BUSINESS

Sri Lanka likely to lose over
Rs. 1 bn in investments

By Ann Nicholas

Financial analysts predict that three months of uncertainty in the form of delayed investment decisions running up to the elections is likely to cost the country more than the direct cost of the elections which is at present estimated at Rs. 1 billion.

No potential investor will be willing to contend with the level of uncertainty prevailing in the country at present. Speaking to The Sunday Leader, President, Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), Nihal Abeysekera said, "Our economy relies on foreign investment and donor funds. If we send out the wrong signals, investor confidence will be directly hit."

He said that investors are looking for a stable government that adopts clear and open economic policies and it is the tourism industry that is most likely to be affected directly due to the recent events, adding that while the effect would not be felt immediately, there would be cancellations that would in turn create a spiraling affect.

Abeysekera opined that elections should have been the last resort. "We expected the President and Prime Minister to come to a consensus. We strongly feel the government should formulate and adopt national policies especially fields such as education and health, instead of changing policies every time a new government is elected, an exercise carried out at a terrible cost to the country," he said.

He further said that the country has to achieve a growth rate of at least 8 to 10% and in the event we do not achieve a double digit growth rate, it would be difficult to solve the problems faced by the country, such as unemployment.

In the event the PA-JVP alliance comes into power, analysts feel that investors would take a negative view towards parties with radical leftwing leaning, whether the policy statement of the PA and JVP is pro market or not. However they added that this could be analysed further only once the manifesto is released.

Despite the predicted drop in trading following the dissolution of parliament, the Colombo stock market picked up towards the latter part of the week. Trading closed on a positive note on Thursday with the All Share Price Index (ASPI) increasing to 1,159.30 points from 1,088.20 points. This was in contrast to the situation on Monday, when the ASPI fell by 125 points to close at 1,058, losing Rs. 31 billion in market capitalisation.

In retrospect, analysts feel the reason for this sharp drop was that when the dissolution of parliament was announced, the initial reaction of investors was negative. "The markets now have a semblance of sanity seeping in. People were not prepared for the news of dissolution on Sunday morning and reacted very negatively," Managing Director, DFCC Stockbrokers (Pvt) Ltd., Ray Abeywardena told The Sunday Leader.

However, stockbrokers remained positive on the long term trading in the stock markets. "According to the forecasts, the market will stay stable up until the elections unless something drastic takes place," he added.

The dollar exchange rate, which saw a slight appreciation against the rupee two weeks ago, shot up to 98.35 on Monday, driven by news of the impending polls. However with the intervention of the Central Bank, the dollar closed at Rs. 98.20 at the end of the day.

J-Biz dissapointed by CBK's action

The Joint Business Forum (J-Biz) in a statement issued last week placed on record its "deep disappointment" that all efforts made by J-Biz, other religious groups and leaders of civil society have failed to achieve an agreement between the two major political parties, resulting in parliament being dissolved and elections scheduled for April 2.

"The serious consequences of holding another election, two years after the last one, are well known. The cost of conducting such elections at around Rs. 1 billion, the disruption caused in the lives of the ordinary citizens of the country, the slowing down of the economy and the political violence and intimidation which normally accompanies elections in Sri Lanka are some of the negative factors of holding an election. In addition many important bills that were before parliament will be unduly delayed thus retarding the socio-economic progress of the country," the statement said. The JBiz is of the view that all steps must be taken to ensure that the general elections will be conducted in a independent, free and fair manner and called upon all political parties and affiliated groups to abide by a code of conduct. J-Biz has suggested the following code:

No political party should take any action, which will precipitate a breakdown of the ceasefire agreement; all political parties should ensure that their members do not indulge in political violence and acts of thuggery and intimidation, which will disrupt the peace and violate law and order; all political parties should ensure that the candidates nominated by them are suitably qualified, who have a clean record of conduct in the past and not tainted by charges of bribery and corruption or thuggery and intimidation; the President should give a directive to the minister overlooking the media operations, including the print, broadcasting and electronic media that the official media channels should be made available equally to all political parties; the private print, broadcasting and electronic media should also ensure that all political parties are afforded equal usage of such media; the elections commissioner should be empowered to enable him to declare a poll conducted at any polling booth/booths null and void if he has sufficient evidence of irregularities perpetrated at any booth/booths on the date of polling; the IGP should ensure that the police acts impartially before, during and after the elections and that any attempt to disrupt law and order by any individual be dealt with firmly and effectively; and polling should be monitored by independent international agencies and by local agencies which have experience, expertise and the organisational capability of doing so with the officials of the Elections Department giving them all assistance in this task.

Gloomy scenario at donor conference

The International Monetary Fund (IMF) donor conference will be held as scheduled in Washington on February 17. However, in the aftermath of the dissolution of parliament by the President and the recent removal of both the deputy and non-cabinet ministers, the situation for Sri Lanka is a bit dicey.

