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NPP’s Strategy: Securing better deal with IMF, but no exit – AKD
By Rathindra Kuruwita
The National People’s Power (NPP) intended to secure a better deal with the International Monetary Fund (IMF) regarding the debt sustainability analyses (DSAs). However, if the renegotiation process dragged on or proved costly, the party would adhere to the existing DSA, NPP presidential candidate Anura Kumara Dissanayake said on Monday (16) during an Ada Derana political programme.
Dissanayake highlighted three salient points the NPP was planning to address. The first concern was increasing spending on social welfare. The IMF had set several parameters for Sri Lanka to achieve such as raising tax revenue to 15 percent of GDP, maintaining a primary surplus of 2.3 percent of GDP from 2025, and reducing the public debt-to-GDP ratio to below 95 percent by 2032.
“We are not opposed to economic targets,” Dissanayake said. “But while striving to meet these objectives, our small and medium enterprises collapsed, and living standards declined. We must consider the social impact of pursuing economic goals. We need to engage the IMF about social spending.”
He emphasised that only the NPP had openly declared that participation in rallies or canvassing for the party did not qualify one for government jobs or state subsidies. “We can say this because those working with us are motivated by social objectives rather than personal gain. When I mentioned tax cuts, many asked, ‘Can we afford this?’
People are no longer seeking subsidies; they want meaningful change,” he added.
The second issue the NPP seeks to discuss with the IMF, according to Dissanayake, is the proposed mechanisms to combat bribery and corruption. “We want to explain that laws and mechanisms alone are insufficient. Practical measures are needed to enforce these regulations, and we will require IMF assistance for that,” Dissanayake noted.
The NPP intended to negotiate with the IMF debt optimisation, questioning whether reducing the public debt-to-GDP ratio to below 95 percent by 2032 is an ideal target. “In Greece, this figure was adjusted after discussions with the IMF, and it’s crucial as debt restructuring negotiations rely on it. These are the three areas we are planning to discuss with the IMF,” he said.
Dissanayake also remarked that the DSA was formulated with inputs from Sri Lanka and questioned the accuracy of those contributions. He mentioned that Sri Lanka had already conducted negotiations with bilateral and commercial creditors based on the current DSA, setting the projected debt-to-GDP ratio at 95 percent by 2032. Agreements have been made with the Paris Club and Exim Bank.
“Some people wonder whether we would have to start from scratch if an alternative DSA is negotiated. We have an agreement on the policy framework with bilateral creditors, though not a final one. We believe there’s still room for quick negotiation, as there’s no final deal with ISB holders either,” Dissanayake explained.
He stressed that the IMF was concerned not only with Sri Lanka meeting set targets but also with achieving overall debt sustainability. “We are not coming into power to destabilise the country, but to develop it. If renegotiations with the IMF take too long and agreements fall through, we may have to stick to the current programme. Our approach is to work with the IMF to secure a better deal, not to withdraw from it,” he clarified.
The NPP will have to govern a country that had entered into an agreement with the IMF, Dissanayake said, adding that there are no alternative routes for debt restructuring. “We have put all our eggs in the IMF basket, and discarding it would be irresponsible. We must try, and I believe we can renegotiate. However, if the costs and time required are too high, we will stick with the current programme,” he stated.
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President proposes; Speaker disposes
AKD’s request to Harsha:
Speaker Dr. Jagath Wickramaratne has frustrated an attempt by Chairman of the Committee on Public Finance (CoPF) Dr. Harsha de Silva, MP, to intervene to settle the continuing dispute over the appointment of a new Auditor General.
Dr. De Silva yesterday told The Island he had recently written to all members of the Constitutional Council (CC) drawing their attention to the urgent need to address the issue at hand. The AG’s position remains vacant since 08 Dec, 2025. AG W.P.C. Wickremanayake retired in April and since then there have been a couple of Acting appointments. The CC has declined to endorse any of President Dissanayake’s nominees as the AG.
Asked whether he had taken up the issue with the CC following President Anura Kumara Dissanayake soliciting his support in this regard, MP de Silva said that he had written to CC members as agreed with the President.
The former UNPer and one-time State Minister said: “I did so, giving due respect to CC’s independence, underscoring the critical importance in them working with the President to resolve the crisis. I alluded to the need to have transparency in public financial management during this post-cyclone period where large amounts of funds are being transacted on multiple fronts, both domestic and foreign.”
Responding to another query, Dr. De Silva emphasised that he had clarified that the President must send the names of qualified and experienced persons to the CC for consideration. “However, these letters were returned to me by the Speaker, without being delivered to members of the CC. The Speaker didn’t give an explanation. Thus, except for members who are MPs who had been copied via email by my committee office, others never received my letter of concern. Even though I questioned, in Parliament, the basis of his refusal to forward my communication to the members of the CC of which he is Chairman, no answer was given.”
