17th February 2002, Volume 8, Issue 31















Suntel and E-Channelling in pioneering e-commerce project

eChannelling is a pioneering e-commerce project in Sri Lanka, whereby patients can book appointments with doctors at hospitals in Colombo either through the internet or by visiting any of Sampath Bank's branches island-wide. This easy to use, web based service seeks to fulfil a long felt need of people by eliminating the time wasted by standing in queues, parking and making trips to the hospital.

E-Channelling Limited is Sri Lanka's first large-scale e-commerce company, a Rs. 70 million joint venture between Millennium Information Technologies and Ayojana Fund (Pvt) Ltd., established to take the channelling of specialist doctors in Sri Lanka to the electronic age.  Currently the project connects Nawaloka, Durdans, Asiri, and Oasis hospitals in Colombo. Plans are afoot to connect a total of 10 hospitals in the near future. Suntel has connected all these hospitals with eChannelling server on dedicated connections. The solutions have built in redundancy with automatic ISDN dial back up. Once again, Suntel has demonstrated its ability to deliver a customer specific solution to telecommunication challenges, together with the promise of international quality and speed of delivery.

Suntel wOw is the ISP provider for the project, enabling the customer to channel the doctors through the internet. Suntel is also E-Channelling's official internet service provider, offering dedicated internet connectivity and related services.

 JKH profit declines

The net profit of John Keells Holdings (JKH) is expected to decline by 40-45% for the financial year ending March 31, 2002, according to analysts.

The recently - released provisional financial statements of JKH for the nine months ended December 31, 2001 showed a 47% drop to Rs. 239.8 million from the Rs. 450.1 million made in the same period of the previous year.

Research Analyst, CT Smith Stockbrokers Shanika Wimalabandu said this performance was anticipated, and expects a similar decline in the Aitken Spence statements to be released shortly.

She pointed out that JKH was badly affected by the overall economic decline, the terrorist attacks in Katunayake and New York which affected their leisure business, and the drought which hit plantations.

Shanika said John Keells' IT business will be able to break-even, but the transport sector will witness a slightly negative growth.

She however felt the group's performance will see a definite improvement during the next financial year ending March 2003.

JKH Chairman Vivendra Lintotawela, stated that despite adverse conditions, group turnover during the nine months period ending Dec.31, 2001, has increased marginally from Rs. 8.6 billion to Rs. 8.8 billion. He said that they have seen an increase of just 5% in total operating costs over the previous year, while having to meet with inflationary pressures and other cost increases.

"The decline in profit from operating activities was thereby contained at Rs. 220.7 million, a drop of 27% from the same period in the previous year," he added.

According to Lintotawela, the economy contracted by 3.7% in the third quarter and 0.7% in the first nine months, effectively wiping out the growth of 0.9% registered in the first half of the calendar year.

He said that while financial expenses have increased by 44% during the 9 month period ending December 31, a sum of Rs.93 million has been charged against profits against the total payment made on the voluntary resignation scheme implemented by Ceylon Cold Stores.

He added that the 20% surcharge on corporate tax has contributed to the increase of approximately 16% in the effective rate of tax for the nine month period.

The total assets of JKH has also witnessed a decline, from Rs. 18.9 billion in 2000 to Rs. 16.4 billion in 2001. The net assets per share also dropped from Rs. 43.67 to Rs. 35.37.

The turnover of the company reflects a reduction of 6% to Rs. 645.1 million from Rs. 684.2 million last year. Finance costs rose by 86% from Rs. 67.3 million to Rs. 125.3 million in the current year, primarily due to the higher interest rates in the first half of this financial year and the third tranche of the investment in SAGT being made during this quarter.

Post-tax profit dropped by 34% from Rs. 412.5 million to Rs. 271.5 million.

Lintotawela stated that in spite of the economic downturn, Elephant House soft drinks and ice creams continued to enhance their market leadership position and registered satisfactory increases in turnover. He said they are however concerned about possible adverse effects, if the current power cuts are further extended.

He added, "while we continue to pursue our plans to expand our operations in the leisure sector into South India and in the Maldives, to reduce our reliance on the volatile domestic market, the Sri Lankan market continues to be depressed."

Lintotawela also said that in the plantation sector, sector profitability has shown a slight improvement in the third quarter and they are confident that this will continue.

He stated that companies in the transportation sector continue to exceed expectations. "However, the downturn in trade and the uncertainty surrounding both the aviation and shipping industries have resulted in slowing down sector growth rates," he added.

