India wants to replicate S'pore success in CEPA

Talks in relation to the Comprehensive Economic Partnership Agreement (CEPA) between India and Sri Lanka will be held towards the end of next month, Indian High Commission's Commercial Counsellor Sunjay Sudhir told The Sunday Leader on Friday.

The objective of CEPA is to expand the current Indo Lanka Free Trade Agreement (ILFTA) that is at present restricted to goods and services, to cover services and investments as well.

Meanwhile, Sudhir said that the Indian delegation would be led by its Joint Secretary Department of Commerce Rajeev Kher. The meeting in Colombo would last about 2-3 days, he said.

He however refused to divulge what would be in the agenda. "That has not yet been finalized," said Sudhir. Earlier, Indian High Commissioner Alok Prasad, addressing the Indo-Lanka Chamber of Commerce and Industry in Colombo on Friday, said that Prime Minister Manmohan Singh was keen to expand trade in the Asian region.

Prasad, who formerly served as India's High Commissioner to Singapore, before being assigned to Colombo, witnessed during his tenure in Singapore, such a comprehensive economic partnership being entered into between Singapore and India. "We want to replicate the Singaporean experience," said Prasad.

He said that talks between the two countries on CEPA hardly made any progress last year. But Prasad said that India was keen that it should take off. Prasad also said that in an assymetrical move, India plans to reduce the number of items in its negative list vis-…-vis the ILFTA.

He further said that in regard to tea exports from Sri Lanka to India, currently restricted to two ports, Cochin and Calcutta, to be expanded, with the possibility of Chennai also being included. India was keen on removing non-tariff barriers so that Sri Lanka could benefit from India's economic boom, he said.

Another area in relation to the removal of NTBs that they were looking at was with regard to garment imports from Sri Lanka. In relation to the liberalization of financial services, they were looking at areas covering finance, such as banking and insurance and even the movement of professional service providers like doctors, lawyers and auditing, he said. Prasad further said that Vanaspathi imports to India is normally charged a 75% duty. But under the ILFTA it is zero. In order to protect the Indian vanaspathi industry, an annual cap of 250,000 metric tons (mts) have been placed in regard to vanaspathi imports from Sri Lanka.

Trade between the two countries since the signing of the ILFTA in 2000 has grown from 5-600 million dollars to $ 2.2 billion.

In relation to the gradual liberalization of duties in India and the possible negative impact such a scenario would have on Indian investments made in Sri Lanka, with the intent of taking advantage of the duty concessions offered under the ILFTA, Prasad said that trend could not be reversed. "You cannot be protected for ever, your enterprise needs to be viable," he added. Average duties which were between 200-250% prior to liberalization, has since come down to 15%.

Reduction of duties is a global trend and it is only those industries that are efficient, would be able to compete in such an environment, he said. Prasad also said that since India liberalized its economy in 1991, it has grown two fold. And it's bound to grow a further two fold soon.

Two-three hundred million people have come out from the poverty trap and has joined the ranks of the consuming middle-class after the implementation of reforms. Poverty, according to conservative estimates, has come down from 36% to 25%. Another 200 million are expected to come out of the poverty trap in the next couple of years.

The Indian economy is expected to grow by 9.2% this year. It is a $ 900 billion economy and is expected to pass the trillion mark in the next 1-11/2 years. It's corporate India that is leading India's reforms process.

When the top 100 corporates in the 1991 list is compared with the present list, only 30 of the old guard still remained. Companies such as Infosys and Reliance which are in the present list, was not there in 1991.

Though names such as Birla and Tata are still there in both lists, those companies however have since innovated.

But prior to liberalization, from the 1950s, '60s and '70s, India's economy grew at 2-3%, equal to its population growth, keeping millions of its people entrapped in poverty.

Govts. fall if Indian inflation passes 5%

In India, if inflation passes 5-6%, that would result in governments being toppled, Indian High Commissioner Alok Prasad said on Friday.

Addressing the Indo-Lanka Chamber of Commerce and Industry, he said that if the price of onions doubled, that would hasten the government's departure even faster. Currently inflation in India is in the range of 4.5-5%.

He further said that it was macro-economic stability that spurs growth. Prasad said that though growth in India accelerated in the 1980s, that period was also dogged by high inflation and a worsening external balance of payments position.

But at present, India has reserves amounting to $ 180 billion and the government does not know what to do with it! The Indian economy is being integrated. Exports last year grew by 20% to $ 120 billion. Imports amounted to $ 170 billion. But this is positive, because imported raw material is needed to feed the factories in India. FDI investment last year amounted to $ 8.5 billion, lower than China's $ 40-45 billion. Indian companies are investing abroad.

India believes in gradual change. It does not want to rush into reforms and suffer the fate of Indonesia and Argentina. Three million mobile connections are being made every month in India.

Performances in the port sector are improving. Turnaround time which was 3-4 weeks previously, has now been reduced to 3-4 days. But there is still a long way to go in this sector. For instance the turnaround time in Singapore is a mere 3-4 hours.

In India's quest to achieve a 10% economic growth, the agriculture sector would have to correspondingly grow by 4%. For this, the government is targeting public investments in rural infrastructure like roads.

No social security without liberalization

For Sri Lanka to have a social security system, then government controlled funds such as the EPF and ETF will have to be liberalized, Institute of Policy Studies Executive Director Dr Saman Kelegama said.

Speaking at a Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) organized seminar on Friday, he however said that that would be a difficult thing to do, with Sri Lanka running high budget deficits of between 8-10%.

Captive funds such as the EPF and ETF are used by the government to borrow at low interest rates, rather than making such borrowings from the banking system. He said as such it would be difficult for the government to institute labour reforms, because, in the absence of a social security system in the country, the only protection the worker therefore has is job security, he said.

