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Saturday June 3rd, 2023

Sri Lanka deforestation: Irrigation reservoirs to be built in Sinharaja

Sinharaja forest/Rainforest Protectors Trust

ECONOMYNEXT – The Sri Lankan government is proposing to build reservoirs and an irrigation scheme in the Sinharaja rainforest which is protected as a UNESCO Heritage site and scientists believe contains flora and fauna from the Jurassic period.

The country’s Irrigation Minister Chamal Rajapaksa said Saturday that two irrigation reservoirs would be constructed inside the Sinharaja rainforest to provide clean water to his home district of Hambantota enraging environmentalists.

The news comes as controversy rages around whether the island’s fragile environment has been damaged by rampant deforestation that has taken place since President Gotabaya Rajapaksa took power around one-and-a-half years ago.

The President yesterday hotly denied the allegation that environmental degradation has increased on his watch.

The Irrigation Minister, one of the elder brothers of the President, said that two irrigation tanks each spanning 5-acres will be constructed inside the Sinharaja rainforest.

He made these statements, speaking in Weeraketiya, in the Hambantota District on March 20, 2021, NewsFirst reported.

According to Rajapaksa, the proposed project would move water from Gin and Nilawala rivers to Giruwapattuwa and will provide water to Tangalle, Beliatte, Weeraketiya, Walasmulla, Dambarella and other areas.

Noting that Sinharaja is a protected forest he promised that reforestation would be carried out on a 100-acre land to compensate for the 10-acres lost in the Sinharaja forest on another site.

He proposes rubber cultivation, a monoculture, to increase Sri Lanka’s forest cover adding that income could be generated by contributing to tire production.

Senior Environmental Scientist Hemantha Withanage says the proposal to construct two reservoirs in the Sinharaja Rainforest area will seriously affect the biodiversity of this fragile area even at the smallest level.

Withanage says the creation of two stagnant bodies of water and the planned 22 kms of road that will be built will “change the flow of water in the region.”

This he says will affect aquatic life at the lowest level.

He told EconomyNext that the first time this idea was proposed was in the 1950s to divert the water of the Nilwala and Gin rivers to take water to Hambantota.

The project was revived during the last Rajapaksa regime by Minister Nimal Siripala de Silva and some LKR400 million was passed for it and a contract signed with a Chinese company.

However, the project did not go through at the time and an Environment Impact Assessment was not carried out by the Central Environmental Authority at the time.

“We cannot say what exactly would happen without an environmental impact assessment,” Withanage said.

He added that the original plan seems to have been modified somewhat and the reservoirs have been moved further up the hill to avoid damage to the existing Lankagama area.

He also predicts that a land area of around 15 hectares will be denuded of the forest because of the construction “which is a significant part of the Sinharaja forest.”

Sri Lanka has only 17 per cent of its forest cover remaining. Sinharaja rainforest isn’t unlike the other secondary forests.

According to the United Nations Educational, Scientific and Cultural Organization (UNESCO) which has identified the rainforest as one of the world’s heritage sites, Sinharaja is the island’s last viable area of primary tropical rainforest and the flora found in the forest dates back to the Gondwanaland period.

Gondwanaland is a supercontinent that existed almost 550 million years ago and broke up during the Jurassic period about 180 million years ago.

“The property’s flora is a relic of Gondwanaland and provides an important component to our scientific understanding of continental drift and an outstanding site for the study of the processes of biological evolution,” UNESCO says in its blog.
It records that more than 60% of the trees are endemic and many of them are considered rare.

“There is much endemic wildlife, especially birds, but the reserve is also home to over 50% of Sri Lanka’s endemic species of mammals and butterflies, as well as many kinds of insects, reptiles and rare amphibians.” (Colombo/Mar22/21)

Edited by Arjuna Ranawana

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Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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