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Tuesday February 27th, 2024

Sri Lanka hotels brace for 12-month slump on Covid-19 hit

ECONOMYNEXT – Sri Lanka’s tourism industry is bracing for a year long downturn with the Coronavirus crisis coming on top of a hit from Easter Sunday attacks in April 2019, but there were tentative bookings for next year already, officials said.

Sri Lanka Hotel Association, Chairman, Sanath Ukwatte said two crises coming on top of each other had hit the industry but it had gone trough bad times earlier and somehow recovered.

The government and banks had also given debt moratorium.

“Recovery seems 6, 8 month or maybe a year.” Ukwatte told an online forum organized by Advocata Institute, a Colombo-based think tank.

“We are thankful to the government for coming to our rescue when we asked. They have introduced moratoriums and working capital loans for our industry”

“We need to revive the industry as soon as it is safe to do so. So we need to engage the government and health sector to compromise on how to bring tourist without being a threat to the health of the country.”

Sri Lanka’s tourism development authority said a raft of new regulations to cut risks of tourists and protect staff were being made.

Sri Lanka’s tourism arrivals fell 70 percent in March. On March 19, all arrivals were closed. At the time about 20,000 foreigners were in the country. An estimated 10,000 were still in the country by March.

Sri Lanka Association of Inbound Tour Operators said their employees had taken a salary cut and were finding it difficult to pay value-added taxes, with the deadline coming shortly.

Ukwatte said with the current situation faced by the global tourism industry will take another year to recover.

However, Ukwatte said there were some tentative bookings for 2020.

“We are receiving inquires and attentive bookings from January onwards” Ukwatte said. “Industry is adapting a very flexible policy where a tourist can cancel a booking without any penalty before the arrival.”

Ukwatte said in order to recover from the crisis Sri Lanka Hotel Association will join with the Sri Lanka Tourism Bureau.

“We are planning to work with the SLTB, perhaps plan some early bird offers. We can match our offers with the bank offers. We have to induce the market and people to travel again.”

Ukwatte said even the industry promote offers it should not lower its prices due to the higher operation cost in the country.

“We should not down our prices, we should be very careful with our prices. Because hotels can’t survive with cheap tourism. Our operation cost is higher than in Thailand”.

Ukwatte hoped a vaccine would be found soon to end the pandemic.

“We are hopeful and optimistic. Tourism faced some severe hits in the past years but it has always come back,” Ukwatte said.

Several respiratory pandemics had including SARS ended without any vaccine or so-called herd immunity.

Vietnam was the first country to be declared free of SARS. Both Sri Lanka and Vietnam also completely killed Wave I COVID-19 infections from China and did not contribute to the global pandemic. (Colombo/ April 21/2020-sb)

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Sri Lanka president appoints Supreme Court-faulted official as police chief after CC clearance

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe appointed Deshbandu Tennakoon as the 36th Inspector General of Police (IGP) of the country after the Constitutional Council (CC) cleared the official who along with three other police officers were asked by the Supreme Court to compensate 2 million rupees in a fundamental rights case last year.

“President Ranil Wickremesinghe has appointed Deshbandu Tennakoon as the IGP in accordance with the provisions of the Constitution,” the President’s Media Division (PMD) said.

The island nation’s Supreme Court on December 14 ordered Tennakoon when he was the Acting IGP and three other officials to pay a compensation of 500,000 rupees each for the violation of the fundamental rights of an individual.

The Supreme Court also instructed the Police Commission to take disciplinary action against the said Police officers after it considered the petition filed by W. Ranjith Sumangala who had accused the Police officers of violating his fundamental rights during his detention at Mirihana Police Station in 2011.

The Supreme Court held that the four police officers violated the fundamental rights of the petitioner by his illegal arrest, detention and subjection to torture at the Mirihana Police Station, which was under the supervision of Tennakoon at the time of the arrest.

President’s Secretary Saman Ekanayake presented the official appointment letter to Tennakoon on Monday (26) at the Presidential Secretariat.