Stressing the importance of industrial peace, Kelegama said that as Sri Lanka is now recognized as a middle-income country, it has to go to the market to meet its borrowing requirements. For this purpose, the sovereign rating of B-  that the country received is important.

But, if there is industrial unrest, this rating could go down even further. This would make commercial borrowings more expensive. The FCCISL, in order to facilitate better industrial relations has set-up the Industrial Relations Forum (IRF).

He also said that trade unions were politicized, working not on the interest of the worker, but in the interest of some political agency. If not for the strike in the plantations and in the ports last year, Sri Lanka would have grown by over 7.5%, said Kelegama. The country recorded a 7.4% growth rate in 2006.

He further said that for greater transparency, trade unions should elect their leaders by ballot and prepare annual reports to show how they utilize the membership fees collected from workers affiliated to their unions.

FCCISL seeks JVs with China

A 70 strong chambers delegation would leave for China with President Mahinda Rajapakse on a week long tour beginning today.

Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) President Nawaz Rajabdeen said on Friday that among the chamber delegates are those representing  regional chambers from places such as Matara, Kalutara and from the Sabaraga-muwa Province. However, no delegates from the regional chambers in the North and East are making this trip, he said. This was due to the bureaucracy involved in obtaining security clearance, said Rajabdeen.

He further said that Rajapakse was specifically interested that regional chambers make this visit. "Never mind if they don't clinch orders, but what I want is for them to get that international exposure," Rajapakse had said, according to Rajabdeen.

The FCCISL, which is playing a lead role in this chambers' tour to China, would focus on promoting joint ventures(JVs),  in areas such as rubber based industries. The focus is for them to set-up JVs with Chinese partners in Sri Lanka, in order to export to India, capitalizing on the Indo-Lanka Free Trade Agreement (ILFTA), said Rajabdeen.

"One area that we are looking at in this connection is the rubber component industry, to feed the Indian automobile industry, he said.

The FCCISL in this connection would be liaising with China's largest chamber movement, the China Council for the Promotion of International Trade (CCPIT).

Visits to Shan-ghai, and the Guangzou export promotion zone have also being organized, he said. "It's not exporting to China that we are looking at, but promoting JVs," added Rajabdeen.

PBJ dodges reporters

Treasury Secretary Dr. P.B. Jayasundera scooted off from a press conference on Friday before reporters could ask him questions after he spoke about the country's development agenda.

Jayasundera said that at the Sri Lanka Development Forum that concluded in Galle recently, donor agencies had had pledged $ 4.5 billion to take forward Sri Lanka's development agenda. But World Bank Vice President South Asia region Praful Patel told The Sunday Leader at a post development forum media briefing, that no such pledge had been made by the donor agencies at this forum.

However, before reporters could ask Jayasundera any questions, he left the Finance Ministry auditorium where the briefing was being held, giving the Director General of Inland Revenue A.A. Wijepala the podium to address reporters.

Jayasundera earlier said that Japan has pledged Yen 39.3 billion for the outer circular road project and "water development" projects. He said that the Hambantota port would be developed with Chinese assistance. They hope to increase foreign aid utilization this year to $ 1.5 billion, up from the $ 1.1 billion used in 2006.

Among the other projected targets were, the increase in foreign remittances from $ 2.5 billion to $ 2.8 billion, increase in tourism receipts to $ 500 million this year, with 600,000 tourist arrivals envisaged this year. And tourism receipts, in the next 2-3 years to be increased to $ one billion.

news in brief

Finance ministry stumps Bandula

Customs Director General Sarath Jayathilake exposed the lie of Trade Minister Bandula Gunewardena when he said that his Department had not increased the duty free status of certain essential items upto the Avurudhu (April) season in order to provide these items to the consumer at a reasonable price.

"I have got no such order from the Finance Ministry," Jayathilake told reporters on Friday, at a briefing that was presided over by Deputy Finance Minister Ranjith Siyambalapitiya. Siyambalapitiya did not contradict Jayathilake.

Gunewardena earlier told The Morning Leader in its February 21 issue that the duty free status of essential food items such as onions, sugar, dried chillies, sprats, potatoes and lentils, that was instituted in December to provide cheap food for the consumer and which expired on February 15, had been extended till the Avurudhu season.

The local harvest starts rolling into the market from now, therefore if the import duty waiver is extended till the Avurudhu season, it will affect the local farmer, said Jayathilake.

Siyambalapitiya said that this is one of the steps that the government is taking to reduce inflation.

8,000 graduate recruits

Deputy Finance Minister Ranjith Siyambalapitiya told reporters on Friday that following the recruitment of 42,000 graduates by the UPFA government, 8,000 more would be taken into government service.

He said that of these 8,000 to be recruited, 4,000 will have to serve in schools located in "difficult areas" as teachers for a period of five years. A further 1,500 would be absorbed into the state sector.

Tech. fund for SMEs

The government is having talks with the ADB to set-up a technology fund, especially targeting the SME sector, Institute of Policy Studies Executive Director Dr Saman Kelegama addressing a Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) seminar on Friday said.

Figures however have not been worked out, he said. The implementing agency is the National Economic Development Agency that comes under Investment Promotion Minister Dr. Sarath Amunugama, he said.

Govt. uses captive funds for borrowing

Treasury bill rates continued with their upward trend despite government's efforts to keep down rates and borrow cheap by bringing in captive funds such as the Bank of Ceylon and People's Bank to invest in this auction that was held on Wednesday, informed sources said.

