News
Governance issues, etc., will have to be sorted out to avert further debt restructuring: Verité Research
By Rathindra Kuruwita
Unless Sri Lanka addressed its governance issues, the country would have to restructure its debt again like most countries that had unsustainable levels of corruption, Executive Director of Verité Research Nishan de Mel said in a recent televised interview.
Dr. De Mel said that as the government had decided to pay the Employees’ Provident Fund (EPF) only 9% for its investment until 2038 instead of the average Treasury bond interest rate of 13.5 percent, it would lose 12 trillion rupees.De Mel also said that Domestic Debt Optimization (DDO) was a phrase that the Sri Lankan government coined.
“Domestic debt restructuring usually means making credit owners take a loss for the benefit of the government. The word commonly used for this is restructuring, optimisation is a word that we have come up with,” he said.
De Mel said that the government’s proposal was to reduce the interest paid on the money at EPF and other such funds to 9.1 percent until 2038. However, the average interest paid for Treasury bonds over recent years was 13.5 percent, which is almost 50 percent more than the proposed interest for EPF, he said.
“We know the interest rates for Treasury Bonds because the government has released information about the interest rates of bonds issued because foreign creditors have been asking for transparency. By the end of 31 May this year, the average interest rate given to bondholders was 13.5 percent,” he said.
There had been years when interest rates for Treasury bills were below 9.1 percent. However, it was unlikely that the interest rates offered on Treasury bills would fall below 9.1 percent, he said. Sri Lanka was going through an uncertain time and governments could only lure people into buying bonds by offering attractive interest rates, de Mel added.
“We still can’t borrow from bond markets. So, the government will offer higher interest rates when it borrows from the domestic market. During the past two years, the government has paid about 30 percent interest to borrow from the domestic market. It is unlikely that interest rates for bonds will be less than 13.5 percent in the future,” he said.
De Mel said that at present there are 3.4 trillion rupees at the EPF, and it will reach about 25 trillion by 2038 at 13.5 percent interest. However, EPF funds would only grow to 13 trillion at 9.1 percent interest.
“That’s 12 trillion rupees less at 9.1 percent,” he said.
The Central Bank had a Monetary Board taking decisions on the EPF and there was a conflict of interest as CBSL was also entrusted with restructuring debt, de Mel said.
“A lot of people ask me why I am using 13.5 percent to calculate the losses. They tell me that the EPF already receives less than 13.5 percent in interest. The EPF is late in producing annual reports. The last available report was for 2020. The Central Bank produces its annual reports every year, but the EPF reports are delayed. There are many allegations about what happened. If someone tells me that EPF receives lower interest rates than the market rate for treasury bonds, that is another serious problem. All private sector employees are compelled to be a member of the EPF, so why are EPF beneficiaries receiving less than market rates?” he asked.
There are several pension funds, and CBSL workers have a special pension fund. De Mel said he was not aware if that pension fund, too, had been restructured.Although the parliament had approved a resolution on the domestic debt restructuring, the government could not change the interest rates given to EPF without changing some laws, he said.
“The laws governing the EPF say that the Central Bank must publish all investments it makes with EPF money. However, when we look at EPF’s financial statements, they have misinterpreted the above clause. Instead of listing out every investment, they are listing out every type of investment. This way, people can’t figure out what’s going on,” he said.
Those who are EPF beneficiaries will lose about 70 percent of the real value of their money because of inflation and the lower market rate of interest. However, foreign investors are only getting a 30 percent loss, he said.
“This is unequal treatment. There are two factors needed for sustainable domestic debt restructuring. One is that foreign creditors must take a deep haircut—over 50 percent. Secondly, the governance issues in a country must be addressed. Most countries have to restructure their debt more than once. And these countries have serious governance issues. So, to attain sustainability, we need foreign creditors to get a deeper haircut and we have to address our serious governance issues,.”