He further stated that with the commissioning of the new cranes, phase one of the SAGT development will be fully operational in February. This would enhance sector profits in the fourth quarter.

The IT sector is gradually seeing the results of its marketing efforts over the past year, and will show a positive contribution in the last quarter of the current financial year.

Lintotawela said the financial services sector has shown a significant improvement in the third quarter as a result of improved activity in the stock market and lower interest rates. "The strategy to maximise the synergies of the different companies in the sector continues and we hope to complete the process by the end of the financial year. The company has made provision in its financial statements for losses that may be made in this regard," he said.

Head of Leo Burnett India visits Sri Lanka

The Managing Director of Leo Burnett - India, Arvind Sharma was recently in Sri Lanka to review the advertising standards in the country. Sharma is also a member of the directorate of Leo Burnett Solutions Inc., which is the Sri Lankan representative organisation of Leo Burnett Worldwide.

"Sri Lankan advertising standards have grown at an extremely fast pace during the past couple of years", said Sharma. "Advertising messages are more focused and to the point" he further added, expressing strongly that he was over-whelmed by the performance of Leo Burnett Solutions in Sri Lanka due to the outstanding achievements in its short history of two and a half years.

"Sri Lanka has a good collection of strong advertising players in the market today", Sharma said. "It is essential that we have strong players as then the industry itself can grow as a whole. This is why the Sri Lankan advertising industry has performed and developed exceedingly well."

Arvind Sharma is an MBA from the Indian Institute of Management, Ahmedabad, who spent his first couple of years in marketing at Voltas. He joined advertising in 1979 at Clarion McCann. In 1993 he joined Chaitra Advertising in India and rose rapidly in the agency.

In 1992, Leo Burnett's equity participation in Chaitra was accompanied by his appointment as deputy managing director. In August 1995, Sharma took over as managing director of Chaitra Leo Burnett with additional responsibilities of looking after Burnett's interests in Bangladesh, Sri Lanka and Nepal. He helped establish affiliates for Burnett in Bangladesh - Bitopi Advertising and Sri Lanka - Leo Burnett Solutions Inc., the agency's second network in India in association with Dentsu - Orchard Advertising, and the agency's media arm Starcom. In 2000, the agency changed its name to Leo Burnett India.

Under Arvind's leadership the Indian agency transformed itself rapidly, acquiring talent of industry stature and adding global accounts such as Coca-Cola, Fiat, Heinz, Kellogg, Pillsbury, Hallmark and Toyota and prestigious local accounts such as Bajaj, Dabur, Godrej.

Today talent form Leo Burnett India is in key roles in developed markets in the Leo Burnett network from Chicago to Singapore. Leo Burnett India's creative product has received global acclaim across all the major international advertising award festivals. Leo Burnett is one of two agencies to have a Cannes lion, and the agency has acquired a reputation for turning around brands - Bajaj motorcycles, Thums, and Coca-Coca being some of the best-known examples..

Port of Colombo attracts new Maersk line service

Maersk - Sealand, the world's largest container carrier will be inducting an additional weekly service with vessels with a capacity of 4200 TEUs through the port of Colombo commencing 2nd week of February 2002. The proposed service is the West bound service of the Far East Middle East service.

Maersk - Sealand, though having shifted its transshipment base from Colombo to Salalah has in the recent past shown renewed interest in moving its transshipment traffic through the Port of Colombo. Induction of this new service is seen as a reflection of Maersk Sealand's confidence in the productivity enhancement measures adopted by the Jaye Container terminal, the flagship container terminal of the Port of Colombo.

The Jaye Container Terminal, the largest container terminal in South Asia has over the recent weeks increased its vessel productivity by approximately 70-80%. Combined with the competitive advantage the Port of Colombo has been able to display in the recent past, the decision by Maersk Sealand to induct a new service through the Port of Colombo is seen as a reflection of the tremendous potential the Port of Colombo has over its regional competitors.

Public sector effectiveness

 By Dinesh Weerakkody

The government's decision to get an opposition MP to head the Committee on Public Enterprise better known as COPE is a good thing. In fact COPE during the last parliament expressed considerable concern about the inefficiency of the public sector and discussed measures to ensure their effectiveness, both as sound business concerns and as instruments of development policy.

While they say performance improvement could be stimulated through professionalism of the internal management, the interference of politicians in tender procedures relating to procurement was cited by the former COPE Chairman, John Amaratunga as the main cause for last year's financial crisis in the CEB and the Petroleum Corporation. According to reliable sources year 2000/2001 is expected to be worse - its debts are currently over Rs. 40 billion.