"With the removal of the Rehabilitation Minister, the basic mechanism that is used for the diffusing of donor funds, the Rehabilitation Ministry, has been dismantled," said Constitutional Affairs Minister, G.L. Peiris addressing the media at a cabinet briefing held last week.

The donor conference, which is considered crucial for Sri Lanka at this point of time, will be attended by representatives of donor countries. Peiris was certain that this situation would cause a negative attitude towards Sri Lanka.

Further an initial US$ 51 million fund for Moneragala and Hambantota by the World Bank was due to be approved in March this year along with an extension up to US$ 184 million which included development of the plantation areas. The approval of these funds too, however, have been put off due to the dissolution of parliament and the upcoming elections.

- A.N.

Topsy-turvy at the CSE

By Shehan Moses

Trading on the Colombo Stock Exchange (CSE) was topsy-turvy during the first few days of last week with heavy selling pressure within the market.

On Monday and Tuesday, both ASPI and MPI indices fell by a considerable amount. The ASPI closed at 1,183.00 points while the MPI closed at 2,11.94 points. On Tuesday the ASPI closed at 1,016.66 points while the MPI closed at 1,729.38 points.

The indices fell mainly due to the dissolution of parliament. Foreign purchases on Monday stood at Rs. 8.49 million and on Tuesday foreign purchases amounted to Rs. 165.6 million mainly due to foreign purchases of shares of JKH.

Trading on Wednesday, Thursday and Friday rose despite the political crisis. On Wednesday the ASPI closed at 1.059.26 points and MPI closed at 1,800.77 points - a rise in the indices compared to the previous two days. Foreign purchases amounted to Rs. 15.16 million and domestic purchases amounted to Rs. 84.99 million.

On Thursday, the ASPI closed at 1,088.10 points and the MPI closed at 1,859.75 points. Foreign purchases amounted to Rs. 25.22 million while domestic purchases amounted to Rs. 216 million. The market rose on Friday too with the ASPI closing at 1,118.47 points and the MPI closing at 1,921.32 points.

Speaking to The Sunday Leader an investment analyst of DFCC Stockbrokers said that during next week the market may marginally go up, however it would mainly depend on the political scenario.

He added that long term investors would probably sell their shares while short term investors would continue to trade within the market.

Riverina rights issue oversubscribed

Riverina Hotels Limited, part of the Confifi Group of  Hotels, announced that applications for the rights and for additional share issues were oversubscribed, Thursday.

A spokesperson for the company commented that demand for shares remains strong despite the drop in share value from the peak of Rs. 45 due to the downward trend in the Colombo bourse.

All shareholders who have still not taken their rights are eligible to send in their applications on or before February 16.

Riverina Hotel, a Tourist Board approved four star hotel, is the largest individual resort property in Sri Lanka with nearly 200 rooms. Riverina has the distinction of being the only hotel in Sri Lanka featured by all major German tour operators.

The company has also decided to embark on a major renovation and refurbishment programme commencing May 1 and the hotel will be closed for five months from May 1 to September 30.

Leaders - think country first  

By Dinesh Weerakkody 

The tax payers of this country would soon have to fork out around Rs. 1 billion to fund this latest general election. This means higher interest rates, an increase in prices and also a drop in productivity.

The fragile Sri Lankan economy can ill afford the cost of this election. In fact we all know Chandrika did not want to hand over the three ministries she took over back to the UNP at any cost and the UNF was slow to accept a compromise and as a result the people of this country are burdened with yet another election.

The common man and the middle class wage earners are already burdened with taxes and levies to maintain an expensive president who is determined to stay in power till 2006.

Where on earth do you hear of a Head of State dissolving parliament without consulting the party that holds the majority and also appointing  two ministers from her own party, just before the dissolution?

Chandrika would have been better off if she got together with Ranil and worked out a compromise. We all know this is what every citizen of this country wanted.

Working with the JVP would be very difficult given their infamous past record. She may find it very difficult to carry on with people with different ideologies. But today it seems she has helped all the minority parties to consolidate and become a force to reckon with.

The PA-JVP alliance would find it very difficult to secure a working majority in the face of a joint campaign from the minority groups. Also the JVP's effort to create confusion among the voters by playing the communal card to discredit the UNF would be futile because peace and the economy would be the most important factor at this election.

Priority

Getting Sri Lanka out of the current political and economic crisis would be the single most important priority for all our people . Now if that becomes a priority for the citizens of this country, the UNP because of its economic track record and for bringing about peace could sway the voters in their favour, because all Sri Lankans want peace. Without peace there will be no growth.