The weighted average yields (WAYs) of 91 day, 182 day and 364 day bills increased by three, five and three basis points respectively to register WAYs of 13.78%, 13.82% and 14.12%. A total of  Rs 11,978 million worth of bills were offered for re-issue at this auction.

"While Rs 8,938 million treasury bills were accepted from the market, the balance Rs 3,040 million worth of bills were retired," the Central Bank said.

ISO 22000 for Dickoya

Watawala Plantations Ltd., has obtained the ISO 22000 Certification for Diekoya Estate selling under the "Adisham/Dickoya" marks.

(Forbes & Walker)

54% increase in HNB's pre-tax profits

Hatton National Bank (HNB), acknowledged by the internationally respected UK Banker Magazine as Sri Lanka's Bank of the year 2006, has ended another year of robust performance with solid improvements in key financial indicators, said a statement.

Commenting on the audited statements released for year ended December 31, 2006, HNB Managing Director Rajendra Theagarajah said: "Team HNB has pursued a path of implementing selected strategies designed to meet the set of challenges we identified as critical for delivering superior value to our stakeholders during the last twelve months with a unified focus and vigour."

As per the audited results released recently, HNB and its subsidiaries and associate companies recorded a significant growth of 54% in pre tax profit in 2006, compared to Rs 2,008 million-in 2005, standing at Rs 3,095 million.

 The bank alone recorded a pre tax profit of Rs 3,019 million, a 63 % growth over the previous year. Post tax profit attributable to the Group crossed the important milestone of Rs. two billion to record Rs 2,276 million compared to Rs 1,795 million in 2005.

The Bank's after-tax profit too recorded a 34 % increase to Rs 2,220 million despite a charge of Rs 799 million for corporate taxes. Group turnover increased by Rs 10 billion to reach Rs 23.2 billion crossing the important Rs 20 billion milestone.

Growth in Net Interest Income (26%) and Fee and Commission Income (8%) contributed towards a healthy growth in Net Income of 21%. Foreign Exchange contributed Rs 792 million recording a healthy increase of 22% over 2005.

The continued focus on cost management has led to operating costs (including provision for bad and doubtful debts, and bad debt write-offs) increasing by only 11.5 % during the year despite inflation reaching 19% in 2006. A notable achievement was that the provision for bad and doubtful debts decreased by a massive 47%.

Gross Advances grew by Rs 21 billion to Rs 136 billion.  Focus on portfolio quality was evident with the Non Performing Advances Ratio (Net of provisions) reducing to 2.27% (from 3.05 % in 2005) while the Provision cover improved to 74%. Selective acquisition of assets ensured that the Total Assets of the Bank increased by Rs 30 billion to reach Rs 196 billion. The Deposit base grew by 15% to Rs 148 billion.

HNB's Capital Adequacy too showed healthy position despite an upward revision during 2006 in the risk weights applied to the majority of the advances categories including housing by 10%.  Tier I ratio reached 10.23% while the combined Tier I and II ratio reached 11.32% well above the minimum regulatory requirements of 5% and 10% respectively. The Return on Average Assets improved by almost 18% to 1.23% from 1.04% in 2005 while Shareholders' Funds grew by a healthy 15% to reach Rs 12.9 billion.

The directors have recommended a final dividend of 25 % to be paid which will result in the total dividend for 2006 being 50 % (40% in 2005). At a meeting of the Board held recently, the directors have also recommended a script (bonus) issue to ordinary shareholders on the basis of one ordinary share for each ordinary share currently outstanding.

HNB's voting share price ended at Rs 190.00 while non voting share ended at Rs 89.75 on February15, 2007.

IIHE provides corporate exposure

Imperial Institute of Higher Education (IIHE), one of the oldest tertiary education institutes in Sri Lanka and the validated centre to award Wales University  (WU) degrees locally, has introduced a practical, young entrepreneur development programme with its "Seminar In Marketing" module, which is a skills development module of the BSc. (Hons) Business Management degree, said a statement.

 This is the first time in Sri Lanka a foreign degree-awarding body has introduced a comprehensive employment oriented program for its undergraduates.

            "The objective behind setting up of the IIHE was to provide world recognized, quality guaranteed, up-to-date UK tertiary education at an affordable price to Sri Lankan students.   We tied up with WU because of its long and distinguished academic history as it is the second oldest and the second largest federal university in the UK.

 Instead of casually replicating foreign degrees in Sri Lanka, which sometimes serves  to no purpose, we at IIHE go through a lengthy process to customize the academic courses to suit local requirements while keeping up with global standards.

 These courses are then evaluated and mapped against the prevailing WU degree modules and after a stringent quality assurance process, the WU awards the validation." IIHE CEO Dr. Thilak Weerakoon said.

"Seminar in Marketing" has been developed as part of this academic "customisation" programme.   Under this module, final year BSc. students who are specializing in marketing are expected to incorporate their own company under the local company's act, source funds, manufacture a product, launch the product/s and market them.

They are also expected to prepare audited accounts.  The grading for this module depends on their success with the company and an additional written examination.

            Gunith De Silva  and Shehan Mendis, two members of  a company that was set up to sell a presentations skills programme anda corresponding CD said, "The experience and exposure we got while carrying out this assignment is tremendous.  It was like a fast track programme to the real corporate world.  This gave us an opportunity to explore our strengths and capabilities and understand the happenings of the real business world and actively set up and manage our own businesses. We got a holistic and first hand experience on becoming entrepreneurs." 

"We chose the WU BSc degree programme because of the various value additions it has incorporated into its academic agenda.   The team working and networking opportunities we got by engaging in the seminar in marketing programme were remarkable. 

 All the members of the real corporate world with whom we had to interact were  understanding and supportive.  In fact some of the elite companies even offered us employment in their organizations! 