In fact, the government and the minister in charge of an enterprises have an obligation to supervise, monitor and evaluate the performance of an enterprise in order to ensure that the goals for which it was set up are achieved, and also intervene when necessary to ensure that the institutions falling under his/her ministry are positive contributors towards national development.


Considering the fact that COPE in the past expressed considerable concern about the mismanagement and corruption in many of the public enterprises and also the need to increase the effectiveness of these enterprises, both as sound business concerns and also as a vehicle for promoting economic and social development, the newly appointed members of COPE should take steps to promote the '3Es' or 'value for money' within the public sector.

The term 'value for money' has been used time and again in relation to the public sector, where concern has been expressed officially about the cost, efficiency and effectiveness of entities in the public sector. The term value for money is used to convey three aspects of performance measurement; i.e. economy, efficiency and effectiveness.

In the public sector, value for money implies the availability of a service which is economical, efficient, and effective. These three ingredients could be defined in simple terms in the following manner:

a. Economical - a cheap process or doing things cheap

b. Efficient - a job well done

c. Efficient - objective achieved

To elaborate a little more on the three ingredients referred to above, one may say that 'economy' in relation to the subject under discussion is the acquisition of resources, raw materials needed by the entity in appropriate quantities, without wastage, in keeping with required standards as far as quality is concerned, and at the most compatible rate.

'Efficiency' is determined by the final result in comparing the quantity of the end product or service with the value of the resources fed into the process. The objective to be achieved ideally is to increase productivity and lower unit cost. 'Effectiveness' is measured by the degree to which an activity has achieved its stated objectives and goals.

In this era of private ownership, we can see from utterances of some important public figures, the public sector is being placed under considerable pressure to demonstrate that they need to exist. They have to show that they are giving the public value for their money. Consultants and other advisors have constantly advocated good management practices such as the formulation of action plans to focus on achieving value for money.

Obviously, the purpose of this exercise is not to reduce the number of jobs in the public sector, which would be disastrous from a socio-economic point of view. It also does not mean that expenditure in the public sector should be curtailed. What it does mean is that the public sector should be mindful of how much it contributes towards the national coffers by way of services, in relation to the enormous sums swallowed up by the institutions within it.

Cost effective

We understand that widespread concern about the negative approach towards "cost effectiveness" on the part of certain institutions in the public sector has led to some interest being shown in conducting value for money audits. This is a useful tool in achieving the avowed objective of the government, which is to make public enterprises viable or else to sell them to the private sector, or even liquidate them where possible.

However, this would only be a first step and there should be a willingness on the part of such institutions and the minister to take meaningful steps to take corrective measures based on the results of such audits.

Corrective measures

The taking of corrective measures does not stop at putting down recommendations. It should be followed up by training programmes for senior management, line managers and also workers, who are all in need of adequate motivation to achieve value for money.

Another important matter to be kept in view is that there can be no universal formula for success. What may be the perfect strategy for institution "A" may not be desirable for institution "B". One must always pay heed to the human factor, i.e. the needs and the aspirations of the workers and public, the environmental factor i.e. the location of the establishment and the effect on the public etc., and the cultural factor i.e. the types of persons affected by the utilities's products and services.

Finally, if the value for money concept is to take root in the public sector, a distinction should be made between the exercise of political power as reflected in the making of national policies and the exercise of politicking power, which is interference in the day to day management aimed at short-term political gain.

Viscotex invests Rs. 144 mn in expansion project

Italian investor Viscotex S.R.I. of Italy with its local counterparts have gone into aggressive expansion of their Sri Lankan operation to manufacture garments and socks for the EU market, investing Rs. 144 mn. in the process.

Texlan (Lanka) Ltd., was incorporated in 1980 for the manufacture of hosiery viz. tights (for ladies and children) and socks (for men, ladies and children) for the European market.

Due to the high demand for the company's products in the European market, it has decided to set up a factory to cater to this demand using state-of-the-art computerised knitting machines. This second factory was built on a land extent of 1.5 acres in Minuwangoda Industrial Estate, with a total investment of US$ 5 million.

This has resulted in new employment opportunities for initially 200 workers, which will be increased to 300 by the end of this year. The total number of employees of the two factories currently stands at 530.

The company's total production is exported to Europe and marketed through a distribution network in Germany, which is also owned by the same investors. The main shareholders of the company are from Italy.

