for Sri Lanka.

Sri Lanka, according to sources and reports have come in for much criticism in the areas of macro economic policy, human rights, corruption and the conduct of the war.

Accordingly, Sri Lanka has been instructed to seriously include opposition view points in the forthcoming Aid group sessions and to possibly include opposition representation in a bid to get a truer picture of the Sri Lankan economy and related issues.

The source maintained that most of the lending agencies have voiced serious concern over the PA administration putting forward peace as a possible criteria for seeking foreign financial assistance than those based on sound macro-economic policies.

Tourism shrugs off war and elections

Leading tour operators said that fierce fighting in the North and an election campaign which was turning sour had not deterred tourist arrivals. While 1999 is billed to be a record year for tourism the announcement of elections gave rise to widespread speculation that the tourism sectors boom would come to an abrupt halt.

"There have been no cancellations but there might be a drop in bookings to come," Director, Walkers Tours, Michael Elias told The Sunday Times Business. However Aitken Spence Travels claimed otherwise. "One to three per cent of tourists have cancelled bookings," Chairman, Aitken Spence and Company, Ratna Sivaratnam said. "Bookings have been cancelled by individual travellers not package tourist who would have to forfeit their advances on cancellation," Mr Sivaratnam said.

"But we have not lost much as at today and a lot will depend on the advice of home offices in Britain and Germany. The war has got severe publicity while the elections have not," he added.

The Sri Lankan army lost 300 square kilometres of ground in the Wanni region, in a week of fierce fighting which began on November 1st. The army had previously battled 18 months to gain control over the region.

Meanwhile the run up to the elections is also turning ugly with two people being killed and forty injured by a grenade thrown at a United National Party presidential election rally in Eppawala on November 14 th. Twenty six incidents of election related violence have been reported to the police election secretariat.

"There have been no cancelled bookings and I have personally had to deal with only four inquiries - three about the war and one election related," General manager, Jetwing Travels, Terrence Fernando said. "Most destinations are heavily booked for the peak period and tourist would find it difficult to book alternative destinations," he explained. "Business might be a little slack during christmas and the new year when a peak period supplement and a millennium supplement are being charged, but right now business is brisk," Fernando said. However rumours of cancelled bookings dogged city hotels. "No, we have not had cancellations except for cancellations of banquets on the 20th and 21l st of December," Director Marketing and Communication, Colombo Hilton, Yasmin Cader said. "There have been no cancellations. We cater to corporate clients who don't seem to have been affected," Public Relations Manager, Trans Asia Hotel, Chandreenie Kariyawasam said. "We have not had any cancelled bookings yet. If the violence escalates because of the elections, there might be," General Manager, Galadari Hotel, Chandra Mohotti said.

1999 is tipped to be the best ever year for the Sri Lanka's tourism sector. Tourist arrivals from January to September 1999 were 319,050 compared to 381,063 arrivals during the whole of 1998 and 366165 in 1997. 1996 was a dismal year for tourism recording 302,265 arrivals following the Central Bank bombing and the Kollonawa oil refinery bombing. 1997 saw the Galadari Hotel being bombed and 1998 the Dalada Maligawa in Kandy.

However 1999 has seen relative calm with government travel advisories abroad easing up on the situation in Sri Lanka. Promotion campaigns by the hotel and travel industry abroad and intense campaigning of tour operators have contributed to the influx of tourist to Sri Lanka but analysts believe the increase in arrivals to Asia has been the most significant factor behind the increase in tourist arrivals to Sri Lanka.

The winding down of the economy

The latest Central Bank statistics indicate a significant slowing down of the economy.Despite some improvements in the third quarter of the year, the overall performance remains quite unsatisfactory.While some improvements could be noted, the unfavourable signals are disquieting. Some serious signs of economic set- backs are emerging.We may well end the century with one of the poorest economic performances in recent years.