We appreciate what IIHE has done to develop us into fully-fledged professionals who are capable of taking up challenges in the demanding business world." Said Sun Beam Ltd CEO Angela Gonawela.

Sun Beam is a T-Shirt marketing company promoting a concept called "Good Citizen."  All the proceeds from these business ventures will be donated to charity. Such a decision by these teams, even at this young age shows that they have learnt what corporate social responsibilities are.      

In addition, the programme also offers a 'Real Life Problem Solving' -RLPS module where final year students have to undertake a consulting assignment for a company. The company will brief the students about a "real" problem that exists within the company. The student team under the supervision of a faculty member has to function as professional consultants and submit a report identifying solutions.

 These findings will then be presented during a formal boardroom scenario in the presence of the respective company officials.  According to IIHE sources some of the companies have not only implemented those recommendations but have recruited some of the students once they passed out as graduates.

"The main purpose behind all these value adding programmes is to develop professionals who have the necessary knowledge to set up or lead modern organizations in a very competitive and sustainable manner.

We believe that Sri Lanka needs a group of hands-on, visionary business leaders and this is our way of grooming them. 

Though this was the first time we conducted such a programme, due to the unprecedented success it has brought in and the positive feedback we have got from our students and their parents, IIHE will continue to expand and enrich the learning experience of our students with innovative academic modules." Dr. Weerakoon further commented. 

IIHE has been awarding UK degrees to Sri Lankan students since 1996 and they have BSc. programmes in Management and in IT and an MBA at present, all validated by WU.

LB's Rs 1 mn. prize won

A lucky Lanka Bell (LB) subscriber walked away from a ceremony in Colombo recently, richer by Rs. one million, bringing to a close a consumer promotion by LB, said a statement.

Mrs P. D. S. Samarasinghe from Kottawa, the winner of this bonanza said she had been an LB subscriber since 2005 and was overwhelmed by her good luck.

"I was aware that there was a competition on, but I did not even check what the rules were. All I did was use my LB phone and I was surprised to learn I had won Rs one million," she said.

Speaking at the presentation, LB Managing Director Suren Goonewardene said the promotion which awarded more than 16,000 prizes had enabled the company to interact with a wide cross section of its huge customer base. "LB is proud of its status as the only wholly Sri Lankan telecoms company in the country and this promotion enabled us to reward customers across the island," he said.

"This promotion was the first of its kind in Sri Lanka's telecoms sector. LB has many firsts to its credit, so this is no surprise to our subscribers,"  Goonewardene said, adding that a unique feature of the promotion was the fact that valuable prizes, including the grand prize of Rs one million, air tickets, television sets, gold sovereigns, washing machines and microwaves were awarded by the CDMA operator that offers the lowest call rates in the country.

All of LB's BellTel and BellTel Budget subscribers as well as post-paid residential customers were eligible to participate in this promotion and qualified for upto three monthly draws. All subscribers in these categories who received a minimum monthly bill of Rs 750 and whose bills were 30% higher than in the month preceding the launch of the promotion were eligible to participate. Customers whose bills did not increase by 30% also qualified if their bills exceeded Rs 2,000.

Established in 1997 with an initial investment of US$ 150 million, LB was the first 'fixed-line wireless' telecoms provider in the country and is the second-largest fixed line telecoms company in Sri Lanka today. The company was acquired by Milford Holdings in 2005 and following strategic investments of more than Rs six billion in its network. Coverage is now expanding at the rate of five new base stations a month, making affordable CDMA technology available across the island.

Sparklink launches website

A pioneer in the Travel & Tourism Industry since 1979, Sparklink Travels Ltd's interactive website was officially launched by Prime Minister Ratnasiri Wickramanayaka at his office recently, said a statement.

The company was represented by Executive Director Praki Perera, General Manager Dilshan Samaranayake, Assistant General Manager Avindra Gurusinha and E-Coordinator Ms Eshanthi Ratnayake. 

The online travel website offers corporate and leisure clients in Sri Lanka and overseas the convenience of logging onto the site to view special offers on airfares, hotels, tours and cruises, foreign currency rates  and information on travel insurance, frequent flyer programmes and embassy and visa submission procedures.

The site offers the traveller to submit requirements of any service, to the Colombo Head Office or the Kandy Office for a guaranteed response within 24 hours.

The Company has grown in the past 27 years to be a market leader in outbound travel and have won several awards from leading airlines. Sparklink  is an IATA approved Agent  and an AFTA member.

Its Chairman Nihal C. B. Perera is the current president of the Travel Agents Association of Sri Lanka (TAASL). The focus of the Company is to treat all clients to "come as a client  and leave as a Friend."

Customer satisfaction uppermost

The Finance Company Ltd (TFCL) which is on an exciting journey has launched a revolutionary new line of loan schemes under the Payen Kasi  (PK) brand, said a statement.

The title of the product speaks for itself, said TFCL Deputy Chief Executive Director Roshan Egodage. "We have now made it simple for a customer to obtain credit. Through this innovative scheme, a customer just needs to drive in and out in his vehicle, with the facility, with no complications. We are confident that the experience the customer would envisage is well above expectations. No doubt, this will strengthen TFCL as a preferred financial solutions provider in the minds of customers, said Egodage.

He went on to say that the requirements "we look at in granting a loan through the PK scheme is defined even in all "our print material and the requirements are minimal." Once these documents are submitted to any TFCL branch, a customer could be certain of walking out obtaining his facility within an hour. "This will simplify the way of getting a loan on your car to meet any urgent financial needs."