The investors also have two more investments in Sri Lanka, namely Filotex Lanka (Pvt.) Ltd, the only acrylic yarn spinning factory in Sri Lanka, situated in the EPZ Katunayaka and the Tamarind Tree Hotel, which is a unique concept tourist hotel situated at Andiambalama, Minuwangoda.

Institute of Management launches The Management Club

The Management Club (TMC) was launched last week at the Galle Face Hotel under the auspices of the Institute of Management UK - Sri Lanka branch.

The executive committee of the Institute of Management UK - Sri Lanka Branch conceived the concept of TMC almost two years ago. It is the first of its kind in Sri Lanka. The objective in forming the club was to bring together managers and provide them with the amenities of an exclusive club, where they could meet, interact and network with their peers and exchange thoughts, views and ideas.

The Galle Face Hotel (GFH) management has been supportive of this venture and it is anticipated that TMC will become part and parcel of the planned expansion and refurbishment of the hotel. It is appropriate that the club be situated at GFH, which has a long history, a distinct image and an imitable atmosphere. The location of TMC alongside the Sea Spray Restaurant would give it a special ambience.

TMC will consist of a boardroom for members' meetings and a tastefully decorated lounge, both of which are air conditioned. Dining facilities will be available in the restaurant and on the terrace, overlooking the sea front. TMC would be opened from 7.30 onwards in morning to enable members to meet or conduct their business meetings over tea or breakfast.

Privileges that TMC members would be entitled to would include special discounts on food and beverages, hotel rooms, swimming pool, billiards, etc. If a larger area is required for a function, members could reserve the restaurant area. This would provide the infrastructure for members to interact and entertain at a corporate level.

The principal corporate sponsors of TMC are Lion Brewery, Ceylon Tobacco, Pepsi and International Distilleries. The cosponsors are Singer Sri Lanka, A.T. Cooray, Delmege Forsythe and Sign-Tech Advertising.

TMC will be managed by its own executive committee who will be members of IM-UK. Membership to TMC will be by invitation only. All members of the IM-UK are entitled to be ordinary or life members. Those who are not members of IM-UK could be associate members and become ordinary or life members if and when they obtain membership of IM-UK.

Associate membership of the TMC would be limited to those meeting one or more of the following criteria:

a. Membership in a UK professional institute

b. Membership in a Sri Lankan professional institute

c. Degree holders

d. Recognised management diploma holders

e. Minimum of five years senior management experience in a recognised organisation.

The mission of IM-UK is to promote "the art and science of management." Representing over 90,000 members worldwide, IM-UK is the leading professional body for managers, whose members come from all sectors - public and private - at all levels of responsibility, from supervisor to chief executive. The institute is also the leading body for management qualifications in the UK, with over 200 centres conducting development programmes that lead to a wide range of certificates, diplomas and NVQ/SVQs in management.

The Sri Lanka Branch, which is the only branch outside the U.K., is planning to work towards developing similar management courses and qualifications geared for the country's needs. This activity has been delayed by the fact that IM-UK is currently in the process of obtaining charter status in the UK, along with which, the statutory members (Members (MIMgt), Fellows (FIMgt) and Companions (CIMgt)) would become chartered managers.

Higher levels of qualifications for chartered membership of IM-UK, as well as the change in syllabuses for such qualifications are currently in the process of being evolved and evaluated.

Danish business delegation to visit Sri Lanka

A business delegation led by Micheal Sternberg, ambassador of Denmark to India and Sri Lanka, will visit Sri Lanka from March 10 - 12.

The companies participating in this delegation include APV Thailand, AVK Overseas (Asia), Burmeister & Wain Scandinavian Contractor A/S, Cowi A/S, Danfoss Industries Pvt. Ltd., Danisco Ingredients India Pvt. Ltd., DHI Water & Environment, Dong A/S, d line India Pvt. Ltd., ECO-Chem Waste Control (I) Pvt. Ltd., Emborg Foods Middle East, Fowler Westrup (India) Ltd, Fuller India Ltd., Grundfos Pumps India Pvt. Ltd, Intertec A/S, Kampsax India (P) Ltd., L.M. Glasfiber (I) Ltd., L&T Niro Ltd, Maersk Lanka (Pvt). Ltd., Navision Software India Pvt. Ltd., NEG-Micon A/S, Novo Nordisk India Pvt. Ltd., and Vestas RRB India Ltd.