Although some industrial exports grew in September, the increase was inadequate to register a positive growth in overall exports for the nine month period as a whole. In the first nine months exports actually declined by as much as 7 per cent, compared to our not so good performance of last year. Most significant were the facts that agricultural exports fell by as much as 16.5 per cent, while industrial exports declined by 4.5 per cent, compared to our levels in the first nine months of last year.While the decline in agricultural export income was mainly due to a drastic decline in international prices for our tea and rubber, industrial exports fell due to our competitive edge being eroded. The latter development is particularly disquieting as we are experiencing these adverse developments at a time when the Asian economies and the global economy is reviving. True, the Sri Lankan economy showed a useful resilience at the time of the Asian crisis, but it appears to demonstrate an inability to exploit the global growth. An export economy such as ours should boost its own economy at a time when global economic conditions are improving. There appears to be something lacking in our capacity to stage a revival. In fact the signs are in the opposite direction. Hence the disquieting concern.

Paradoxically,the most serious concerns arise from the import statistics. The improvement in the trade balance, when examined qualitatively, demonstrates very clearly the slowing down of the economy. The slowing down disclosed by the imports is not merely a reflection of what happened, but what is happening and may happen in the coming months. Intermediate goods imports have declined by 6 per cent and investment goods imports by a significant 13 per cent. The implication of the decline in intermediate imports is that since our raw material imports have declined, industrial output too is likely to continue to fall for some time. The sharp drop in capital imports is a clear sign of lesser investment and a poorer investment climate. The impact of this development, if unchecked, is that our growth momentum would be slowed and its impact would be felt for sometime.

In this context, there are a few favourable indicators during the year. These include the better agricultural performance in paddy and other food crops and an increase in both tourist arrivals and tourist earnings by about 20 per cent over that of the same period last year. As against that, tea production which has shown an up trend appears to have faced a setback, with production declining in September.The cumulative tea output for the nine months has declined by 1 per cent.

The developments discussed earlier have led to a decline in our foreign exchange reserves by 10 per cent in the nine months of the year. This decrease in foreign exchange reserves from the position at the end of last year is serious, especially as there are no signs of an improvement. The international agencies are not likely to consider new programmes of assistance at a time when the political leadership remains to be settled. As pointed out improvements through export improvements and investment increases are also not visible on the horizon.

It is utterly important that we do not remain unresponsive to the unfavourable signs that are emerging. As soon as the Presidential polls are over, the government requires to address these critical issues of the economy with considerable urgency and a pro- active role, which has been missing for quite some time, perhaps owing to our preoccupation with elections. Otherwise a bleak prospect awaits us in the new century.

Putting the economy back in top gear

"... So much of what I want to do can only be achieved through good economic management something I will provide and which Chandrika sadly lacks... Opposition leader, Ranil Wickrmesinghe in his party's policy statement...

No one knows how many people are really unemployed. Like the running of our economy, the government fixes the figures for their own purposes. Chandrika keeps telling us how wonderful things are but you know the reality of the situation. So I cannot say how many people we can help. Instead, let me explain what we shall do to create jobs.

• I will actively encourage foreign companies to re-locate in Sri Lanka, not in the haphazard way that Chandrika has done. Every new company that comes to locate here will create many new jobs.

• I shall seek domestic and overseas investment to help rebuild our infrastructure. That will create jobs.

• I will establish a Graduate Employment Assistance Scheme to provide jobs for the presently unemployed graduates. The private sector too will participate in this scheme which will include Graduate Development Centres.

• With an open economy, local businesses of all sizes can be threatened. Working with the Chambers of Commerce and Trade Associations, I will seek ways in which we can ensure that local businesses especially small businesses benefit from the open economy. This will include a new Development Bank to provide capital to local businesses. That will safeguard jobs as well as create new jobs.

• I will organise our country into five economic regions. Each will have an Economic Development Commission to promote industry, agriculture and tourism in the region. In addition, Hambantota and Trincomalee will become enterprise centres. The construction of the Ruhuna Port will provide a much needed boost to the development of the South.

• The world is moving rapidly from an industrial to a knowledge economy. I will promote computers and information technology to become a leading sector of the economy creating hundreds of thousands of new jobs.