TFCL is looking at the future with positivism and confidence of reaching its goals. We are determined to be a household name by providing financial Solutions that are of the new generation, said Egodage.  Egodage further said that TFCL's operations have constantly been on the upward trend, "while recording remarkable growth levels on almost all our products." With the introduction of this exciting Loan Scheme, PK, practically all four corners of Sri Lanka will share the benefits of this product.

In conclusion Egodage said that customer satisfaction and growth will take precedence over others.

Harry J. loses round three to Vitachchi

The Appeal Court last week issued an interim order against business magnate Don Harold Stassen Jayawardena, managing director of Stassen Exports Ltd., restraining him from obstructing the work of Dr. V. P.  Vittachchi, another director of Stassens, till a final determination of this case is made.

The bench comprising Justices L.K. Wimalchandra and Eric Basnayake, also restrained the first respondent Jayawardena (till a finaldetermination is made), from intervening and obstructing the plaintiffpetitioner Vittachchi, whilst he is functioning as a director. Other restraining orders made against Jayawardena were not to deprive Vittachchi of his salary, allowances and other emoluments and also vehicle and other facilities provided by Stassens (the fifth respondent), until a final determination is made by Court. Vittachchi in his appeal, challenged the Colombo District Court order to vacate the earlier enjoining order issued against Jayawardena that had prevented the latter from removing Vittachchi from his post as a director.

The matter was listed for inquiry on July 4. In his plea, Vittachchi had said that he was a director of  Stassens Exports Ltd that started as a tea exporting firm. The company had made rapid progress since, becoming one of the country's leading  tea exporters.

But Jayawardena had illegally removed him from functioning as a director in November, 2006. However, according to the Companies Act, a director could be removed only at a shareholders' meeting. But his removal came without any decision taken at either a shareholders' meeting or at a board meeting', the petition said.

Wijeyadasa Rajapakse (PC) with lawyers Kuvera De Soyza and Kapila Liyanagamage instructed by G.G. Arulpragasam appeared for Vittachchi. S. A. Parathalingam (PC) with lawyer N.R. Sivendran appeared for Jayawardena. Ikram Mohamed (PC) with lawyer Sumedha Mahawanniarachchi appeared for the second respondent Stassen Director R.K.  Obeysekere; lawyer Chandeka Jayasundera  for the third respondent, director Zaki Alif; D. S. Wijesinghe (PC) for the fourth respondent, director Dr. Noor Mohamed Abdul Gaffar and lawyer Sanjeewa Jayawardena for the sixth respondent, Secretaries and Registrars Ltd.

Milinda dithers, tourism burns

By Nirmala  Kannangara

The Cabinet's decision to postpone the new Tourism Act No. 38 0f 2005 at the request of Tourism Minister Milinda Moragoda has raised several concerns among the tourism industry.

  Tourist Hotel Association of Sri Lanka (THASL) representatives said that although they had high hopes in regard to the implementation of the Tourism Act with the appointment of the new minister, they are now disappointed, as per the decision taken by the Minister to postpone its implementation.

However Additional Tour-ism Ministry Secretary George Michael told The Sunday Leader that all stakeholders were informed about the postponement as new amendments have to be done to the Act if it is to gain good results It will not take more than one and a half months to implement the revised Tourism Act" Michael assured.

  However, THASL Vice President Srilal Miththapala told The Sunday Leader that they were disappointed of this sudden change and said that they wanted Moragoda to implement this Act without any further delay as it could boost the industry in many ways.

  "THASL is of the view that any modifications if needed to the Act could even be made after implementation. This piece of legislation has been discussed for over 10 years, considered by three different governments and finally passed unanimously in parliament in late 2005. So what is there to amend to the much talked Act," claimed Miththapala.

Southern Hoteliers Association President Charmin Wickremasinghe told The Sunday Leader that it was a big disappointment for the industry to hear of this postponement.

Auction averages set records

The tea sale of February 13/14 which registered a total average of Rs.244.81 per kilo is the highest ever weekly average recorded.

These averages also indicate a gain even in US Dollar terms, ie, US$ 2.09 per kg. in the February 7 sale and $ 2.24 in the Feb. 14 sale as against the corresponding averages of $ 1.87 and $ 1.89 in 2006 and $ 1.90 each in the corresponding sales of 2005.

Although the averages in question elaborated above and below compare well with the corresponding figures from a producers point of view,  the cost of production too has spiralled owing to the low crops and other increased costs etc. Needless to say from a traders point of view such low volumes would also create volatile market conditions which would also have its negative impact on trading.

The Feb. 13/14 sale has also registered a gain of Rs.50.51 per kg against the corresponding sale average of 2006 of Rs. 194.30 per kg. High Grown average of Rs.260.01 per kg shows a gain of Rs.45.42 per kg against Rs.214.89 per kg, whilst Medium Growns at Rs.206.16 per kg shows a gain of Rs.36.20 per kg against Rs.169.92. And Low Growns at Rs.247.05 per kg shows a gain of Rs.53.29 per kg against its.193.76 per kg. price in the corresponding sale of last year.
(Forbes & Walker)

CB raises policy rates by 0.5%

Improved performance in the production of Agriculture, Industry and Services sectors has impacted beneficially on the continued growth momentum in the economy, the Central Bank (CB) in a statement said.

  Recovery in tea and the fisheries industry together with the increased production in rubber and coconut have contributed to the overall growth in the Agriculture sector and this is expected to continue in 2007. The Industrial sector is also expected to record a higher production, resulting from increased demand arising from major infrastructure development projects taking place, while the Services sector is expected to benefit particularly from the developments in ports and telecoms.