The companies span dairy and food processing machinery, industrial fittings for water and gas, diesel engine power plants, food ingredients, consultancy in water, sanitation and environment, production and supply of energy and associated services, pollution monitoring and control, seed processing machinery, cement plant machinery, pumps, electric and mechanical installations, digital mapping and geographical information system services, systems and packages related to concentration and drying for chemicals, fertilizers and other chemicals, wind energy systems and generators, consumer goods, and healthcare sectors.

The delegation intends to meet with targeted local companies on a one-to-one basis on  March 11-12.

Two seminars will also be organised on March 11 on the energy and water sectors, respectively. The seminar 'Danish Know-how and Technology for the Water Sector' will be presented by the Danish Hydraulic Institute, COWI, Grundfos and AVK Overseas, while the seminar entitled 'Danish Know-how and Technology for the Energy Sector' will be led by B&W Scandinavian Contractor A/S, NEG Micon and Vestas.

The local coordinating bodies for this delegation are the European Business Information Centre (EBIC) and the European Chamber of Commerce of Sri Lanka (ECCSL).

Those companies who would like to have further details regarding the individual companies in the delegation can contact the EBIC/ECCSL for further details and participation.

National strategy to achieve cleaner production needed

The Clean Industry Development Project sponsored by the Ministry of Enterprise Development, Industrial Policy and Investment Promotion and funded by the Asian Development Bank, is undertaking with the collaboration of a wide range of stakeholders, to develop strategy, action plans and public policies needed by Sri Lanka to achieve cleaner production and increased production efficiency, international competitiveness and sustainable development that Cleaner Production (CP) makes possible.

Developing the strategy and action plan is based on extensive research, especially on the advice of representatives from many private sector firms and organisations as to the combination of understanding, policies, incentives, rewards, pressures and other conditions that will change the perspective of the businessperson to believe that CP is in the best business interest of the firm.

Developing a workable strategy and action plan requires the collaboration of many sectors of government, business and community. Representatives of different perspectives and interests must come together to discover their common interests in achieving CP and how the nation as a whole and the agenda of each stakeholder can benefit from national progress towards CP.

They must then examine how each can contribute to a combined and integrated plan to achieve CP nationally, and work to integrate principles of CP into policy and programmes at all levels and in all sectors of activity. It is a long process, but the future cost to the nation of continuing in existing patterns of increasing industrial pollution and depletion of natural resources, accelerated by economic growth, is unacceptable. This is a truly national issue, cutting across all dimensions of governmental responsibility for the future welfare of the nation and its people.

Cleaner production is a broad concept that is achieved by reducing both the consumption of natural resources per unit of production and the amount of waste and consequent impact on the environment and human health per unit of production. It is therefore measured in increased efficiency and productivity of the production process.

Unlike pollution control, cleaner production cannot be taught as a technique, but requires a shift in perspective of the business decision-maker with regard to the factors considered in business decisions. Fortunately, it is also dissimilar to pollution control, in that pursuing it does not simply add to the cost of production, but serves to reduce production costs and makes the firm more productive and competitive.

Cleaner production is a condition in which pollutants produced and natural resources consumed for each unit of product or service are reduced so that growth is economically, environmentally and socially sustainable.

A widely used definition of CP, given by the United Nations Environment Programme is:

"Cleaner production is the continuous application of an integrated preventive environmental strategy applied to processes, products, and services to increase overall efficiency and reduce risks to humans and the environment. This involves:

 Production processes: conserving raw materials and energy, eliminating toxic raw materials and reducing the quantity and toxicity of all emissions and wastes;

 Products: reducing negative impacts along the lifecycle of a product, from raw material extraction to its ultimate disposal; and

 Services: incorporating environmental concerns into designing and delivering services."

This is a broad definition that addresses not only the reduction of the quantity and toxicity of pollution from production, but also the reduction of the consumption of natural resources by those processes. In this perspective, the principles and practices by which CP will be achieved include many related concepts, such as pollution prevention, waste minimisation, environmental management, design-for-the-environment, life-cycle analysis, green accounting, and others.

CP also involves many sectors of activity and the cooperation of all these sectors is needed to achieve CP on a national scale. The principles of CP originated in manufacturing, but they are equally applicable to transportation, mining, health services, agriculture, tourism and many other sectors. All levels of government provide facilities and services to their citizens, consuming resources and impacting the environment.