• I will develop a strategy to move Sri Lanka away from low value added tourism to high value added tourism.

• The garment industry is a vitally important job and wealth creator. I am determined to help this sector meet the changes in rules and trading practices worldwide by 2004. I would like to see us promote this important product as a country and ensure we exploit these new challenges. I will work to help other existing and new sectors in a similar way.

• We have many important industries. I would like to mention just two, tea and agriculture. Our tea is the finest in the world. We should promote a Sri Lanka brand. In order to protect jobs in the tea, rubber and coconut industries, plantations and factories will be assisted.

• In agriculture I want to see farmers benefit by growing more crops on their land. Modern techniques mean that crops can be grown on the fringes, after a harvest or even under existing crops. The new Small Business Authority will be responsible for promoting this.

• Five years of neglect has sent many small businessmen to the wall. I will develop this sector and establish a Small Business Administration to promote Small Businesses.

• The Law of the Sea Conference gave us a Special Economic Zone equal to seven times our land area. I will encourage the commercial exploitation of our seas and thereby create new jobs. • I will provide the necessary leadership to ensure that Sri Lanka will emerge internationally competitive.

In the new world order, Sri Lanka is in a pivotal position. Like Hong Kong and Singapore in the 20th Century, I will work with our best brains to make Sri Lanka the enterprise centre of South Asia. That will create many new jobs. To do this we will need to do the following:

Provide first class power generation capacity;

Provide a world-leading telecommunications system with a minimum of two million telephones;

Provide ports and airports able to cope with the increased traffic;

Provide a transparent and investor friendly, legal and regulatory regime;

Restructure the financial sector and the capital markets to make Colombo a financial centre;

All of this will create new jobs and help to safeguard existing jobs.

Cost of Living

One of the consequences of falling unemployment, greater investment and a more streamlined economy is that more money ends up in peoples pockets. Greater competition coupled with greater purchasing power will help to reduce the individual's burden of the cost of living.

My whole programme is structured towards these aims. So much of what I want to do can only be achieved through good economic management - Something I will provide and which Chandrika sadly lacks.

The GST was a badly implemented tax imposed upon the people of this country by the present government. I will modify this tax and implement a fairer tax after the widest possible consultation.

Consumers have a right to be protected. I will ask the new Parliament to pass tough laws giving additional protection to the consumer against unscrupulous traders.

Helping the poor

I want poor people to have a chance in our new society. I want them to play their part with pride. The current government Samurdhi project is far from perfect. I will release it from its political shackles and then improve it to benefit all people who are poor.

Overseas employment

It is important that we continue to support and increase opportunities for Sri Lankans to work overseas.

I am aware of the strains placed upon separated families when one member goes to work abroad.

As our economy grows and more jobs become available I intend to see that people have a choice - to work at home or to seek opportunities abroad.

Meanwhile, I will establish a Ministry for Overseas Employment to look after the interests of migrant workers and their families.

The rural economy

The farmer and fisherman are the bedrock of our economy. Neglected and ignored by Chandrika, I want to restore their fortunes and dignity with the following initiatives:

• I will help to protect farmers' incomes by not allowing unrestricted imports to flood the markets;

• I will establish floor prices for selected crops to protect the farmer from price fluctuations;

• I will introduce subsidies on selected agricultural inputs such as fertilizer to ensure the cost of production is minimal; • I will modernise the rural economy for the 21st century. We must improve our rural infrastructure by bringing better transport links, electricity and telecommunications services to the villages.

• I want to see our farmers and fishermen let the modern tools and techniques necessary to increase productivity and therefore their incomes;

• I will develop localised fisheries harbours to improve the productivity and income of the fishermen;

• I will establish ice plants and cold rooms for better preservation of fisheries produce;

• I will lift the ban on out-board motors that are over 15 horse power in capacity;

• I will introduce a scheme by which fishing gear and equipment will be made available on easy payment terms;

• There will be increased public and private investment for animal husbandry;

• To survive we need to see new value added crops growing in our fields. I will initiate Agro-Business Centres to advise and train farmers on how to seize these new opportunities. I will do all that is necessary to strengthen the marketing capacity of our farmers.