Inflation, as measured by the point to point change in the Colombo Consumers' Price Index (CCPI), has been on a rising trend since April 2006 reaching 19.3% in December 2006 and increasing further to 20. 5% in January 2007. Such a trend has been as a result of both the demand and supply side factors. The annual average inflation has also increased from 13.7% in December 2006 to 14.8% in January 2007.

In view of these developments and having identified the necessity of further tightening monetary policy in order to meet inflationary pressures and to realise monetary targets, the Monetary Board has decided to increase the CB's policy interest rates, viz. the Repurchase and Reverse Repurchase rates by 50 basis points each. Accordingly, the Repurchase rate and the Reverse Repurchase rate will be at 10.50% and 12% respectively with effect from February 23, 2007.

In addition, the CB will continue to conduct aggressive open market operations to maintain market liquidity at an appropriate level to meet pre-determined reserve money targets.   Further, in order to ensure that monetary and inflation targets are met, the CB has established a monitoring mechanism for key variables in the fiscal, external and monetary sectors.  This too will facilitate the identification of any deviations from the desired path enabling the relevant authorities to take necessary corrective measures at an early stage.

In addition to the measures taken by the CB so far, in early February 2007, the CB brought its concerns relating to rising inflation to the notice of the National Economic Council (NEC) chaired by the President.

 Arising from the decisions taken at the NEC meeting, Secretary to the President has issued instructions to the relevant ministries to take action as recommended by the CB to address the causes of rising inflation.

Accordingly, the Finance, Trade, Petroleum Resources, and Power and Energy Ministries are now due to implement certain policy initiatives to contain price levels, and the combined effect of the measures to be taken by these Ministries and others are expected to bring down inflation to the targeted level by end 2007, while not retarding the economic growth momentum.

The release of the next regular statement on monetary policy is scheduled for  March 16, 2007.

Two hedging price ranges for diesel

Standard Chartered Bank (SCB) structured and transacted the country's first oil hedge with the Ceylon Petroleum Corporation (CPC), said a statement.

CPC hedged their exposure to "gas oil" for a quantity of 150,000 barrels per month for a period of three months beginning from next month.

The structure gives CPC protection against rising prices within a predetermined range at zero cost, but with the ability to benefit from future floating price movements down to and from including the minimum floor strike price rate.

At a recent press conference to announce the hedging, CPC Chairman Asantha De Mel said, "This is an important step in efforts to maintain the price of petroleum products and minimise impact of escalating prices on the economy. It will also help us to be sure of our financial commitments in worse and best case scenarios. While this is our first oil hedge, we are looking to hedge other products including crude oil in the future."

He further added that if the currency doesn't change too drastically and the price of diesel does not sky rocket, the CPC will not need to raise oil prices. He also added that the CPC will be saving approximately $ 300,000 a month with the hedging.

Also speaking at the press conference was SCB Sri Lanka CEO Clive Haswell who said that SCB was delighted to structure the first commodity option in Sri Lanka.

"As a leading international bank with a long heritage and presence in Sri Lanka we are firmly committed to working with regulators and industry leaders to make Sri Lanka on par with the other big regional financial markets and in playing a pivotal role in contributing to the development of the economy." He also said that SCB was encouraging other companies to start hedging and that the losses of SCB due to the hedging will be made up by working closely with their global network.

SCB Sri Lanka's Global Markets head Rukshan Dias said that if the average cost of a barrel of gas oil is above USD 72 then SCB will pay USD 2 per barrel to CPC. If it's below USD 72 but higher than USD 70, then SCB will pay the difference between the average price and USD 70 to CPC. But if it's below USD 70 but higher than USD 67.50, there will be no cash flows and if it's below USD 67.50 then CPC will pay the difference between the average price and USD 67.50 to SCB.

Central Bank of Sri Lanka Assistant Governor Dr. H.N. Thenuwara said that the Central Bank is pleased to support the development of the local financial markets for which the introduction of innovative products is critical. He also said that the Central Bank is confident that oil hedging will significantly help reduce the cost of oil imports, thereby curbing inflation and helping in stabilizing the rupee.

SriLankan promotes eticketing

Celebrating their double daily services to Mumbai, SriLankan Airlines is inviting Sri Lankans to fly to Mumbai and have the chance to win their money back by booking flights through the internet, said a statement.

"We are giving a special fare for a return trip from Colombo to Mumbai. On top of this, there will be a daily winner during the course of the promotion and lucky passengers will get their money back!" said SriLankan's E-Commerce Manager Kapila Bandara.

Passengers can book with ease through the website in six easy steps and pay for their tickets by credit card through a secure payment gateway.

All they need to do is print out the ticket which would be e-mailed to them and bring it to the airport in order to check-in for the flight.

Bookings on the website can be made for a flight up to four hours before departure in the comfort of one's home or office.

Eubiq, ideal power protection system

By Kshanika Argent

Orange Electric (OE) has introduced to Sri Lanka the Orange power track from Eubiq System, an electrical power outlet system that is practical, versatile, safe and simply beautiful!

The complete range of The Eubiq System, a product from Singapore with three years warranty, joins a fleet of versatile and reliable Orange products, backed by the company's professional approach towards employing cutting edge technology in its manufacturing facilities, its commitment towards quality and continuous product innovations, making it synonymous with excellence.

The innovative Eubiq track allows flexibility of amperage and also has the flexibility of carrying data through the same track, turning power cord and data cable chaos into effortless control.

This new product has been in the market for the past few months and OE plans on making the product available in outlets depending on the response of its customers.

OE  Marketing Head Romaine Ferdinands and Product Manager Hasini Amarasinghe say that the product is an innovation in technology that has been designed for modern homes, offices, laboratories and hospitals and should allure customers once they become aware of the benefits of this Orange power track system from Eubiq. 