Education, financial and professional organisations all influence the behaviour of business and can significantly contribute to achieving CP. Community and other volunteer organisations are made up of citizens who are impacted by the actions of business, which can contribute constructively to motivate change towards greater efficiency. Trade and investment may be strongly affected by CP in industry. All of these are stakeholders in a process of achieving national CP, and each in its own way can contribute to and benefit from a national programme to achieve CP.

CP is not simply a response to environmental concerns. It concerns questions of economic competitiveness and national sustainable growth.  At the core of the meaning of CP is efficiency; less use of raw materials and less waste per unit of production inherently mean increased production efficiency. This in turn yields higher profitability and greater competitiveness. As world markets become more open and competitive, achieving CP can make a critical difference in the ability of a nation's products and services to compete both in the global market and at home.

All developing regions of the globe are striving for rapid future industrialisation. The adoption of principles and practices to achieve cleaner production can both make industrial growth more competitive and avoid the environmental impacts and the depletion of natural resources that have been incurred by the more industrialised nations from similar growth.

Unfortunately, the intensity of natural resources consumed and of pollutants discharged is not yet falling as fast as production is rising. The result will be continuing rapid depletion of natural resources and degradation of the environment, and increasing risk to human health. Under those conditions the faster economic growth occurs, the worse the problem will become. Many areas face an environmental disaster from what may seem like economic success, but is an inherently unsustainable condition.

Changing this pattern requires a coherent national strategy that encompasses not only industry but all sectors, public and private, whose activities have an impact on the environment or consume natural resources, or which can help to influence the behaviour of those who directly impact the environment. It requires commitment from government at the highest levels and concern for CP in public policy at all levels and in all sectors.

Finally, it requires careful planning of action to change the behaviour of enterprises and organisations, voluntarily, towards greater production efficiency. These actions must be carefully selected on the basis of national strategy, achieve synergy through collaboration among sectors, and be supported by public policy and strong leadership.

Three nights free acomodation offer from Malayasia Airlines

Malaysia Airlines is offering free accommodation for three nights for Sri Lankan travellers to discover and experience the wonders of Malaysia. This is a unique offer called the "Showcase Malaysia" package. This offer entitles you to a free stay in Malaysia for 4 days/3 nights with breakfast, and you can choose from over 80 hotels and resorts around the country, which is valid till March 31.

This offer is open to returning passengers travelling from Sri Lanka on Malaysia Airlines, who would like to use this opportunity to take a break, go shopping or even look for business opportunities. Once you step into Malaysia you well feel the irresistible glamour of the golden beaches, scenery and exiting adventures. You can spend all day browsing through the exquisite shopping malls or enjoying a wide variety of activities of Malaysia's diversified cultures.

"Showcase Malaysia" is targeted at passengers flying on return tickets on Malaysia Airlines from Colombo to Europe, Australia, USA, Japan, Korea, Taiwan and China.

Malaysia Airlines which is code-sharing with Srilankan Airlines now operates four flights weekly to Kuala Lumpur every morning on Tuesday, Friday, Saturday and Sunday with convenient connections to all major cities worldwide. Hemas Air Services (Pvt) Ltd., is the general sales agent for Malaysia Airlines in Colombo.

Joint venture IT training company launched

IDL Spectrum, an Indo-Sri Lanka BOI approved joint venture IT training company was launched recently at the Colombo Hilton, in the presence of  Minister for Tertiary Education and Training, Kabir Hashim, representatives of the BOI, and media.

Spectrum Training Centre (Pvt) Ltd., which is doing business as IDL Spectrum, is focussed on becoming the largest human resource development centre in Sri Lanka, concentrating on a combination of IT, coupled with training in the English language. IDL Spectrum which plans to invest US $ 300,000 in IT training, aims to go nationwide within a period of 24 months.

The company has a vision of becoming the largest HRD company in Sri Lanka by opening up training centres in multiple locations around the country.

Where hardware is concerned, IDL Spectrum's set up will consist of Compaq systems with Pentium 4 Servers and Pentium 3 clients, while on the technology front they will incorporate Bluetooth R&D kits for real time Bluetooth training, which will be imported from Sweden, along with an array of other software tools for Bioinformatics, Bluetooth, Web Technologies including .Net Framework, Visual Studio, .Net,Nokia WAP Toolkit for WAP (Wireless Application Protocol), and LINUX suite.

Is terrorism the biggest threat for the development of tourism in Sri Lanka?

