Construction and Real Estate

Sri Lanka UDA to take back Krrish, Destiny, non-operational buildings in lands it owns

Melkishiya Andrew

Thursday March 16, 2023 8:33 pm

By Melkishiya Andrew

Thursday March 16, 2023 8:33 pm

ECONOMYNEXT – The Sri Lanka’s Urban Development Authority is planning to take over abandoned and unfinished buildings in the Colombo district constructed in UDA- leased lands and it is planning to submit a cabinet paper to take over unfinished Krrish and Destiny buildings, a top government official said.

Both Krrish and Destiny were ambitious projects under former president Mahinda Rajapaksa, who gave priority to the construction sector.

Nimesh Herath, Chairman of the Urban Development Authority said UDA lands are given for some of such mega projects on a long term lease.

“Under this method, the UDA has the authority to take back the land because it owns the land,” Herath told EconomyNext.

“At the moment we are only focusing on these two (Krrish and Destiny) buildings as they are highlighted. But if there is a development opportunity of getting the lands, we will discuss it by bringing in the necessary laws.”

The valuation of the two buildings is yet to be done, he said.

“In terms of valuation, we have appointed an internal committee, and we are working on that, but the issue is, there are buyers who have already paid to those developers,” Herath said.

The management companies of Krrish and Destiny have stopped the construction midway. Krrish has taken partial and full payment for some apartments it was to complete.

The move comes as an precedented economic crisis has forced Sri Lanka to look for new resources to earn foreign currency. Tourism has started to see some increase in arrivals of foreign visitors since December last year.

The price fluctuation due to sharp depreciation of the rupee has discouraged constructors, and many were on hold until the prices stabilized. The delay has caused heavy cost escalation for constructors and higher opportunity cost for the government, analysts say. (Colombo/ March16/2023)

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Accidents

Sri Lanka establishes committee to investigate aircraft incidents

An aircraft lands at the Jaffna International Airport, which was opened in October 2019 and promises to push the tourism frontiers in Jaffna.

Roshani Fernando

Thursday March 23, 2023 5:39 pm

By Roshani Fernando

Thursday March 23, 2023 5:39 pm

ECONOMYNEXT: Sri Lanka’s has established an expert committee under the state-run Civil Aviation Authority to investigate aircraft accidents and to implement precautionary methods in the Sri Lankan airspace, an Official said.

“Even if it is only one flight, there is a chance an accident may occur,” Civil Aviation Authority of Sri Lanka, Director General, P. A. Jayakantha said.

“This particular committee is there to investigate aircraft accidents and act as a mechanism to take over if something goes wrong”.

Sri Lanka has encountered around 2,700 minor aircraft accidents and incidents mostly on the ground in the 19 years through 2021, the CAA annual reports showed.

The new committee will analyze the past accidents and take precautionary measures while also conducting investigations and provide independent reports in the future, Jayakantha said.

The team is provided with required training and qualifications by the CAA along with an International organization, free of charge.

“Internationally also it is a requirement to have a team to investigate the aircraft accidents,” Jayakantha added.

“For a long time we have not fulfilled this requirement and that is why we established this team with the cabinet approval. Moreover, recently, Sri Lanka’s two aircrafts, one training aircraft and a commercial aircraft met an accident”

The committee will be on active duty, until the Accident Investigation Act is passed and a proper Aircraft Accident and Incident Investigation Bureau is established. (Colombo/ Mar23/2023)

Bonds & Forex

Sri Lanka bond yields steady, Rupee 319/325 at close

Thursday March 23, 2023 5:35 pm

ECONOMYNEXT – Sri Lanka’s treasury bond yields closed steady on Thursday while rupee closed weaker, dealers said.

A 01.07.2025 bond closed at 30.60/31.00 percent on Tuesday, down from 30.25/75 percent on Wednesday.

A 15.09.2027 bond closed at 27.80/28.10 percent, steady from 27.90/28.00 percent from Wednesday.

Sri Lanka rupee closed at 319/325 against the US dollar depreciating from 318/320 from a day earlier. (Colombo/ March23/2023)

Markets

Sri Lanka shares dive to two-week low on local debt restructuring fears

Thursday March 23, 2023 5:35 pm

ECONOMYNEXT – The Sri Lanka market fell for a fourth session to a two-week low on Thursday, led by financials, as worries over domestic debt restructuring continued after the IMF loan was approved earlier this week resulting in investors adopting a wait-and-see approach until further clarity was provided, analysts said.

The main All Share Price Index (ASPI) closed down 1.38 percent or 131.07 points to 9,395.98, lowest since March 02.

Analysts said, majority of the banks have been on slower investment trends on fears of domestic debt restructuring after the IMF approval and waiting for more clarity on the local debt restructuring.

“The market is on muted sentiments despite the IMF loan being approved and is going through a period of consolidation,” Ranjan Ranatunga of First Capital Holdings said.

The market saw a net foreign outflow of 298 million rupees and the total offshore inflows recorded so far in 2023 to 3.3 billion rupees.

The most liquid index, S&P SL20, closed 1.64 percent, or 45.33 points, down at 2,722.94.

The market saw a turnover of 3.4 billion rupees on Thursday, above this year’s daily average of 1.8 billion rupees.

This is the highest turnover generated since March 08, which is when the market was driven off of positive sentiments from International Monetary Fund deal hope after Chinese assurances.

Top contributors to revenue was Agalawatte Plantations, on off board transactions of a stake change, contributing revenue of 1.6 billion rupees, Ranatunga said.

Top contributors to revenue industry wise was Food and Beverage and Telecommunications.

Sri Lanka Telecom has been seeing positive uptrends as the Secretary to the Treasury has informed the Board of Directors of Sri Lanka Telecom PLC (SLT) and Lanka Hospitals PLC that the Cabinet of Ministers has granted approval in principle for the divestment of the stakes held by the Treasury Secretary in the two companies.

Top losers were Sampath Bank, Hatton National Bank and Commercial Bank.

Sri Lanka is looking at options to re-structure domestic debt, or local law local currency debt (LLLC), without harming the banking sector and announce them the International Monetary Fund said in a report.

Banks have been witnessing profit taking and selling pressures after continuous uptrends prior to the IMF loan had been approved.

Analysts said, selling pressures is expected to ease as the IMF hopes to reduce inflationary pressures which will in turn lead to reductions in interest rates. (Colombo/Mar23/2023)