• I will set up a system of micro-banks for farmers, fishermen and small entrepreneurs to address the credit and capital needs of this sector;

• Additional resources will be mobilised to improve agricultural research and seed development;

• Soon after my election I will devolve and decentralize selected economic, cultural and developmental powers to local authority level. I want to see decisions made by local people - not by people sitting in Colombo and the provincial capitals - so that they can prepare and implement their own development programmes.

Plantation community

When elected I will:

• Upgrade the secondary schools in the plantation sector to be on par with the other schools;

• Introduce a special programme for the provision of housing in the plantation sector;

• Upgrade the health services in the plantation sector;

• Review and expedite the procedures for issuing National Identity Cards.

I will give full and absolute ownership of state lands to all those people and families who lawfully hold conditional possessions under the Land Development Ordinance, the Land Settlement Ordinance and the Land Grants Ordinance including Swarnabhoomi and Jayabhoomi deeds.

I will remove all restrictions on absolute ownership except where to do so would be contrary to national policy or environmental restrictions, or where the original permits were issued unlawfully.

A House owning democracy

It is my vision that all Sri Lankans should own a home. I will encourage home ownership and continue the UNP tradition of house building.

Towards achieving this objective I will:

• Promote the large scale constructions of homes and flats;

• Ensure housing loans for building and purchasing homes - including the provision of such loans from the EPF/ETF like in Singapore;

• Assist the poor to build their homes by the provision of funds and materials;

• In order to make it easier for people to own their home I will review the present system of payment for flats in the State-owned housing schemes.

Any economy is only as good as its transport infrastructure. We need good, frequent bus services; fast, efficient railways running on time, and safe, quality roads. These are my aims:

• We will introduce a short-term programme to improve our existing transport system. We will reduce travel times by co-ordinating the services of both public and private transport authorities;

• We will remove road barriers, which close up roads unnecessarily and choke traffic;

• We will abolish the additional tax on diesel vehicles imposed by this government;

• With regard to the railways, we must unquestionably improve services for customers and the working conditions of the workforce. I will oversee investment in electrification, a phased renewal of rolling stock, the introduction of proper management systems and training for all staff;

• I will ask all bus operators to work towards a structured modern bus service. Resources will be made available for new, modern, comfortable buses, properly maintained and managed. For the majority of people the bus is the main form of transport and so I will make this one of my highest priorities;

• After five years of absolute neglect by this government, the rehabilitation of our roads will also be one of my top priorities. Then we will look at providing a first class network of national highways. Roads are the key to modernising and opening up our rural areas to development. With existing resources and further overseas aid and investment I believe we can proceed quickly.

Industrial relations

I believe that Sri Lanka must move from a low wage economy to a high wage economy through rapid economic development. My policies will result not only in such economic development but also will ensure that the gains are shared with the employees.

It is vital that workers have confidence in the value of their retirement money which they have saved. I will see that the EPF and ETF monies are properly invested to obtain a higher return.

I will:

• Safeguard the rights of the workers;

• Accept Trade Union activity;

• Amend the law to enable the expeditious disposal of Industrial disputes.

Austin Associates to shake up key industries

By Mel Gunasekera

A major project to improve the competitiveness of key industries in Sri Lanka has got underway with the assistance of USAID. The renowned J E Austin Associates, part of the Nathan MSI consortium,

J.E. Austin Associates, Inc. (JAA) who assists corporate management and government leaders to implement major strategic changes have been contracted by USAID to work on the second stage to improve competitiveness in key industries. We have identified six cluster sectors, namely tea, rubber, tourism and eco-tourism, garments, jewellery and financial services where Sri Lanka can improve on its competitiveness with other countries, Resident Advisor J E Austin Associates, David Flood said. The other areas of activity, which the project will look into includes, information technology, ceramics, electronic products, toys and agri business (including fisheries).