By Anura Lokuhetti

The general perception is that the problem in the north of Sri Lanka is the reason for the decrease in tourists visiting our country. However, if one would go through research carried out by the Ceylon Tourist Board, one would realise that the larger threat is the harassment experienced by tourists.

My personal experience in the industry also substantiates the research. This problem has reached huge proportions in recent years as the harassers receive support from other interested parties who undermine the authority of the hotels in tourist destinations. The local police are not free to enforce law and order due to various pressures from interested parties.

A recent study conducted by the Ceylon Tourist Board proves that more than 30% of guests have faced problems due to harassment experienced during their stay in Sri Lanka, commencing from the time of their arrival until their departure. Further analysis reveals that what is considered "harassment" by tourists is in reality the poor selling skills of the local people residing in the area, who are making a living out of peddling their wares to tourists.

A global study of the issue also tells us that in developing countries experiencing high unemployment rates of unskilled labour, the unemployed resort to other means to earn a living. Research and the media provide information about countries such as Kenya, the Caribbean Islands, South American resorts, where tourists complain about harassment by beach boys and touts.

These complaints are legitimate and we need to deal with it. Today, we have to contend with other factors. The main problem faced in Sri Lanka affecting tourism is not the Katunayake International Airport attack, but the initiative taken by America to eradicate terrorism in the world. The impact of this decision has created another situation, which dissuades most of our tourist visitors from airline travel. Therefore, tourist destinations are now places where one can travel by other means than air i.e. by road, train and cars.

The purpose of drawing attention to research conducted by the Ceylon Tourist Board from July-November 2001 is to consider what positive measures we need to implement in order to lure more repeat clients to Sri Lanka. Repeat clients are our bread and butter and if we have to maintain our status in the industry, we need to take action now before it is too late.

To share some of the research data from the study, as much as 65% of the guests have been approached by various interested parties in selling some kind of service to tourists on the beach and 45% of guests have been approached by touts offering various services on round trips and to other places, etc.

This strongly indicates that harassment is the major threat, apart from terrorism in the northern part of Sri Lanka that impedes the development of tourism in Sri Lanka.

However, we compete with the Maldive Islands, who ensure that they offer peace and tranquility to its visitors.

If "harassment" were to be considered a major threat for the development of tourism in Sri Lanka, preventive measures need to be taken as early as possible to overcome this problem.

Why do clients go to the Maldives? They go there so that they can have a relaxing holiday without any kind of harassment. A holiday means recreation - a time to relax, there must be 'peace of mind' for the body to completely unwind and relax. When holiday makers book their holidays, their main criteria is to have a peaceful and tranquil holiday, no matter the distance. Harassment of any form, in any destination of the world would be a definite "no" on their list.

In developed countries like Canada, there is a law enforced against harassment and therefore, this problem is not significant. However, in developing countries where there is so much unemployment, this problem is evident. It is extremely important to safeguard the interests of the tourists in any destination of the world in order to create a trouble free peaceful holiday.

Solutions to alleviate

the problem in the short term

1. Creating community awareness about the hazards of harassment to the tourist industry

The menace of harassment in resort destinations is proving to be a deterrent in tourists selecting a location for their vacations. This harassment comes mainly from local vendors who make a living from selling low cost souvenirs, handicrafts and various other services.

To overcome this menace, it is suggested that the authorities directly linked to tourism, e.g. The Tourist Board, travel trade associations etc., should embark on a programme that educates the community at large on the importance of the industry as a major income earner that contributes to the economy of the country.

To implement such an awareness prog-ramme, a special committee should be appointed in-collaboration with the Ministry of Tourism, Tourist Board or any other national body that is involved in the development of tourism such as the Tourist Hoteliers Association, hotel schools, and with the assistance of media channels. The committee should be empowered to:

1. Commence immediately a communication strategy that focuses on the benefits of tourism to the country as a whole and the community at large.

2. Conduct meetings in regional areas to educate all religious leaders in churches, mosques and temples etc., on the problems faced by tourism due to the harassment of tourists by touts. Using the clergy in educating the masses is recommended because the people living in rural areas tend to heed their word strongly.

3. These communications should erase the perception that foreign tourists are affluent with no limits to their spending power.

2. Community participation in the tourism industry

The inhabitants of tourist resort areas will require social education focused on enhancing their skills, so that they can actively participate in the tourism industry and gain meaningful employment. This would involve:

A. Setting up tourism training schools:

School leavers from tourist destination areas could gain admission to these schools where they would receive specialised training to find gainful employment in hotels in their own areas. This would then not require them to resort to other avenues of income such as selling goods and services in tourist destinations and other places that are frequented by tourists. Creating such an opportunity would result in the inhabitants having a positive image of tourism and would treat tourists with more tact and courtesy, understanding that their repeat visits greatly add to the economic contribution of their livelihood.