We all know the UNP on record has a team of people with diverse talents and resources and are better equipped  to manage the economy. On the other hand if the JVP can convince the urban voter that they know what they are doing they could make an impact.

What they forget is that many of the PA ministers who were voted out of office only two years ago for mismanagement and corruption are working with them this time round.

Therefore, according to analysts, if Ranil and Chandrika could only work together the country would be better off with a PA President and a UNF government.

The two major parties would in this process forced to collaborate and coexist for the betterment of this country and also be in a position to take action against carrot politicians.

Lack of trust

The UNP and the PA must realise that even after April 2, the current economic and political crisis will move from bad to worse unless the President and the UNF shed their political differences and unite behind a common vision.

However the problem is that the UNP is very unhappy with the way Chandrika dissolved parliament. They say her decision had brought economic and social ruin to this country. Above all they say she cannot be trusted.

On the other hand JVP is very confident that they are with a good chance of getting a better mandate. The final beneficiary of this election will be the JVP and the other minority parties.

The conclusion therefore is that the political crisis confronting this country can only be resolved if the two parties work together. In fact the business community has appealed many times to the national leaders and heads of political parties to get together at least for one year and work as a government of national unity and reconstruction.

The business community is today a worried lot because the uncertainty is destroying the small and medium scale industries. In addition they are also worried about the impact of the political crisis on production. The IMF decision to hold back some of the funds has already begun to affect our economy.

Therefore apart from the unstable political conditions, labour conditions and the impending power crisis, in addition the US and Indian elections will also adversely affect our export businesses in 2004. It is imperative that Chandrika and Ranil after April shed their political differences and work together to pull our country from the current political burnout.

Deliver

If the UNF is serious of forming the next government in the next few months, they should not underestimate the President's political skills. According to some political analysts, President Kumaratunga understands the complexities and the dynamics of our current political game better than any other politician in Sri Lanka.

As far as Ranil or Chandrika is concerned, unlike before, the pressure will be much more on them to deliver given the rising sentiments of the people of this country and the leaders of the private sector.

Obviously, the economic crisis facing the country the deadlock with regard to the peace process and the past performance of our military are clear indications to our politicians that they need to get their act together. To let matters drift would be disastrous for all concerned and could lead to another social crisis like in 1989.

Plea

The Colombo Stock Market which is some what of a good economic indicator of the health of the economy is at a standstill and never really recovered after November 4, 2003. Foreign investors have ditched Sri Lanka due to unstable political conditions. There are no signs of a recovery taking place in the short term now that we are caught up in a general election.

The private sector, the engine of economic growth, knowing the consequences of the JVP running a government for five years and also knowing that peace is essential for business growth has appealed to the national leaders to work together to resolve many of the burning issues facing our country and provide a stable government.

The J-Biz effort to get the two leaders to cohabit failed unfortunately. The fact that neither party got a clear majority was a clear indication that the people of this country did not want to entrust their future totally to either Chandrika's PA or Ranil's UNF, because they wanted both leaders to work together to secure a future and bring about meaningful changes that would eventually bring peace and prosperity to Sri Lanka.

Therefore, the verdict at this poll will also indicate loud and clear the necessity for polarization of all forces in the country to rebuild Sri Lanka. If Chandrika does not read this time round, she is bound to face a serve backlash from all  democratic forces.

The current situation with uncertainty all round and disturbed economic activity is certainly a deterrent to new local and foreign investment. Time has revealed how both parties in the past due to incompetence in governance has aggravated existing problems while creating new ones. But if we are to survive in the light of globalisation we need to think new and act new in carving out opportunities in the new economy.

Therefore, the paramount need to realise this objective is to usher in peace and competence in governance. In addition we also need a stable government. Therefore, after April 2, if the two parties can combine their strengths, pool their talent and work together, Sri Lanka can become the Singapore or Dubai of South Asia.

However, it is important for the leaders of the parties to bring to book all the politicians that have plundered this nation since 1994. This will help all our leaders to win back the confidence of the people, donor agencies and foreign investors.

On the other hand, our society also should become politically active, make greater demands of their elected leaders and be socially responsible. They must elect a government that is credible, can create a society which is united, driven by values and principles and deliver prosperity. If not, 10 years from now our nation will still be in economic and political turmoil.

Central Bank implements RTGS/SSS system 

With the implementation of the integrated RTGS/SSS system, the Central Bank of Sri Lanka (CBSL) marked another milestone in the country's payment reforms. The integrated RTGS/SSS system commenced live operations on February 3. These systems will bring about major changes in the national payment and securities settlement systems of the country.

The RTGS system will facilitate large value fund transfers and settlement on an electronic basis in real-time rather than settling at the end of the day. It will expedite fund transfers among banks, primary dealers, financial institutions, investors, customers, the government and the public.

