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Tuesday May 30th, 2023

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

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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  1. sacre blieu says:

    This means even inheriting the liabilities of the defaulter, with the citizen being made the victim of the losses. The deal makers making a break for shelter.

  2. sacre blieu says:

    Take back without the liabilities and debt. Otherwise, this would end up as either a fraud or a racket. Those who invested in it in whatever way, knew of the risk they were taking, as in any investment with ups and downs. This type of debt invariably is burdened the public.

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  1. sacre blieu says:

    This means even inheriting the liabilities of the defaulter, with the citizen being made the victim of the losses. The deal makers making a break for shelter.

  2. sacre blieu says:

    Take back without the liabilities and debt. Otherwise, this would end up as either a fraud or a racket. Those who invested in it in whatever way, knew of the risk they were taking, as in any investment with ups and downs. This type of debt invariably is burdened the public.

Sri Lanka food producers on countdown; 6-months to reduce trans fat content

ECONOMYNEXT – Sri Lankan food manufacturers only have another six months to reduce the amount of trans fat in food items as the government plans to ban high trans-fat food from January 2024 onwards, an official said.

“A six-month grace period has been given to existing manufacturers, sellers and distributors whose products contain trans-fat,” an official of the Ministry of Health told EconomyNext requesting anonymity.

According to a Ministry of Health gazette issued on… a person shall not sell, offer for sale, expose or keep for sale or advertise for sale, any packaged food product containing trans-fat unless the total amount of trans-fat of such food product per 100 grams or 100 milliliters of the food product is declared on the label of such packaged food product.

However, these regulations will not be applicable for export oriented food products.

Trans-fat is a type of fat that has certain chemical properties and is usually found in processed foods such as baked goods, snack foods, fried foods, shortening, margarine, and certain vegetable oils.

Eating trans-fat increases blood cholesterol levels and the risk of heart disease.

Meanwhile, the World Health Organization (WHO) has praised Sri Lanka for enacting a legislation on trans-fat to protect health and prevent premature deaths from coronary heart disease, a statement from the WHO said.

“Eliminating trans-fats from food supplies is a cost-effective measure with enormous health benefits,” the statement quoting Poonam Khetrapal Singh, Regional Director, WHO South-East Asia said.

“By enacting legislation on trans-fat, Sri Lanka has once again demonstrated its resolve to protect and promote the health of its people”.

The regulations are coming into effect as Sri Lanka is struggling with food insecurity as the country recovers from its worst economic crisis.

However, an improvement in food security across all provinces has been recorded, according to an assessment by a Crop and Food Security Assessment Mission (CFSAM) of two UN agencies. (Colombo/ May 30/2023)

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India extends under utilized $1 bln credit facility to Sri Lanka by one year 

ECONOMYNEXT – India has extended a $1 billion credit facility to Sri Lanka by another year after the loan that was given to help the crisis-hit island nation to continue import of essentials was not fully utilized in the 12 month period originally agreed, officials said.

Sri Lanka faced with a looming sovereign default signed the credit facility in March 2022 for one year through March 2024. However, the full $1 billion had not been utilized yet.

The Facility has been used for urgent procurement of fuel, medicines, food items and industrial raw materials, as per the requirements and priorities of Sri Lanka.

“The initial agreement was signed in 2022 March and out of the 1000 million US dollars allocated materials were imported for $576.75 mil,” Shehan Semasinghe, State Finance Minister said in his official twitter platform.

“The agreement is extended for the remaining $423.25 mil. We will prioritize the import of essential medicines till March 2024.”

Indian High Commission in Colombo said the State Bank of India (SBI) has extended the tenure of the $1 billion Credit Facility provided to Sri Lanka in response to a request from the Government of Sri Lanka.  (Colombo/May 30/2023)

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Sri Lanka President cleared to discuss cancelled LRT after soured Japan relations

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers approved a proposal by President Ranil Wickremesinghe discuss resuming a Japan funded. Light Rail Transit (LRT) project cabinet spokesman said, as the island nation is in the process of mending ties with Tokyo.

However, any such deals are likely to take place after the debt restructuring and Sri Lanka starts to repay its foreign loans to come out of default, analysts say.

Former President Gotabaya Rajapaksa unilaterally cancelled the 1.5 billion US dollar LRT and East Container Terminal (ECT) projects in 2021. Japan agreed to fund the LRT project while it was one of the tripartite members of the ECT project along with India and Sri Lanka.

The abrupt cancellation hit the diplomatic ties between the two countries and Sri Lankan government officials have said Japan had given the project to Sri Lanka at a very lower financing cost.

President Wickremesinghe returned from Japan late last week after having met top officials of the Japanese government including its prime minister.

“In recent history, due to the stopping of several agreements and proposals suddenly, President Wickremesinghe went to Japan after creating the background to clear some of the worries we have,” Cabinet Spokesman Bandula Gunawardena told the weekly media briefing.

“Before he went, he got the approval from the cabinet to resume the discussion on the light railway project. He got the approval from the cabinet to get parliament approval for bilateral agreements signed or any other investments project. Any change or cancellation of a project could be done only with the approval of the parliament.”

Japan has backed Sri Lanka under Wickremesinghe’s presidency after the island nation declared sovereign debt default. (Colombo/May 30/2023)

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