The CC consists of Dr. Jagath Wickramaratne, Speaker and Chairman of the 10-member body. Dr. Harini Amarasuriya, Prime Minister, Sajith Premadasa, Leader of the Opposition, Bimal Rathnayake, Aboobucker Athambawa, Ajith P. Perera, Sivagnanam Shritharan, and three civil society members namely Dr. Prathap Ramanujam, Dr. Dilkushi Anula Wijesundere and Dr. Dinesha Samararatne. None of the President’s nominees could obtain CC’s approval as all of them were rejected by the CC.
The present CC was introduced by the 21st Amendment to the Constitution which was endorsed on 31 October 2022.
Both the Bar Association of Sri Lanka (BASL) and the Transparency International Sri Lanka Chapter recently requested President Dissanayake, in writing, to propose a suitable person to the post of AG. The BASL, in another statement that dealt with the forthcoming vacancies in the CC due to three civil society members completing their terms, declared its concern over possible attempts by the President and the NPP government to fill the vacancies with rubber stamps.
The three civil society members will complete their terms on 18 January. In terms of Article 41E of the Constitution, the CC meets at least twice every month, and may meet as often as may be necessary. The Chairman presides at all meetings of the CC and in the absence of the Chairman, the Prime Minister, and in the absence of the Prime Minister, the Leader of the Opposition presides at the meetings of the CC.
Asked whether the CC could be disrupted due to the end of civil society members’ terms, an authoritative official pointed out that in case new appointments were not made the current members could continue.
The Parliament has not so far called for applications to fill the forthcoming vacancies.
by Shamindra Ferdinando ✍️
News
Sri Lanka loses Rs.7.5 bn due to coal tender irregularities: FSP
The NPP government’s coal procurement process has once again come under scrutiny following allegations by the Frontline Socialist Party (FSP) that substandard coal has been imported for power generation and that tender procedures were manipulated to favour a specific supplier.
Addressing the media after a party meeting in Maharagama on Saturday, FSP Education Secretary Pubudu Jagoda said a test report issued by the government laboratory at the Lakvijaya Power Plant had confirmed that the latest coal shipment unloaded in Sri Lanka did not meet the required quality standards. According to the report, the coal’s calorific value ranged between 5,600 and 5,800 kilocalories per kilo, below the 5,900–6,200 kCal/kg range specified in tender requirements.
Jagoda warned that lower calorific value coal would require higher volumes to generate the same amount of electricity, increasing costs significantly. Preliminary estimates, he said, indicated an additional financial burden of around Rs. 7,500 million, which might eventually be passed on to consumers through higher electricity tariffs.
The FSP also accused the government of tailoring procurement rules to benefit the Indian supplier, which has deposited bonds for long-term coal supply for the upcoming season. Jagoda alleged that tender conditions had been altered to accommodate the company, pointing to changes in coal reserve requirements. Under the 2021 Sri Lanka Coal Registration Document, suppliers were required to maintain a minimum reserve of one million metric tonnes with a gross calorific value of 5,900 kCal/kg. This threshold, he said, had been reduced to 100,000 metric tonnes in the 2025 document which is a 90% reduction raising serious concerns.
He further cited past allegations against the Indian company, including findings in a 2016 Auditor General’s report that the company violated procurement guidelines regarding a rice supply contract with Sathosa in 2014. Jagoda also referred to legal issues involving individuals linked to the company, and the suspension of a representative by the International Cricket Council in 2019 over match-fixing allegations.
Beyond company-specific concerns, Jagoda criticised what he described as systemic manipulation of the coal tender process. He questioned why the coal tender, typically called in February or March, was delayed until July, despite electricity being declared an essential service. He also alleged that the tender submission period had been progressively shortened from the internationally accepted six weeks to five weeks, and now reportedly to three giving an unfair advantage to suppliers with existing stock.
The Ministry of Energy has recently issued an amended tender to procure 4.5 million metric tonnes of coal for the Lanka Coal Company for the 2025/26 and 2026/27 periods, following the cancellation of an earlier tender.
Jagoda warned that delays and irregularities could lead to coal shortages, higher spot market purchases, increased electricity costs, and even power cuts if hydropower generation falls short. He called for urgent investigations into the procurement process, insisting that the burden of alleged mismanagement and corruption must not be transferred to the public.
by Chaminda Silva ✍️
News
CID summons SJB MP for criticising education reforms
SJB Gampaha District MP Prasad Siriwardhana has been summoned to the CID today (12) for questioning in connection with a statement he made on a private television channel regarding education reforms.
He was earlier asked to report to the CID on 10 January to make a statement. However, as Siriwardhana had notified the authorities that he was unable to appear on that day, he was subsequently asked to come today.
Siriwardhana is one of the critics of the shortcomings of the education reforms introduced by the NPP government.
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