This system will also bring about financial discipline in the banking sector since banks will have to maintain adequate cash and reserves in their accounts to meet their payment obligations, as the system will instantaneously update their settlement accounts after each transaction. This will improve the liquidity management of banks as treasurers and fund managers will have to produce accurate estimates of their liquidity requirements.

Prior to implementation of the RTGS system, the high-value payment were settled through the Central Bank current account system in the case of banks and primary dealers or through cheques or the Sri Lanka Inter-bank Payment System (SLIPS) which is an off-line payment system, on a deferred net settlement basis. The introduction of the RTGS has eliminated many of the risks associated with such deferred net settlement system.

On February 3, the scripless securities settlement module was integrated with the RTGS system. To facilitate operations, government securities were issued in scripless form with effect from 30th January 2004. The SSS would facilitate the issue of scripless securities, and their transfer among investors with a simultaneous settlement of funds through the RTGS on a Delivery versus Payment basis (DvP settlement). Sri Lanka's integrated RTGS/SSS will be known as 'Lanka Settle.'

Since the system will operate electronically and on-line, dealing in government securities will be convenient to all market participants, i.e. primary dealers, banks and investors. The Central Depository System (CDS) will be the title registry as well as the custodian for government securities. The ownership of securities will be recorded electronically in the CDS. The holders of scripless securities in the CDS will be issued confirmation of transactions as well as periodic account statements of their holdings.

All payment and settlement instructions to the RTGS/SSS system will be sent through the SWIFT communication network which is considered to be the world's most safe and secure communication system, thereby ensuring the security and reliability of the transactions routed through this system.

These systems are based on the state of the art technology and they are on par with those that have been implemented in the development world. With the implementation of the integrated RTGS/SSS system supported by SWIFT communication technology and coupled with a fully automated and real-time general ledger system and a treasury management system, the CBSL is the first in the region to adopt such sophisticated systems.

This project is a major component of the Central Bank modernisation programme which is jointly funded by the World Bank and the CBSL.

Virtusa opens second ATC centre in Sri Lanka 

Virtusa Inc., a US based leading provider of software development and related IT services, last week further expanded its operations in Sri Lanka, by opening its second Advanced Technology Center (ATC) in Colombo at the West Tower of the World Trade Center. This is in addition to the ATC located at the Trans Asia commercial complex.

Virtusa's second ATC in Sri Lanka has the capacity to accommodate an additional 350 personnel. This facility incorporates state-of-the-art ICT infrastructure that is secure, robust and provides a global collaboration platform that facilitates 24-hour virtual software development using data, VOIP, voice conferences, video conference and multiple fail-over solutions that run over international private leased circuits. This is in keeping with Virtusa's ICT standard for its global ATCs.

Virtusa has a track record of industry leading growth - over 75% growth in the last 12 months and a three year CAGR of over 50%. Employing over 1800 technology professionals worldwide, Virtusa has a staff strength of over 600 in Sri Lanka.

The addition of the second ATC will allow Virtusa to increase its staff strength to over 950 in Sri Lanka within the next 18 months. Virtusa's other ATCs are in Boston, MA, Hyderabad, India and Chennai.

The formal opening of Virtusa's second ATC in Sri Lanka took place on February 10 amidst a gathering of distinguished IT professionals and BOI officials. US Ambassador Jeffrey J. Lunstead officiated as the chief guest and the Science and Technology Minister Keheliya Rambukwella was the guest of honour.

Judges finalised for SLIM Awards 2004 

The SLIM Awards 2004 organising committee recently finalised and released its list of judges for the SLIM Awards 2004 to be held on February 28. The SLIM Awards 2004 committee also received an unprecedented 1,098 entries from a total of 29 participating companies.

The judging committee comprises several noted advertising personalities, in particular two distinguished foreign judges who will be bringing their considerable advertising know how to the table. The official judging commences on February 5 and closes on February 10. The released judges list incorporates selected judging panels for both the advertising (marcom) and integrated marketing communications (IMC) categories which are the two main areas that SLIM entries will be judged in.

The president of the panel of judges for both categories is President, Sri Lanka Institute of Marketing, Professor K.U. Kamalgoda who is currently the Managing Director, State Pharmaceuticals Corporation.

The main advertising category panel 2004 comprises two international advertising judges, three local advertising judges and three judges representing the marketing profession. This category will be judged by international advertising professionals Ariyanto Zainal and Sa'ad Hussein while the local agencies and the marketing profession will be represented by Dileepa Abeysekera, Dilith Jayaweera and Irvin Weerackody, and Sriyan de Silva Wijeyeratne, Roshni de Fonseka and Stuart Chapman respectively.

