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Sunday June 16th, 2024

Sri Lanka AG-headed delegation meets X-Press Pearl shipowner’s lawyers in Singapore

ECONOMYNEXT – A delegation led by Sri Lanka’s attorney general has met lawyers representing the ship-owner interests in the X-Press Pearl maritime disaster in a meeting that discussed, among other things, interim claims made by Sri Lankan authorities.

According to a statement from the President’s Media Division (PMD), the meeting took place in Singapore on July 18 and 19. The Sri Lankan delegation, appointed by the cabinet of ministers, comprised nine officials.

The PMD statement called the meeting a “significant development” but clarified that it would have “no bearing on the ongoing legal proceedings initiated by the government of Sri Lanka in Singapore, which are already underway.”

The meeting was convened in response to a request made by the lawyers on behalf of their clients following a claims action filed by Sri Lanka in Singapore in April. Both parties addressed several critical aspects related to the incident and its aftermath during this week’s meeting, the statement said.

“A key focus of the talks was to assess the outstanding interim claims put forth by the Marine Environment Authority and the Ministry of Fisheries from the Government of Sri Lanka. In response to their concerns, the Sri Lankan delegation received assurance from the ship-owner interests’ insurers that the assessment of these claims would be conducted promptly and efficiently,”the PMD said.

The attorney general, representing the government of Sri Lanka, has highlighted at the meeting the urgency of concluding the ongoing wreck decommissioning and debris recovery works within Sri Lankan waters. The PMD said the insurers of the ship-owner interests had responded positively to this, indicating their cooperation in addressing this issue.

The lawyers had also expressed their willingness to consider claims made by the Sri Lankan government concerning the damage caused to the marine environment and had showed openness to further discussions with Sri Lanka in the near future, the PMD said.

“The talks mark a significant step in resolving the aftermath of the X-Press Pearl Incident and indicate a cooperative approach by all parties involved. As the assessment of outstanding claims and environmental damage claims progresses, both the Sri Lankan government and the ship-owner interests hope to reach a fair resolution that takes into account the environmental impact and the interests of all stakeholders,” it said.

In May Sri Lanka’s main opposition party the Samagi Jana Balawegaya (SJB) issued letters of demand to the owners of the MV X-Press Pearl containership seeking compensation for the worst maritime disaster in the country’s history.

The ship, operated by Singapore based X-Press Feeders, caught fire and sank off the Colombo in May 2021 with a cargo of chemicals.

The opposition has accused the government of coming up with excuses for not actively pursue the damages claim.

Justice Minister Wijeyadasa Rajapakshe told parliament in May that the government had filed a claim in Singapore but will also fight the case in the UK after insurers and owners went to Admiralty Courts seeking to limit compensation to 19.2 million sterling pounds.

An expert committee appointed on the matter has estimated the total damage to 6.4 billion US dollars.

Sri Lanka has sought 22.1 million US dollars in damages for the marine environment and 273.014 million US dollars for fishermen, Rajapasksa told parliament.

India has sought 495.3 million Indian rupees from Sri Lanka as the cost for firefighting operations, which was 1941.5 million in Sri Lankan rupees.

Sri Lanka has hired Dentons Rodyk and Davidson LLP legal firm in Singapre and Sparke Helmore of Australia to argue its case.

The owners of the vessel and its insurers have gone to an Admiralty Court in the UK seeking to cap damages to the ship and the marine and coastal environment at 19.2 million sterling pounds, Rajapakshe said.

King’s Counsel Peter MacDonald from DAC Beachcroft firm has been hired to represent Sri Lanka in seeking a removal of the cap on damages, he said. (Colombo/Jul20/2023)

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Sri Lanka car import relaxing roadmap given to IMF: State Minister

ECONOMYNEXT – Sri Lanka has submitted a roadmap on relaxing vehicle imports to the International Monetary Fund, State Minister of Finance Ranjith Siymabalapitiya said as the country recovers from the worst currency crises in the history of its central bank.