B. Enhance communication skills to cater to tourist needs:

Another area of concern is the lack of communication skills. If the vendors in tourist areas were to communicate in foreign languages, they would communicate more effectively with tourists as they would understand each other. This education system will definitely reduce to a great extent the communication barrier and harassment of tourists by the local community that normally only speak in their mother tongue.

Another important factor is that most people in rural areas do not speak in English and find it difficult to find employment in tourist resorts etc., and other tourist related environments, and as such, are directed to various other businesses. They tend to rely on the foreign guest to peddle their goods and services, resulting in tourists losing their peace and tranquility while on a much needed vacation. Therefore, this problem has to be taken seriously and consideration should be given to the feasibility of setting up hotel schools in these areas, so that more people find meaningful employment within the industry.

C. Deliver marketing techniques and skills training programmes:

Marketing techniques and skills are essential to the success of such an initiative. Due to their lack of know-how, vendors pursue tourists aggressively which is interpreted as harassment. If they were more focused on marketing their goods in an appropriate manner, their behaviour would be less aggressive and therefore would not come across as a form of harassment.

3. Creating a market place for vendors (fair concept) :

A 'fair' concept would provide a legitimate location for vendors to display their goods and services for sale. The fair would be advertised as the location for tourists to visit if they desire to purchase goods and services that are of interest to them. This would prevent vendors and touts from lurking on the beach and other tourist attractions to harass tourists in to making a purchase.

This is where government intervention is required for the local government to create a 'fair' concept, where stalls are leased to local vendors to display their goods. This intervention would assist in eradicating the necessity of selling goods to tourists at the tourist sites. Law and order should be enforced at these sites. The vendors at the fair should be registered and issued identity cards through an authorised body. Tourists can therefore identify legitimate vendors and would help to streamline any complaints or forms of harassment.

4. Creating of cultural centres with community participation:

Most tourists if given the opportunity would like to learn more about the countries that they visit and therefore would enjoy mingling with the local community to learn about culture, lifestyles, living conditions, food, and dance. Well-organised cultural shows in a community centre would satisfy this need.

5. Central government to ensure no interference:

This is a common problem in most of the developing countries where people with different interests hamper the enforcement of law and order for their own benefit, which leads to deterioration of law and order.

Therefore the government should intervene and endorse and support these initiatives for the development of tourism.

Long term initiatives

1. Tourism to be included as a subject in school curriculum

Tourism should be introduced as a subject in the school curriculum so that the future generation will realise the importance of tourism to the country. The youth will be aware of what is required and how the country can derive the benefits from tourism. The adoption of this subject in the long run will create an environment that will appreciate tourists and cease to harass them.

2. Creation of tourism related businesses

The government should be involved in identifying areas of business that are directly related to the tourist industry. A special fund could be dedicated for this purpose and studies and proposals put forward so that community initiatives become reality. Most of the time the vendors are small time entrepreneurs who eke out a living by selling small wares and services that are of no interest to the local community. If their needs were addressed through proper channels and given due recognition, the vendors and touts who harass tourists during their stay would be eliminated. If more individuals were involved in providing goods and services to tourists, more individuals would be gainfully employed and the need for harassing tourists in order to earn an income would be minimised and in time made extinct.

3. Funds for community development in tourist areas

A percentage of the direct income from the tourist industry should be allocated for the benefit of the community. These funds should be used exclusively for the purpose of building schools, hospitals and other infrastructure initiatives that make a direct contribution to the standard of living of the neighbourhoods. These visible contributions to the community will decrease the negative behaviour from the locals who will see the positive effects of tourism. Eventually, the long term impact will reduce the need for aggressive marketing strategies as repeat visits will increase, and word-of-mouth advertising will increase tourist travel.

Formation of a world body to address threats to tourism

It is recommended that countries that have tourism as a thrust industry, form an international body whose objective would be to address this global issue of harassment in tourist destinations.

Is it not our responsibility to create an environment that provides peace and tranquility to our tourists?

The writer, Anura S. Lokuhetty, is director operations, Confifi Group. He has more than 20 years of resort experience in Sri Lanka and has done an indepth study in respect of this global problem of tourist harassment. 



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