The integratedmarcom category panel 2004 or judging panel for integrated marcom comprises three local advertising judges and three judges representing the marketing profession. This category will be judged by local advertising professionals Neelani Goonetillake, Nimal Gunewardena and Lalindra Nanayakkara while the marketing profession will be represented by Muhammed Hamza, Jayampathy Arambepola and Ramal Jasinghe.

Trade agreements on the back burner 

By Ann Nicholas 

With the objective of bridging the South Asian and South East Asian economies, the signing of the BIMST-EC Free Trade Agreement (FTA) took place last week in Thailand. However the Preferential Trade Arrangement (PTA) with Thailand did not pull through.

The reason for the PTA not coming through was because Thai Premier, Dr. Thakshin Shinawatra did not favour going into an agreement at this point of time with Sri Lanka under a caretaker government. Nevertheless he had expressed confidence in Prime Minister Ranil Wickremesinghe and his government and assured that the process would resume once there is an elected government.

Under the PTA with Thailand, Sri Lanka stood to benefit from a number of tariff reductions. Speaking to The Sunday Leader, Commerce Minister, Ravi Karunanayake said, "The duty on tea was to be brought down to 5% from 60%. In the case of gems, raw material was to be traded on zero duty, while the value added products would have a duty of only 10 to 15%, which was seen as huge advantage to the gem and jewellery industry. Some of the other products also included for tariff reductions were spices, batik products and coconuts."

There is some speculation on whether the PTA with Thailand is likely to be replaced by a FTA in the future, which will facilitate a much broader based trading alliance. Commenting on this Karunanayake said, "Well a FTA is better than a PTA. With the passage of time we will be able to achieve it." He also stated that the Prime Minister wishes to meet with the Thai government towards this end.

Several FTAs with other countries such as Pakistan, Malaysia, Qatar and Egypt are in the pipeline. Regarding the imminent fear that these FTAs will be put on hold as a result of situation in the country, Karunanayake assured that "we are an on going government" and the negotiations and discussions towards achieving these FTAs would continue.

"Sri Lanka needs a more globalised approach. In order to manufacture and export rather than import and trade, we need to give access to foreign markets, on account of our local market is being relatively very small when compared to the other countries in the region," stated Karunanayake, explaining why it is important for Sri Lanka to establish trade ties through multilateral, regional and bilateral FTAs that will facilitate globalised multinational trade.

With the impending removal of the quota system in 2005, there is an urgency to form such trade ties in order to keep the garment sector going. A probable relief to this problem came in the form of a proposed FTA with the United States.

"We were supposed to get notification on this early November last year, but following the takeover of the three ministries it never materialised," said Karunanayake. He said they were questioning why they would want to reward bad governance. "The world looking at Sri Lanka sees dissolution at this point of time as absurd," added Karunanayake.

Urban development through innovative schemes 

Urbanisation is now considered to be a worldwide trend and an inevitable process. Sri Lanka is no exception and our urban population is expected to rise over the years. The urban infrastructure and facilities needs to be improved to meet this increasing demand. Facilitating sustainable urban development is the priority of my ministry which has been given the national portfolios of regional development, physical planning and urban development in addition to the responsibility for the development of the western region.

Under the Colombo Metropolitan Regional Structure Plan, the Urban Development Authority (UDA) has identified number of areas for urban renewal. It has been found that there are over 40,000 slums in the city of Colombo on very valuable lands at prime locations. The UDA is implementing a programme to provide good decent housing to these people and also to release these valuable lands for urban development activities.

Innovative scheme

Under my directions, UDA invited proposals from private sector firms, for innovative technologies to undertake construction of low cost houses in 10 identified lands. I am happy to say that there was a very good response from the private sector and after a rigorous evaluation procedure number of firms were selected for the award of these construction contracts.

Pelangastuduwa housing project will be the first housing scheme to be inaugurated under this programme. At this location UDA will be building 300 housing units at an estimated cost of around Rs. 400 million. The decision by the commercial banking sector to provide the necessary financing for this programme is a proof of our credibility as an efficient and transparent organisation.

The present programme for which the contractors have been selected through the tender procedure will add over 1500 housing units, while providing over 3000 job opportunities for both skilled and non-skilled categories. It has also been estimated that around 250 permanent employees will be required to provide service facilities at these schemes.

Our government under the able leadership of Prime Minister Ranil Wickremesinghe is working on long-term vision for the country with the objective of making Sri Lanka the hub of South Asia. In keeping with this over all vision for the country, I was able to give a sense of direction to the organisations such as the UDA, which are under my ministry. These institutions are now working with a clear vision and an objective of creating a sustainable urban environment and initiating a process of urban renewal.

New vision

When I took over there were large number of projects abandoned due to lack of funds. Although I could have washed my hands off by blaming the previous government for this mess, I thought it is my duty to fulfil the aspirations of the people by completing these projects.