When Tennakoon was asked over if the Supreme Court decision would have an impact on his appointment as the IGP last week, he declined to comment, saying that it was a Supreme Court matter and he does not want to say anything about it.

Tennakoon was also criticized by Colombo Archbishop Cardinal Malcolm Ranjith when he was appointed as the Acting IGP citing allegations against him related to security lapses leading up to the Easter Sunday attacks which killed at least 269 in April 2019.

However, Tennakoon rejected the allegations. (Colombo/Feb 26/2024)

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No water tariff hike in Sri Lanka this year: Minister

Millennium Challenge Corporation Photo.

ECONOMYNEXT – Sri Lanka’s planned water tariff formula is ready, and the government will implement it this year only if the formula’s tariff is lower than the current price, Water Supply Minister Jeevan Thondaman said.

President Ranil Wickremesinghe’s government has been implementing IMF-led pricing policies on utilities and the Water Supply Ministry has already come up with a formula.

“There is a water tariff formula in place right now and we are waiting for it to be drafted and seek approval from the cabinet,” Thondaman told reporters at a media briefing in Colombo on Monday.

“Once this water tariff formula is in place, there will be an annual revision with an option of biannual review.

The formula has been developed with the help of the Asian Development Bank. The formula includes electricity and exchange rate among many others as components like the fuel formula.

The National Water Supply and Drainage Board (NWS&DB) increased the water tariff in August 2023, claiming that the operating cost had been increased owing to high interest payment for bank loans and increased electricity prices.

The last year revision saw the consumers paying 30-50 percent increase from the existing water bill.

Minister Thondaman said he will implement the new formula this year only if there is a reduction.

TARIFF CUT WILL BE IMPLEMENTED 

“We will have to wait to see what the formula is. If the formula shows us there needs to be a reduction in the water tariff, we can implement it. But if there is an increase, why should we burden the people when we are on a road to recovery?” he said.

He said a group of experts including University Professors are working on the formula and the numbers.

“Once they come with the number, we will have to take a decision on whether we are going to impose on the people or not,” he said.

“We have already spoken to the Asian Development Bank and informed them we have established the formula. But according to the ADB requirement of this policy-based loan, the implementation period is only in 2025.”

“But right now, you want to take the approval for the formula for sustainability.”

The Energy Ministry is considering a drastic slash in electricity tariff soon. Thondaman said the exact numbers will be decided on after the finalized electricity tariff.

However, he said that as per the formula, there has to be a up to 10 percent increase in the water tariff as of now.

“Given the current formula set up, there must be around a 9-10 percent increase. It was actually at 14 percent. What we have done is since it is at 14 percent, we also did a calculation to see how we can do a cost cutting,” he said.

“So, despite our cost cutting measures, there will be an increase of 9 or 10 percent. But we will not be imposing it as of now because this year is meant to be policy sector reforms. Next year is meant to be the implementation.”

“As per August 2023 water tariff hike, we are able to come close to sustainable. So right now, there is no issue in the water sector. But a formula eventually needs to be established.” (Colombo/Feb 26/2024)

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Sri Lanka rupee closes at 310.80/311.00 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 310.80/311.00 to the US dollar Monday, from 310.95/311.05 on Thursday, dealers said.

Bond yields were down.

A bond maturing on 01.02.2026 closed stable at 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.80/90 percent down from 11.90/12.05 percent.

A bond maturing on 15.03.2028 closed at 12.00/12.15 percent down from 12.10/25 percent.

A bond maturing on 15.07.2029 closed at 12.20/70 percent from 12.20/95 percent.

A bond maturing on 15.05.2030 closed at 12.30/70 percent down from 12.40/95 percent.

A bond maturing on 15.05.2031 closed at 12.60/80 percent from 12.45/13.00 percent.

A bond maturing on 01.07.2032 closed at 12.50/90 percent from 12.50/13.30 percent. (Colombo/Feb26/2024)

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