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Saturday May 18th, 2024

Sri Lanka p’ment will not debate controversial defence university bill this week

KDU hospital, Werahera

ECONOMYNEXT – The controversial Kotelawala National Defence University (KNDU) bill will not be debated in Sri Lanka’s parliament this Friday (06), Minister Chamal Rajapaksa said.

Responding to a question by former prime minister and United National Party (UNP)  MP Ranil Wickremesinghe in parliament Wednseday (04) morning, Rajapaksa asked for more time to present the bill.

“I will not be presenting it that day as I believe MPs and the public should be given more time to express their views [on the bill],” the minister said.

Opposition leader Sajith Premadasa, meanwhile, called for a complete cancellation of the bill with a view to protecting free education. Premadasa requestied the government to start from scratch and hold discussions with all stakeholders.

The KNDU bill has been controversial for a number of reasons, chief among which is allegations that it will lead to militarisation of higher education.

The General Sir John Kotalawela University came into being under a UNP government in 1980 as a part of an armed forces modernisation scheme.  The university was established by the Military Academy Act of 1981 and the amending Acts of 1988 and 2007.  Section 128 exempts the KNDU rom Section 123 of the Universities Act. In 2012 fee paying students were admitted to this university.

The controversial South Asia Institute of Technology and Medicine (SAITM) was incorporated into the KNDU in 2017.

The current bill was first presented in 2018 under the previous United National Party (UNP)-led Yahapalana government. The current government under President Gotabaya Rajapaksa brought in the bill again in July for a second reading.

Sri Lanka’s opposition parties including the main opposition Samagi Jana Balavegaya, which broke away from the UNP, the UNP itself, and the leftist Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) have said that the bill, if passed, could remove the KNDU from the purview of the ministry of education and the University Grants Commission (UGC) and be brought entirely under the purview of the ministry of defence.

As per clause 18 of the bill, the board of governors of the KNDU will be appointed by the minister of defence and will consist of nine members. This includes the secretary and additional secretary to the ministry of defence, one nominee each from the UGC and the treasury, the chief of defence staff, the commanders of the army, navy and air force, and the vice-chancellor of the university who will be a military officer.

Clause seven of the bill states: Where the [defence] minister is of the view that any situation prevailing in the university is likely to endanger national security or is detrimental or prejudicial to national policy or is likely to disrupt the smooth functioning of the university, he may direct the board of governors to take all such steps as he may deem necessary, to bring such situation under control.

Clause five (o) of the bill states: “The university shall, subject to the provisions of this act, have the power to establish campuses, colleges, faculties, departments, centres, academic institutions and such other specialised institutes, schools and divisions as may be required by the university.”

Sri Lanka’s leftist parties have historically been opposed to privatising education. (Colombo/Aug03/2021)

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Sri Lanka suffers over $138mn foreign outflow from govt bonds in 2024 after rate cuts

ECONOMYNEXT – Foreign investors have dumped 41.6 billion-rupee ($138.6 million) worth of Sri Lanka government securities in the first 20 weeks of 2024, the central bank data showed, after reduction in the key policy interest rates.

The foreign holding in Sri Lanka’s treasury bills and treasury bonds fell to 75.9 billion rupees on the week ended on Friday (17), May 2024, from 117.4 billion rupees on the week ended on December 29.

The central bank rate has reduced the key policy rates by 50 basis points so far in 2024, extending the rates cut by 700 basis points since June last year.

The rupee appreciated 9.1 percent in the first four months, but the gain failed to attract foreign investors amid a dragged debt restructuring negotiation with external private creditors.

Currency dealers said lackluster demand for dollars due to dampened imports with heavy controls, boom in both tourism revenue and remittances have helped to increase the dollar liquidity in the market, leading to the appreciation of the local currency.

The dealers said foreign investors can earn capital gain if they had bought government securities before the appreciation and now the offshore investors might be selling their bonds.

“They are also discouraged by policy rate cut because that will reduce their returns from the rupee bond investments,” a currency dealer said.

The yield in 12-month T-bills has fallen 336 basis points in the first four months of this year, the central bank data showed.

The central bank also reduced the Statutory Reserve Ratio (SRR) of commercial banks by 200 basis points in August last year to boost liquidity in the market with an aim to reduce market interest rates.

Under tough International Monetary Fund (IMF) conditions for its $3 billion loan program, the central bank raised key monetary policy rates in 2022 and last year to bring down inflation which hit over 70 percent in 2022. The inflation has fallen to the lower single digit now.

The rupee has appreciated to around 300 against the US dollar this week from around 330 level early in November. The local currency was at 365 rupees against the US dollar in early 2022. Depreciation causes capital loss for foreign investors. (Colombo/May 18/2024)

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Sri Lanka’s ‘Sancharaka Udawa’ tourist fair seeks to involve universities

ECONOMYNEXT – Sri Lanka’s ‘Sancharaka Udawa’ tourism fair kicked off this week to promote interaction between industry stakeholders and relevant Government bodies, including the Tourist Police, and also universities.

“Several universities, including Colombo, Uva Wellasa, Kelaniya, Sabaragamuwa and Rajarata were given free stalls to facilitate student interaction with industry professionals,” Chairman of the Sancharaka Udawa Organising Committee, Charith De De Alwis said in a statement.

The event takes place today (18) at the BMICH and houses stalls for hoteliers, tour and transport services, with a goal of attracting 10,000 visitors.

Organized by the Sri Lanka Association of Inbound Tour Operators (SLAITO) and the Sri Lanka Tourism Promotion Bureau (SLTPB), the 11th edition of Sancharaka Udawa offers a platform for both B2B and B2C sectors.

“Sancharaka Udawa houses over 170 exhibitors and a footfall of more than 10,000 visitors,” De Alwis said.

This year’s edition will include participants from outbound tourism sectors to facilitate capacity building. The event provides networking opportunities for industry newcomers and veterans.

“The networking platform offers opportunity for small and medium-sized service providers integrating them into the broader tourism landscape. The anticipated outcome is a substantial increase in bookings particularly for regional small-scale tourism service providers.” (Colombo/May18/2024)

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Sri Lanka’s CEB sells LTL shares to West Coast IPP for Rs26bn

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board has sold shares of an affiliate to West Coast Power Company Limited, an independent power producer giving profits of 25.9 billion rupees in the March 2024 quarter, interim accounts showed.

The sale has been carried out as a transfer.

“Twenty-eight percent (28-pct) of share ownership of CEB within LTL Holding’s equity capital has been transferred to West Coast Power Company Ltd for a total consideration of Rs 26 billion as part of a partial settlement of outstanding dues…” the March interim accounts said.

“This transaction resulted in a net gain of Rs25.9 billion rupees which has been recognized and reflected in the ‘Gain from Share Disposal’ in the individual financial statement in CEB.”

LTL Holdings is a former transformer making unit of the CEB set up with ABB where the foreign holding was sold to its management.

The firm has since set up several IPPs.

West Coast Power operates a 300MW combined cycle IPP in Kerawalapitiya promoted by LTL group liked firms in which both the Treasury and Employees Provident Fund also have shares.

Its operational and maintenance contract is with Lakdhanavi, another private IPP. The firm has been paying dividends.

The capital gain from the transfer of shares helped the CEB post profits to 84 billion rupees for the March 2024 quarter.

CEB reported gross profits of 62.7 billion rupees from energy sales and 30.6 billion rupees in other income and gains in the March 2024 quarter. Other income was only 3.1 billion rupees in last year. (Colombo/May18/2024)

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