I was surprised to learn that projects costing Rs. 30 million has started with only Rs. 3 million. In some projects which were supposed to be low cost, the construction cost per square foot was over Rs. 3000. We had to device various innovative schemes to find the necessary funding and complete these projects. I am happy to say one such project, the bus stand at Hambantota was completed and opened recently, fulfilling a long felt need in that area. A number of similar projects started and abandoned in Hambantota, Matara, Hakmana, Deniyaya, Kegalle and Nuwara Eliya by the last administration, have been resurrected and will be declared open soon for the use of the public.

People in and around Colombo still remember the confusion created by the previous administration by the demolition of the unauthorised structures on the pavements. Although the clearing of the pavements is a good thing, it was done without any consideration for the pavement hawkers, who entirely depended on the business they did on the pavements. I am happy that I was able to construct and provide shop spaces for displaced pavement hawkers in number of places such as World Market, Pavement Park and United Plaza at Borella.

My political philosophy has never been to go with the trend. I always did what is right. When I entered the political arena, Borella was dominated by a different culture. It was one of the most neglected areas in the city and Wanathamulla, a part of the Borella electorate was a dreaded shanty town.

People were living in makeshift structures without proper water or sanitation facilities. The shanty dwellers were given assessment numbers for the first time during my tenure as Colombo mayor. This little change made a big difference in their lives as they were able to have a permanent address, which helped them to get various other benefits from the government.

Social change

I oriented my politics to change the environment for the better. Through sheer hard work and painstaking efforts, I succeeded in bringing a complete transformation in Borella. Today Wanathamulla, the dreaded ghetto, has become an integral part of the fast developing city with all amenities. The path I followed has been proved correct, as the whole area has been changed beyond recognition, materially as well as socially. Late President Premadasa visiting Wanathamulla once said, "Now it is not Wanathamulla, but Sanathamulla."

A large number of middle class and low-income families became beneficiaries of a series of housing schemes I launched in Borella. The slum upgrading programme in Wanathamulla and Kalipillaiwatta are hailed as model schemes. In addition many recreational facilities, play grounds and community centres were constructed throughout Borella which contributed to the improvement of the quality of life.

I am happy that with the present programme, which is inaugurated today, I am continuing on a broader scale, the work I started few decades ago.

The Borella supermarket complex, the centra bus stand, stalls for pavement hawkers, shopping complex at Borella junction and the vocational training school of the CTB in Borella are among the large number of projects I initiated and completed for the development of Borella .

Very early in my political life, I realised that changing of the attitudes and the perceptions of the people is a long-term process and it could be done only through proper education. Therefore I focused on developing the educational facilities in the area. Every school was given more land, new buildings, new libraries and laboratories. A major portion of the funds from my decentralised budget was used for education. I am proud to say that some of the much sought after educational institutions today were established in Borella at my initiative.

Priority for planning

There is no argument that the development of the country needs to be based on a proper plan. One of the agencies under my ministry, the National Physical Planning Department has already completed the national physical plan for the country and we are in the process of preparing a master plan for the western region. This is being done with foreign collaboration and with the assistance of the Board of Investment. However, such plans have to be very carefully studied and investigated before being implemented.

Our activities are not limited to the western region. Under my direction the UDA is taking action to prepare development plans for all the cities and towns declared under the law. Some of these plans such Colombo, and Kandy has been gazetted already.

The UDA is in the process of preparing plans for number of towns in the northern and eastern provinces, and these plans will be the basis for future reconstruction and redevelopment of these areas. I was able to accelerate this process and plans are now available for about 25 towns.

The National Physical Planning Department is implementing a island wide programme to upgrade the facilities at all the declared sacred areas in the country. Work at Sri Dalada Maligawa, Kelaniya Rajamaha Viharaya, Kotte Rajamaha Viharaya, Tewatta Church and Kaththankudy Mosque has already commenced. The estimated cost of this upgrading programme is around Rs. 30 million.

As a former city councillor and Colombo mayor, I have first hand knowledge about the working of the local authorities and their potential. We are aiming at a very cordial relationship with local authorities throughout the country, and I have instructed the UDA to work closely with these institutions. With this objective we have devolved the powers of the UDA to the local authorities and it is in their own interest to implement the rules and regulations properly.

The UDA is in the process of working out a scheme to help the local authorities financially to implement their development projects. However if the local authorities are unable to carry out their functions, we may have to look for other options. My ministry is also implementing a rural road rehabilitation programme in all the districts in collaboration with the local authorities.

With the assistance of a very able set of professionals I have succeeded in bringing back the UDA on the rails. The UDA has been successful in collecting most of the debts and the organisation which was collapsing has been resurrected.