The study also plans to investigate competitiveness in secondary cities like Hambantota, Galle to develop a municipal level strategy. Last year, J E Austin Associates conducted a competitiveness study on Sri Lanka under the auspices of the Sri Lankan government. The study found that Sri Lanka ranked lower in world competitiveness.

"The government then asked us to continue on the second stage of the project to improve competitiveness in key areas," he said.

Flood says that the USAID sponsored TIPS programme has already worked with various businesses in Sri Lanka on how to improve productivity.

"We will extend their work to the cluster programme, which will be conducted on a broader aspect." Each cluster will have a cluster co-ordinator, which will in turn draw up a strategy planning project. Flood says that the project will be co-funded, where the sector group will contribute to hire the coordinator for the project. USAID will chip in to help out with the technical aspects, marketing studies etc.

The project hopes to work in close contact with educational and training institutions, particularly to develop human resource activities. Flood hopes to have the cluster coordinator up and running by next February. He also said, that once the elections are completed next year, they hope to extract and see what the policy implications are, to push the cluster further.

"We will then set up a dialogue between the government and the private sector to increase productivity." Though the project is done on a voluntary basis among various cluster groups, Flood is hopeful it will catch on industry wide to increase productivity.

Blue Diamonds hauled up

The Securities and Exchange Commission (SEC) has called for explanations regarding the alleged irregularities of Blue Diamonds Jewellery Worldwide Ltd. The query comes in the light of the company auditors raising questions regarding its investments in Energen Holding Co. Ltd.

Blue Diamonds auditors KPMG Ford Rhodes, Thornton & Co. qualifying 1998/99 accounts said, the company had purchased technological rights for Rs. 229,731,188. Auditors said, they are unable to verify the future economic use of the technological rights and thus unable to ascertain whether the future benefits to be generated by this acquisition will exceed its cost to date.

Auditor's also queried Blue Diamond's Rs. 287,500,000 investment in Energen Holding's, only significant asset is technological rights purchased amounting to US$ 35 mn. Auditor's said they are unable to verify whether the future economic benefits that will flow to the company from the investment will exceed the carrying amount of the investment. Auditors further pointed out that the company is experiencing severe cash flow problems due to poor recovery of debts. Further the turnover has reduced substantially and the operating margins are such that they do not cover all the production overheads. "These factors may have implications on the company's ability to continue as a going concern in the foreseeable future."

More steel for construction

An Indo-Sri Lankan joint venture to commence operations soon will be the second largest steel maker in Sri Lanka. G.T.B. Colombo Corporation (Pvt.) Ltd., a Rs. 450 million BOI project will churn out concrete re-enforcement bars named as 'Thermax' rebars for the local construction industry.

The Indian counterpart to the venture H and K Rolling Mill Engineers (Pvt.) Ltd., have invested Rs. 150 million, while Rs. 200 million was funded by a consortium of financial institutions that include DFCC and the Hatton National Bank through the Merchant Bank of Sri Lanka.

The funding for the balance Rs. 100 million, which is required for the running of the new factory is still being worked out, financiers to the project said. It is understood that HNB has already approved Rs. 50 million and HNB officials said that the company might consider financing the balance.

G.D.B officials said the new factory that has been set up in Pannala, Sri Lanka had a production capacity of over 50,000 tons a month. The venture aims at supplying the local industry with high quality concrete re-enforcement bars that were previously imported.

The company says that the product will not only bring the latest international standards of quality and reliability in the construction industry but at the same time will save valuable foreign exchange for Sri Lanka. Officials added that eventually the steel bars could be exported to neighboring countries.

They also claim that the use of 'Thermex' rebars would reduce the cost of steel used in construction by at least 10 per cent.

They added that the technology used to produce the rebars would ensure a consistent quality, better corrosion resistance and higher fatigue strength in addition to being stronger than the traditional steel bars used in construction today.

Officials said that previously construction companies imported the rebars in the construction of the world trade center and the friendship bridge under construction among others.

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