The import relaxation will allow vehicles for public transport, goods transport, then motor cycles and cars use by private individuals and after that, luxury cars, Minister Siyambalapitiya said.

Luxury cars however attract the highest taxes for each dollar spent on imports.

Economic analysts have characterized vehicle import controls as a ‘cascading policy error’ that follows inflationary rate cuts, which then deprive taxes to the state and triggers more money printing and more forex shortages, requiring even higher corrective interest rates and a contraction of economic activities to save the rupee.

According to the latest IMF report car import controls may have led to revenue losses of 0.7 to 0.9 percent of GDP.

Sri Lanka started controlling imports few years after a central bank was set up in 1950 and also tightened exchange controls progressively, so that macroeconomists using post-1920 spurious monetary doctrines taught at Anglophone universities could print money through various mechanisms to suppress rates.

Sri Lanka is working with the IMF as a guide on many issues and the roadmap was submitted to the agency on June 14, Minister Siyambalapitiya said.

The IMF in an economic report released last week the plan was expected to be submitted by June 15.

Whatever the IMF’s faults, which some wags have called ‘progressive Saltwaterism’, the agency does not advocate import controls as solution to balance of payments problems, despite a Mercantilist fixation with the current account deficit in countries with reserve collecting central banks, analysts say.

Import controls have the same effect as import substation on the balance of payments, which is none, classical economists have pointed out and is now mainly a problem associated with macro economists and economic bureaucrats of so-called basket case countries.

Any pressure on the currency or missed reserves targets in the IMF program has come in the past only if the central bank printed money to suppress rates as credit growth picked up from car imports.

Sri Lanka had 3,000 items under import controls when rates were suppressed with printed money from 2020 to 2022 but eventually ended up with the worst currency crisis triggered by macro economists in the history of the country and eventual external default.

A committee made up of the Department of Trade and Fiscal Policy of the Finance Ministry, the Department of Registration of Motor Vehicles, the Central Bank and two associations representing vehicle imports were appointed to come up with the roadmap, he said. (Colombo/June15/2024)

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Chitrasiri Committee presents draft constitution for Sri Lanka Cricket

ECONOMYNEXT – A draft constitution for Sri Lanka Cricket, the governing body for cricket in the island, prepared by a committee headed by retired Supreme Court judge K T Chitrasiri, was presented to President Ranil Wickremesinghe today (15).

The Sri Lanka team were ignominiously knocked out of the Men’s T20 World Cup tournament this week, sparking renewed criticism of the team and the governing body.

Last November, a cabinet sub-committee was appointed to address challenges faced by Sri Lanka Cricket and provide recommendations after consecutive losses became a hot topic in parliament.

After parliament decided to remove the administrators of the sport, the International Cricket Council (ICC) Board suspended Sri Lanka Cricket’s membership.

Based on the sub-committee’s recommendations in its report, the Cabinet then appointed an expert committee to draft a new constitution for Sri Lanka Cricket.

The committee headed by judge K T Chitrasiri includes President’s Counsel Harsha Amarasekara, Attorney-at-Law Dr Aritha Wickramanayake and Chairman of the Sri Lanka Chamber of Commerce Duminda Hulangamuwa.

Deputy Solicitor General Manohara Jayasinghe, and Shamila Krishanthi, Assistant Draftsman representing the Legal Draftsman’s Department, and Loshini Peiris, Additional Secretary to the President were also on the committee. (Colombo/Jun14/2024)

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Sri Lanka’s Cable Solutions in Rs605mn IPO

ECONOMYNEXT – Sri Lanka’s Cable Solutions Limited will make an initial public offering of ordinary voting shares on the Diri Savi Board of the Colombo Stock Exchange (CSE).

The CSE had approved, in-principle, an application submitted by the company, for the listing of its ordinary voting shares by way of an offer for subscription and an offer for sale.

For subscription, 14,666,600 shares would be offered at 7.50 rupees a share.

For sale, 66,120,000 shares would be offered at 7.50 rupees a share.

The opening of subscription list is July 23. Copies of the prospectus would be made available to trading participants on July 9. (Colombo/Jun15/2024)

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