A restructuring study has been completed and the implementation of these recommendations will make the UDA a more efficient and commercially viable public organisation.

The projects we are commencing are only the beginning of a series of development projects we are planning to implement in the near future.

Implementation of these programmes and projects will bring about an urban revival in the towns, cities and municipalities, creating jobs, wealth and sustainable livelihoods in all sectors of the economy and in all regions of the country.

- M.H. Mohamed
Western Region Development Minister

Dr. Frank Morgan to talk on 'Strategic Leadership
For Global Competitive Advantage' 

What makes a country or a company globally competitive? What does the World Competitiveness Report mean for companies in Sri Lanka and South Asia? What do globally admired companies like Dow Chemical do to drive change, execute their people processes, their people-profit chain, the business fundamentals, and develop their current and future leaders and managers?

How does a company execute its learning and corporate culture? What does this all mean to countries like Sri Lanka? What must decision makers and policy makers in Sri Lanka and South Asia do today to excel and maintain global competitive advantage in the hyper-competitive, volatile knowledge economy?

These are among the challenges that will be addressed by Global Head (Leadership and Executive Development), Dow Chemical World Headquarters, Michigan, USA, Frank T. Morgan PhD. Dow Chemical has been ranked by Fortune Magazine 2002 among the world's most admired and well-run companies.

Dr. Frank Morgan will be in Colombo, Sri Lanka on February 18 and 19 to address CEOs, directors, senior managers and policy makers on 'Strategic Leadership For Global Competitive Advantage.' The two day professional development programme is driven by the Institute of Chartered Accountants and the OPA and is endorsed by the Association of Professional Bankers, Chartered Institute of Bankers, Sri Lanka Institute of Marketing, Institute of Personnel Management, National Institute of Business Management, Sri Lanka Economic Association and the PIM Alumni Association.

"What makes this two day programme truly unique is its affordability, the substance and that Dr. Morgan is not a guru, but a world class practitioner at a Fortune 100 company ranked by Fortune Magazine 2002 among the world's most admired and well-run companies," said the event organisers. "He has also headed the executive education programmes of the two of the world's top business schools and continues to teach leadership and leading strategic change at Duke University, ranked number one in the world by the Financial Times and Business Week in 2003, for customised corporate education," they added.

Dr. Morgan's presentation will focus on a mastery and execution of business and financial fundamentals critical for excellence in the new global knowledge economy. These include cash flow, margin, growth, stock value and the people-profit chain; executing marketing strategy, and customer centric orientation; strategic alignment of the organisation; measuring the performance of management; understanding why performance measurement systems fail and how to make them work; getting senior management and the board involved in monitoring; making the balanced scorecard work; how Dow Chemical develops its leaders and managers and drives change; the Dow learning and corporate culture; and how a globally admired company implements its people processes.

Dr. Morgan will also lead an open discussion on what makes nations and companies globally competitive, the World Competitiveness Report and its applicability to countries like Sri Lanka, why the Soviet Union fell, what Sri Lankan companies and policy makers can learn from global and Asian case studies and Asian business leaders. The focus of the two days will be on implementing the lessons learned in the Sri Lankan and South Asian context.

Dr. Morgan has served as Professor of Management, Kenan-Flagler Graduate School of Management, University of North Carolina' Chapel Hill, ranked by the Wall Street Journal and Business Week among the top 10 business schools and executive education programmes in the USA. He was also Director, Executive Education, Darden Graduate School of Business, University of Virginia, USA, also ranked among the top 10 business schools in the USA. Dr. Morgan contributed an expert analysis for the case study in the March 2002 issue of Harvard Business Review.

In addition, to his current responsibility at Dow Chemical, Dr. Morgan continues to teach leadership and leading strategic change in the corporate education programme at Duke University, ranked number one in the world by Business Week and Financial Times in 2003 for corporate education. In 2003, Dr. Morgan taught the senior partners of a leading accounting, tax and consulting firm and senior officers of the US Navy. Clients of Duke Corporate Education include Price Waterhouse Coopers, AT&T, British Airways, Deutsche Bank, GlaxoSmithKline, Goldman Sachs, Morgan Stanley, Erection CARE, Compaq, Ford, 1BM, Nestle, Royal Dutch Shell, the New York Times, ABB, Credit Suisse and Zurich Financial, among others.

Dr. Morgan has consulted with the senior management of Federal Express, CARE, Nortel, Lockheed, Pratt and Whitney, the US Navy and Weyerhaeuser among others. He has worked extensively in developing countries in Latin America and Asia and is fluent in Spanish and French.

Microsoft opens subsidiary in Sri Lanka 

Microsoft Corporation last week announced the official opening of a fully owned subsidiary office in Sri Lanka.

