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Wednesday February 1st, 2023

Sri Lanka halts Japan funded Colombo light rail project

ECONOMYNEXT – Sri Lanka has halted a Japan funded light rail project for the capital Colombo as it was too costly and brought low returns, government ministers said.

The light rail project was expected to solve the traffic problem in the key Colombo to Malabe corridor and also several other corridors in other stages.

“The project was not halted by Japan but the government of Sri Lanka,” Information Minister Bandula Gunewardene told reporters in Colombo.

Minister Ramesh Pathirana said the project was deemed to be high cost and brought low returns.

Sri Lanka signed a 30 billion yen concessionary loan with the government of Japan in March 2020 for the projects.

He said many buildings will be affected as a result of the LRT.

However the Japan International Corporation at the time said by building the LRT on towers – as is done in other built-up cities – disruptions would be minimized. In built-up cities, urban transit systems are either built on towers or underground.


Sri Lanka gets Japanese Rs48bn soft loan for light rail

Minister Gunewardenes claims that the project would be awarded to a Chinese company at a 6 percent interest rate compared to a lower rate by Japan may be made by those who would stand to benefit from the light rail project.

There had been concerns that halting rail projects which have solved traffic problems and made urban transit from Bangkok to Delhi more efficient would have long term negative fallouts in urban pollution and productivity.


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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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Sri Lanka awaits salvage of X-Press Pearl wreck to make second damage claim

ECONOMYNEXT – Sri Lanka is awaiting the removal of the sunken wreck of MV X-Press Pearl, which caught fire and sank off Colombo Port to make a second environmental damage claim, an official said.

China-based Shanghai Salvage was hired to remove the wreck in February 2021. It was originally expected to be removed in 120 days but bad weather had delayed the activity.

“The second interim claim is pending until the wreck is removed,” Dharshani Lahandapura told Chairperson of Marine Environment Protection Authority, (MEPA) told EconomyNext.

“We cannot do anything to prepare a final report since we assume the pollution is happening even now at the moment.

On May 20, 2021, Singapore flagged container vessel MV X-Press Pearl, caught fire spilling chemicals and plastic pellets in to the sea.

Sri Lanka has received 40 million dollars from insurers in an interim claim.

“The vessel had nitric acid, caustic soda, and some other chemicals which are actually used for personal products like perfume,” Lahandapura said.

“We had electric and electronic equipment, and had lithium in the container which is highly hazardous.

“The evacuation is happening now at the moment. They have cut the ship into two pieces and differentially floated one part.”

An expert committee appointed by the government had warned that more damage could occur during salvage if material inside the ship spills into the sea, Sri Lanka’s Justice Ministry said in a statement. (Colombo/ Feb 01/2023)

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