According to Ferdinands, the Eubiq System is a versatile system which allows you to add, remove and reposition power outlets anytime, anywhere, by just a simple twist.

 This architecturally versatile track(s) is designed for use on a wide range of applications - residential use in kitchens, living rooms and study rooms. It also has commercial use for system furniture, server rooms, display counters, test labs, as well as hospitals.

Amarasinghe said, "The beauty of this system is that it frees you from the hassle and limitations of the conventional plug points. The Eubiq System can be anywhere you want it to be and it's also safe. If you've got kids around the house, it's practically impossible for them to get hurt by electrocution even if they try sticking their fingers into it because all live parts are hidden!"

While the product looks complicated, installation is simple, use is even easier and safety is guaranteed.  The extensive range of tracks is designed for use in recessed and surface mounted applications. The unique modular concept in track design makes it possible for custom length. The minimum length of a Eubiq track is one foot, extending up to 3.6 metres   with alternative lengths of two feet, 1metre, 1.2 metres, 1.5 metres, etc.., however tracks can be extended to any length if required, through a simple mechanism. 

Amarasinghe explained that there are surface mounted tracks which are ideal as a solution for existing homes, offices, workshops, etc., and allows you to draw power from anywhere without breaking walls. Recessed mount tracks as a solution for integrating into furniture, panels, etc., with different colour laminates to match the background colour and customized tracks on request.

Apart from the tracks, there are specially designed plugs, code sets, lamps and sockets that go with the system.  Eubiq sockets are ultra modern and work exactly like a track with the safety feature. Eubiq adapters are also on offer and available for all major plug types and standards, they are durable and tested to comply with international safety  and quality standards such as IEC and PSB.     

The special Eubiq hospital bed head track incorporates all special features for electrical services and medical gases with two continuous multi access power lines for 220V and 110V. A flexible design solution that allows customize number of gas terminals and electrical components like the nurse call, switches and telephone outlets complete with room light, down light and accessories rail for hanging equipments.

 In addition to the track, individual power outlets are also available for use in areas such as corridors, store rooms and pillars.

Headquartered in Colombo, OE, a fully owned Sri Lankan company is primarily engaged in manufacturing quality switches and sockets and electrical accessories. OE, an ISO certified manufacturer, is also the industry leader, having established itself over the past three decades and enjoys well over 80% of the market share in the category.

The flagship brand of the company, Orange, enjoys market leadership and is distributed through a vast network of dealers and distributors and covers the entirety of the island. With strengths in manufacturing, distribution and engineering product development, OE is already established in the region with offices and distributors in over 12 countries spanning across South East Asia, Europe and the Middle East and is well on its way to realizing its vision of making OE a global  brand.

Sinhaputhra's deposit base passes Rs.  2 bn. mark

Sinhaputhra Finance Ltd. (SFL), has registered a public deposit base of Rs. 2,100 mn.. as at January 31, 2007, said a statement.

 This is another milestone in the history of Sinhaputhra. The company's deposit base comprises time and savings deposits, said SFL Joint Managing Director Ravana Wijeyeratne.

SFL is registered with the Central Bank's  (CB's)  Monetary Board and is authorized to mobilise deposits from the general public. 

Wijeyeratne said that Sinhaputhra is one of 28 CB registered finance companies that are  in operation and it is within the country's top  10 finance companies.

 He further said that the company's  total assets as at end January 31, 2007 stood at Rs. 3,500 mn.

Sinhaputhra's principal lines of business are mobilization of time and savings deposits, finance leasing, business loans, personal loans and  capital market operations.

  It also functions as a sub  agent for insurance and Western Union money transfers, according to  Wijeyeratne.

The company has its registered office at Hill Street, Kandy and it also operates from D.S. Senanayaka Vidiya, Kandy.

 The company's Colombo office is located at "Liberty Plaza." This office continues to assist  in the deposit mobilization process in Colombo.  AGM(Operations)  Saliya De Alwis said that the company's deposit base has increased from Rs. 1,538 mn.  as at  April 1, 2006, to reach Rs. 2,100 mn.,  a  36.5% growth for the ten month period ended  January 2007.

 He further said that the company has mobilized these deposits mainly from the Kandy District with Colombo making a reasonable contribution. 

The company will be focusing on strengthening its deposits further during 2006/2007 and the deposit base is expected to reach Rs. 2,500 mn.. by March 31, 2007, said. De Alwis. 

"We have identified unique strategies for the mobilisation of deposits and will focus our attention on the rural deposits to a considerable extent."

The company was authorised by the CB to accept savings deposits from the public.  The company which started on Sinhaputhra  savings accounts recently, now has more than 6,000 savings account holders from Kandy and Colombo.

 De Alwis said that the management will be taking steps to increase the savings  deposit base significantly during 2007 with the intention of mobilizing financial resources for investment.  He was confident that the company could achieve the planned results with the promotional programmes that are now in place.

Sinhaputhra today is playing a  dominant role in the finance company sector and is strengthening its operations  in  rural areas.

 The company has also spread its finance leasing operations to all provinces other than the North and the East. 

 Business and personal loans are being offered to customers mainly from the Central Province and Colombo. 

Sinhaputhra has a 28 year history and celebrated its twenty eighth anniversary on February 14, 2007.

Its Board comprises Kithsiri Wanigasekara, (Chairman and Managing Director), Ravana Wijeyeratne (Joint Managing Director), A.P.U. Keppetipola (Director / Legal Consultant), K.H.K. Wijayadasa, A.M.G. Weerakoon, Ms. Chintha Balalle, Dr. Cuda Wijeyeratne and Sarath Chandra Imbuldeniya.