Based in Colombo, the new Microsoft subsidiary. will be responsible for rolling out in-country marketing and sales programmes together with their market development partner with a total staff strength of 15 people.

It will also be supporting the e-Sri Lanka initiative through a multi-million dollar investment in technology, training, educational assistance and infrastructure as part of its investment and commitment to Sri Lanka.

"The establishment of our Sri Lanka subsidiary office reflects Microsoft's deep commitment to the e-Sri Lanka initiative and a show of support for the creation of a vibrant local information technology economy," said President, Microsoft  (Asia Pacific), Sanjay Mirchandani.

Microsoft Sri Lanka will be supported by a local market development partner, CMT Ltd. and will be working closely with local distributors (Ingram Micro and Tech Distribution Ltd.) and partners in Sri Lanka to provide the technology and know-how, building towards a healthy local IT ecosystem.

In November last year, Microsoft announced its support and commitment to enhance its technology capability, a wide range of initiatives around greater access to localised software, education and training, and support for various government projects.

One of the first programmes which the new team within the subsidiary office will undertake is the roadmap for key programs such as the Partners-in-Learning initiative.

To further strengthen Sri Lanka's e-government services, Microsoft has set a goal of providing three leading edge e-government solutions and will assist the government to establish an e-government portal, ultimately providing a new experience for citizens and business by year-end.

Singer service centres ISO certified 

The service division of Singer Sri Lanka has been awarded the prestigious ISO 9001:2000 certification, thus gaining recognition for its quality management systems. The awarding authority is SGS Lanka Limited, a quality standards institution with principals in the United Kingdom. The ISO 9001 certification covers the Singer regional service centres in Colombo, Kandy, Anuradhapura and Matara.

Addressing the award ceremony at the Taj Samudra Hotel, Country Manager, SGS, D. Dharmadasa said that only a very few companies in Sri Lanka has been awarded ISO 9001 certification for service. "What Singer Sri Lanka has received is the UK accreditation which is one of the most stringent systems in the world," he said. He congratulated the Singer service management and staff for the hard work put in over a period of 18 months to qualify for the certification going through a complete process, which also meant a change in the culture of the organisation as well as attitudes of people.

Describing the ISO certification as "a proud possession" of any company, Chairman, Singer, Hemaka Amarasuriya said that Singer employees have proved that world standards are within their reach. "This is only the first step. We cannot stop at this. We must strive to achieve higher goals. It can be done by continuing the team effort displayed in the recent effort," he said.

BA chief calls for close cooperation

British Airways' Chief Executive, Rod Eddington has called for closer cooperation between governments to tackle terrorist threats.

Speaking at the International Aviation Club in Washington recently he said, "No one can pretend it is easy to get the balance right between protecting our customers and employees from terrorist attack while respecting their desire to go about their business without unnecessary hindrance."

"The aviation industry is too important a driver of economic activity to be the victim of terrorists' goals. Winning the war on terror and convincing customers it is safe to travel were vital. While British Airways is 100 percent supportive of the efforts being made by governments to win the war on terror, what we do ask for is more cooperation and consultation between governments," he said.

He further warned, "We need an international approach to an international problem. A unilateral imposition of longer term security measures can be counter productive."

A joint approach between the European Union and USA on the recent demand for additional passenger data would have produced a quicker result. The need for sky marshals and biometric data on passports would also be best tackled by cooperative dialogue rather that imposition, he said.

The cost of these measures should also be considered. The US government pays the cost of additional security measures, but in Europe, many governments, including Britain, are opposed to fully funding extra security requirements.

After the September 11 terrorist attack, British Airways' additional security measures, such as installing reinforced cockpit doors across its entire fleet cost US$ 180 million.

"The prospect of funding even more enhancements, such as anti-missile devices, is daunting and passing the extra costs on to passengers is not an option. Security funding is clearly an area where we do not have a level playing field and competition is distorted," Eddington said.

Lanka Bell launches BellTalk 

BellTalk is a new, innovative service made available by Lanka Bell for the first time in Sri Lanka. It allows Lanka Bell's BellNet users to retrieve, listen to and reply to and reply to their e-mails from any telephone, anywhere in the world. Subscribers to the BellTalk service can listen to e-mails received in their BellNet e-mail boxes and send verbal replies. The received e-mails can also be read on a conventional computer screen.

To listen to received e-mails, an user can dial 5373373 from any fixed line, mobile or pay phone and enter the personal identification number (PIN). Voice-prompts then guide the user to retrieve e-mails from the server and listen to them. The last received e-mail will be played first. The user can select the e-mails to be listened to by pressing relevant keys on the phone. The voice-prompts also help the user to mail verbal replies, which can be heard by the recipients on their multimedia computer speakers. Such voice replies will be sent as attachments in the form of wave files, which can be heard by the recipient simply by double-clicking them.