Latest News
Level III landslide early warnings issued to the Districts of Kandy, Kegalle, Kurunegala and Matale extended till 1600 hrs on Tuesday [09]
The Level III RED landslide warnings issued to the districts of Kandy, Kegalle, Kurunegala and Matale by the landslide early warning center of the National Building Research Organisation [NBRO] have been extended till 1600 hrs on 09th December 2025.
Accordingly,
The LEVEL III RED warnings issued to the Divisional Secretaries Divisions and surrounding areas of Hatharaliyadda, Yatinuwara, Ududumbara, Pathahewaheta, Medadumbara, Pasbage Korale, Deltota, Poojapitiya, Ganga Ihala Korale, Panvila, Gangawata Korale, Udapalatha, Harispattuwa, Kundasale, Minipe, Doluwa, Thumpane, Akurana, Udunuwara and Pathadumbara in the Kandy district, Kegalle, Galigamuwa, Mawanella, Bulathkohupitiya, Aranayaka, Yatiyanthota, Rambukkana and Warakapola in the Kegalle district, Mawathagama, Mallawapitiya and Rideegama in the Kurunegala district, and Naula, Wilgamuwa, Pallepola, Ambanganga Korale, Laggala Pallegama, Ukuwela, Rattota, Matale and Yatawatta in the Matale district have been extended.
In the meantime,
LEVEL II AMBER warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Meegahakivula, Badulla, Kandeketiya, Bandarawela, Soranathota, Hali_Ela, Ella, Lunugala, Welimada, Haputhale, Passara and Haldummulla in the Badulla district, Dehiowita, Ruwanwella and Deraniyagala in the Kegalle district, Alawwa and Polgahawela in the Kurunegala district, Ambagamuwa Korale, Hanguranketha, Mathurata, Norwood, Kothmale West, Nuwara Eliya, Thalawakele, Nildandahinna, Walapane and Kothmale East in the Nuwara Eliya district, and Kahawatta, Godakawela and Kolonne in the Ratnapura district.
LEVEL I YELLOW warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Yakkalamulla and Elpitiya in the Galle district, Attanagalla, Mirigama and Divulapitiya in the Gampaha district, Narammala in the Kurunegala district, and Eheliyagoda, Opanayake, Kalawana, Imbulpe, Kaltota, Kiriella, Kuruwita, Nivithigala, Ayagama, Pelmadulla, Balangoda, Elapatha and Ratnapura in the Ratnapura district
A special District Coordinating Committee meeting, convened to review the damage caused to the agricultural sector in the Nuwara Eliya District due to Cyclone Ditwah and to discuss the urgent measures required, was held this morning (08) at the Nuwara Eliya District Secretariat. The meeting was chaired by President Anura Kumara Dissanayake, with the participation of the relevant responsible officials.
Due to adverse weather conditions, 1,421 hectares of vegetable cultivation in the Nuwara Eliya District has been damaged. President Anura Kumara Dissanayake instructed the relevant officials to take the necessary measures to provide compensation to farmers without delay.
Officials stated that although there has been crop damage, the reduction in the vegetable harvest in the Nuwara Eliya District would be around 25%. They added that Nuwara Eliya district would be able to meet the daily demand, but a decrease in the daily demand has been observed.
Officials further pointed out to the President that the reason for this decline is the spread of false information claiming a vegetable shortage in the Nuwara Eliya District and that prices have excessively increased.
News
Jetstar to launch Australia’s only low-cost direct flights to Sri Lanka, with fares from just $315^
It has been announced that Jetstar will take off for the first time from Australia to Sri Lanka in August next year, with the launch of the only direct low-cost service from Melbourne to the South Asian nation’s capital, Colombo.
From 25 August 2026, Jetstar will become the first Australian airline to operate this route, flying three times a week between Melbourne and Colombo and offering more than 100,000 low-fare seats a year on the new route.