Mobitel, CB in joint promo

Commercial Bank (CB) has signed up with Sri Lanka Telecom Mobitel (SLTM) to offer Mobitel customers a facility to instantly reload their phone balances simply by sending an SMS, said a statement.

Using CB's Com-e-Load (CeL) facility, Mobitel pre-paid and post-paid customers alike can now instantly top up their Pre-paid accounts or settle their monthly post-paid bills by logging on to CeL via the 'financial' menu on their phones and following a few simple steps.

Pre-paid customers can reload their Mobitel pre-paid account by any value between Rs. 100 to Rs. 999 while for post-paid customers, the bill settlement amount is unlimited. 

The re-loaded amount will be instantly debited from their accounts at CB. CeL is also available to CB's Dot Com and Dot Com Spin accountholders.

An added convenience provided by this facility is that it can be accessed viaa user friendly Over The Air (OTA) menu which is built into the customer's mobile SIM, which eliminates the hassle of remembering short codes.

CB Deputy General Manager - Operations Sanath Bandaranayake said that the Bank was committed to consistently offer new innovations and convenience enhancements to its customers. "Following the resounding success of CeL with other mobile operators, we have now launched this facility with Mobitel to benefit an even greater number of our customers," he said.

Also speaking at the event, SLTM Chief Executive Officer Suren J. Amarasekera mentioned: "Mobitelhas been making significant progress in raising its services to higher levels of customer convenience and I believe that this new alliance would help bring greater benefits to customers everyday life."

To reload their accounts or settle bills, customers have to scroll to the 'financial' menu on their Mobitel phones under which CB M-reload will be listed.

After selecting M Reload, all they need to do is to key in the reload or amount they need to settle and confirm the transaction. They will then receive a message on their phones confirming that their phone balances have been reloaded by the amounts entered.

SLTM-wholly owned by Sri Lanka Telecom, In January 2004 launched its full-fledged GSM network that is EDGE/GPRS enabled and designed to operate on dual bands. Investments committed to date in its 3G and GSM service offering is a total over US$200 million and is set to increase its present coverage of over 600 base stations to 1500 base stations by the year end.

CB operates a computer linked branch network of 150 branches and 269 ATMs which is among the highest in Sri Lanka and has been rated the 'Best Bank in Sri Lanka' for eight consecutive years by the US 'Global Finance' magazine and been named the 'Bank of the Year' in Sri Lanka for five years by the UK based 'The Banker' magazine. It also operates five branches and two booths in Bangladesh.

Special leasing pkg. for Canter trucks

United Motors Ltd (UML) recently joined hands with Hatton National Bank (HNB), one of the most successful commercial banks with over 156 customers centres  spread islandwide in promoting Mitsubishi Canter Trucks through a specially designed leasing package, said a statement.  The special promotion willl end in April.

HNB has taken leaps and bounds over the years to become the leader in the leasing industry.  Among the banks, HNB have been pioneers in the leasing industry, being the first private commercial bank in introduce leasing in 1991 and has grown steadily over the years.

Having tied up with UMLL, one of the pioneer vehicle importers, HNB will offer the customers great deals in Mitsubishi Canter Trucks.

"HNB for the past several years has done several promotions and were in a position to enhance the leasing business. We are happy to join hands with UMLL for this very special Canter Trucks leasing promotion," said HNB  Managing Director/CEO  Rajendra Theagarajah.

HNB Leasing has also been in the forefront when it comes to having great promotions all year long enabling customers to grab deals and offers that no other local leasing company provides at the moment.

HSBC, No. 1 globally

In an age that encourages change, speed in action and service and convenience, a new set of practices and values have begun to emerge, as the old ones gradually fade away. But one that does not fade is to encourage Sri Lanka to have a strong savings culture, said a statement.

 HSBC is well-placed here because it is a bank with a 114 year history in Sri Lanka and this is coupled with its strong international presence, rapidly expanding global network and reputation for offering safe and secure banking facilities worldwide.

A good savings ethos is important for several reasons - savings can be used for profitable and secure investment opportunities, for short-term, high-risk investment and for emergency spending. Not only does HSBC offer its customers competitive interest rates, but also maintains focus on providing a wide range of value-added services and unmatched global opportunities, in an effort to offer increasingly convenient and rewarding options for customers to manage their finances.

The value-added services include free life insurance cover, a global concierge service, worldwide travel and emergency services. HSBC has designed a range of additional services, including the convenience-oriented Internet Banking facilities and Bill Payment via Internet Banking, Day and Night Banking Centres, EasyPay machines and balance confirmation via SMS.

 This list of features means that customers have a wide range of options available from the list of packaged services and can pick the ones they need in order to suit their own needs.

In addition, there is the element of added security offered by HSBC because of its strong focus on the safety of its systems and procedures. HSBC is the only bank in Sri Lanka to have introduced the security token which generates single-use passwords at the click of a button - making internet banking an increasingly safer option.

 Confirming the importance of these initiatives, HSBC won Global Finance's awards in 2006 for "Best Consumer Internet Bank in Sri Lanka" and regionally for "Best Website Design" and "Best Information Security Initiatives."

Many of the services offered by HSBC in Sri Lanka, are available in the bank's 9,500 offices in 81 countries and territories worldwide. HSBC is truly 'the world's local bank,' with a comparably strong presence in North and South America, Europe and Asia-Pacific. The bank had assets of USD1,738 billion as at June 30, 2006, and has overtaken Citigroup as the world's largest banking and financial services organisation.

HSBC's expansive global network makes banking even more convenient for the frequent traveller or international businessperson.

Supplement

Insuarnce in Sri Lanka