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Non-compliance with the Finance Act In pursuance of Section 10 (5) of the Finance Act No. 38 of 1971 is a violation of its obligation to credit the balance money of the surplus of net profit to the treasury fund.

If there is a surplus in a public corporation for a certain year, the balance should be credited to the Consolidated Fund after making deductions specified in the Act.

Nevertheless, out of the total net profit of Rs. 30,253 million received by the SLPA from 2016 to 2019, only Rs. 600 million had been credited to the Consolidated Fund.

Further, the above profit included a total rent of Rs. 8,514 million relevant to the period from 2016 to 2019 received from the two companies engaged in the operations at South Asian Gateway Terminal (SAGT) and the Colombo International Container Terminal (CICT).

The two terminals were given on long-term lease basis to the private sector and Rs. 11,250 million collected as royalty for that period.

It was further revealed that the above revenue was not the direct operating revenue of the port.

According to the information received from the Deputy General Manager (Premises) Letter No. 1/1/156 dated 13 July 2020, the Authority had leased 236 acres, 32.74 Perches and 375.44 square meters of land without obtaining an assessed value from the Department of Valuation as at 31 December 2019.

The Colombo International Container Terminal (C.I.C.T) is the only container terminal currently operating at the Colombo Port that can handle ships over 14.25 meter in depth (Dratf).

The capacity thereof is 2.4 million of twenty equivalent units per year. A number of 374 ships with a draft of more than 14.25 meters had arrived at the terminal and a total of more than 2.6 million container units had been handled in 2019.

It was observed that the maximum capacity was also exceeded. Accordingly, the container handling of the terminal had increased by 8 per cent compared to 2018.

The recession-hit Sri Lanka Treasury is grappling to drive economic growth towards 5 to 6 per cent of GDP this year amidst current fiscal woes, Finance Ministry sources said.

“Climate change has played a part in a shrinking national harvest which peaked at 340 million kilograms in 2013. Since then, it’s been a steady slide but the 2020 crash cannot be attributed entirely to the hot, dry conditions experienced from January to April, thereafter the weather improved and crops were increasing when high grown production was disrupted by workers who stayed away mourning the passing of their senior union leader,” the report stated.

Turkey was the highest buyer of Ceylon tea amounting to 38.8 million kilograms with Iraq coming in next at 33.3 million kilograms and Russia and Iran purchasing 29.6 million kilograms and 15.1 million kilograms respectively. China had purchased 14.1 million kilograms last year.

Sri Lanka’s electricity demand, sales and investment needs are growing rapidly compelling the Ceylon Electricity Board (CEB) to increase end user tariff making it cost effective, and expedite the implementation of power plants.This was highlighted in the Asian Development Bank funded power sector assessment report.

The peak demand was forecasted to cross 3,000 MW by 2020 and reach 4,800 MW by 2030, the report disclosed.

According to findings and forecasts of a Asian Development Bank funded report, the Ceylon Electricity Board (CEB) will have to incur a massive loss of LKR 436 billion for the period of 2021 to 2023 for emergency power purchasing from independent power producers (IPPs).

A proposal has already been made to purchase 800 megawatts of power from these private power producers this year without calling for tenders.

The CEB System Control is deciding on the most feasible option to purchase power using the available data manually.

This method of power purchasing has opened the floodgates for corruption and irregularities as identifying the least cost method and viable option based on the available data cannot be cannot be carried out manually and it requires relevant software, it was stated.

The CEB plans indicate the investment requirements for power generation to be USD 2400 million from 2020–2025 to meet the growing demand at the lowest cost, the report added.

The capacity shortage has to be resolved by building larger power plants. The CEB has proposed that the two cancelled coal-fired power plants be revived and built using the latest technology.

Additionally, two combined cycle power plants are required to be built to cater to seasonal shortages of hydro power.

“Matching investments are required for transmission estimated to be USD 320 million and in distribution (to serve the growing demand and to improve reliability of supply to customers) a further USD 60 million,” the report said.

Around 69 per cent of the total installed capacity in the country is owned by CEB; while IPPs and small power producers (SPPs) own the rest.

All IPPs are diesel-fired, operating on 10 to 20 year power purchase agreements. All SPPs are renewable energy-based, with 15 or 20 year contracts.

In order to offset this massive loss, the Ministry of Power has no alternative other than increasing electricity tariff by at least LKR 2.50 per unit for this period, the report recommended.

Emergency power purchasing at higher rates from IPPs has now become a significant burden to the economy. Annual purchases of power average from LKR 160 billion to LKR 200 billion.

When the CEB purchases at higher rates, the party involved with the transaction gains a commission for supporting the business, the National Movement for Consumer Rights Protection alleged.

The higher the margin between the buying and selling rate, the higher these parties gain, it said.

Cash strapped Sri Lanka government is receiving assistance from the Netherlands to implement its ambitious rural infrastructure development programme of building roads and bridges in remote villages. The government has allocated additional LKR 20, 000 million to commence construction on rural roads under the 100,000 km programme and LKR 7, 000 million to build 10,000 rural bridges connecting the villages to the external environment.

President Gotabaya Rajapaksa has assigned officials to complete the project for the construction of 100,000 km of rural roads and connect them with the main road network by 2024.

The President stated that new bridges will be built replacing hanging, wooden plank and small bridges. The construction of 8000 km of roads has commenced and 400km of it has already been completed in the last few months.

In the wake of the government’s new rural bridges programme, the Finance Ministry has received a pledge from the Rabobank of Netherlands to provide 52.1 million euro financial assistance to construct approximately 250 steel bridges island wide especially in the rural areas.

Finance and Economic Affairs Ministry Secretary, S. R. Attygalle has reportedly signed this Credit Facility Agreement at the Ministry of Finance.

The Sri Lankan Government has accorded high priority for connectivity improvement within the country, with a view to providing full benefits to the remote villages from mainstream development activities in the country, the Ministry has stated.

Accordingly, the Government is planning to construct 10,000 bridges in rural areas to establish connectivity for transportation.

A large number of lagging villages will be connected with transport facilities through this project, which will in turn facilitate easy access to market, education and healthcare facilities to villagers.

The announcement of the agreement signed between Sri Lanka’s Finance Ministry and the Rabobank of the Netherlands for a project to construct steel bridges indicates the opening up of a business opportunity in the country’s ongoing development programme.

The Sri Lankan government is engaged in the development of the rural road network and connectivity. Hence, there are many projects in the roads and highways sector in Sri Lanka with most programmes having secured foreign funding lines.

Therefore, foreign businesses could seriously explore business opportunities in Sri Lanka’s roads and highways sector.