Upgraded aircraft
This year-round service will be operated by Jetstar’s fleet of 11 widebody Boeing 787 Dreamliners which are progressively being upgraded from early next year to overhaul both the economy and business class cabins*.
The interior refit includes more than doubling the number of business class seats and installing Wi-Fi so customers can stream entertainment to their own devices.
The addition of a new lie-flat crew rest area to allow flights of up to 16 hours will open the door to even more incredible long-haul destinations in the future. The first of the upgraded aircraft is due to touchdown in Melbourne in late March 2026.
Sale fares
The countdown is on to these new flights going on sale at midday today (8 December).
At that time, Jetstar will launch a 24-hour Route Launch Sale with one-way fares available between Melbourne (Tullamarine) and Colombo from only $315^ at jetstar.com.
Jetstar’s growth
The launch of Melbourne to Colombo flights comes during one of the most exciting growth periods in Jetstar’s almost 22-year history.
Over the past two years, the airline has announced 26 new routes and welcomed 13 new aircraft, allowing travellers to take off more, for less.
2025 has been a standout year, with 14 new routes announced – nine of them international – with more exciting growth plans in coming years.
This year the Melbourne based carrier is also celebrating 10 years of operating domestically from Melbourne’s T4, having carried more than 50 million customers through the terminal.
Holiday peak travel
The new route announcement comes as Jetstar prepares for its biggest Christmas ever.
Jetstar is forecast to carry a record of almost six million passengers across its Australian, New Zealand, Japan and international network throughout December and January.
This includes a record 1.7 million passengers flying through Melbourne alone across the summer peak.
Jetstar CEO Stephanie Tully said the airline’s Melbourne to Colombo route will give Australians a new direct and affordable way to take off more to Sri Lanka.
“Colombo is an incredible destination, and from August next year, we’re excited to be making it easier for Aussies to experience everything the beautiful country of Sri Lanka has to offer.
“This new route out of our home base of Melbourne is part of a huge growth phase for Jetstar. We’ve added new destinations, more aircraft and we’re continuing to expand our international network to give travellers even more choice and opportunities to take off for less.”
Melbourne Airport Chief Executive Officer, Lorie Argus, welcomed Jetstar’s new flights to Sri Lanka as the airport and airline celebrate 10 years since the opening of Terminal 4.
“We’re thrilled to see Sri Lanka, one of the region’s fastest-growing destinations, become Jetstar’s 10th international destination from Melbourne.
“More Jetstar flights mean more legendary low fares – making it easier than ever for Victorians to explore this part of the world for leisure or to visit family and relatives.
“We’re marking a major milestone as we celebrate a decade since Jetstar moved into its home at Terminal 4 and it’s fantastic to see how our partnership has strengthened. A decade on, we’re proud to be Jetstar’s largest hub.”
Flight schedules
From 25 August 2026**
| Flight | Frequency | Depart | Arrive |
| JQ5
Melbourne – Colombo |
Tuesday, Thursday and Saturday | 12:00 | 17:50 |
| JQ6
Colombo – Melbourne |
Tuesday, Thursday and Saturday | 19:50 | 10:00+1 |
**Schedule valid for 25 August – 03 Oct 2026, other periods vary based on daylight savings.
*As the upgraded 787 are progressively rolled out, some flights will operate with upgraded aircraft and others with our existing 787 aircraft.
^Sale ends 12.00pm AEDT Tuesday 9 December 2025, unless sold out. Excludes checked bags. Prices based on payment by PayID, Jetstar voucher, Jetstar Gift Card, or bookings redeemed only in Qantas Points through jetstar.com. For other options, a Payment Fee applies. See jetstar.com/fees. Travel dates and other conditions apply. Flights from Melbourne (Tullamarine) to Colombo are subject to Government and Regulatory approval.
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Level III landslide early warnings issued to the Districts of Kandy, Kegalle, Kurunegala and Matale extended till 1600 hrs on Tuesday [09]
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