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Advocata Institute welcomes SL’s decision to resume stalled project to develop East Container Terminal

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Open and Competitive Bidding must be the way forward

COLOMBO, Sri Lanka— 

As reported in numerous media sources, a leading Indian consortium is the front runner to develop the stalled East Container Terminal (ECT) in the Colombo Port.

An agreement was reached during the tenure of the former government to develop the ECT in collaboration with the governments of India and Japan. However, the progress of the terminal development was stalled due to various reasons. 

The Advocata Institute welcomes the decision of the administration to resume the stalled project. The significance of the Colombo Port is driven by its large volumes of transhipment to India, which now accounts for about 70% of the total quantity of shipments. It is beneficial that both countries continue to strengthen this relationship through trade and economic partnerships. 

However, we would like to provide input on two main policy areas surrounding this project, in order for policymakers and the public to evaluate the efficacy of the upcoming arrangement. 

Accountability through Competitive Bidding 

The key concern of the Government when entering any kind of public-private partnership such as the container terminal development process should be to ensure that it will produce value for money. The commercial partner selected should be the most capable of producing this outcome. An open tender process would allow for a more efficient allocation of resources by using competitive pricing as a tool to reflect real market sentiments and allowing better utilization of resources.  

 

Tax concessions 

The ECT provides an unique competitive advantage for the operator. The risk in this investment is relatively low, given that the port is already established. The Southport (deepwater port) is well known and has been in existence for 6-7 years. The port is also strategically located with only a 4-hour deviation from the major east-west shipping route. Additionally, its competitor, the CICT terminal is running close to capacity.

Finally, there is a very limited employment multiplier effect that this project can create. The private returns are significantly higher than the cost of capital factoring in-country and project risk.  Taken together and based on the publicly available information, the case for tax holidays on this project is weak.

Further consideration must also be placed on the precarious fiscal situation that the country is presently in and the need to mobilise more tax revenue.

The Advocata Institute calls upon the government to strengthen oversight and accountability through an open tender process. We believe that such a policy direction would be more conducive to reaching the administration’s vision of a more productive and prosperous Sri Lanka. (Advocata Press Release)



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Cabraal: Prez appoints members to Port City Economic Commission

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By Shyam Nuwan Ganewatta

The President of the country would always appoint members to the Colombo Port City Economic Commission, entrusted with running of that city under the proposed CPCEC Bill, State Minister of Money & Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal, yesterday, told the media, in Colombo.

State Minister Cabraal said that most critics of the Colombo Port City Economic Commission Bill had not even read it.

“Sri Lankans don’t need to obtain a visa to enter the Port City as some claim. The Port City will be administered by the Colombo Port City Economic Commission and the Bill we have presented details how the area will be governed,” Cabraal said responding to a question posed by a journalist.

The State Minister said that President Gotabaya Rajapaksa had asked him to counter the misinformation and fake news that was being spread about the Bill. Once people have read and understood the Bill, most who criticise it would have to change their tune, the Minister said.

 

Journalists also questioned the State Minister on the allegations levelled by MP Wijeyadasa Rajapakse. The State Minister said that Rajapakse had not even asked a question about the Bill during the Parliamentary Group meetings.

“As I said earlier, the Port City will be administered by Colombo Port City Economic Commission. All members are appointed by the President. The Chairman of the Commission too is appointed by the President. The President can get rid of them anytime he wants,” Cabraal said.

The State Minister added that no one would be allowed to withdraw money or assets from Sri Lanka and invest in the Port City. “This is a special economic zone. We need to attract foreign direct investments. We need to have ease of doing business in this zone and we have to make it an important financial hub in the region.”

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Two hotels to be built obstructing elephant corridor in Sinharaja – MONLAR

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Forest land being cleared for the construction of a hotel

By Rathindra Kuruwita

The Bowitiyatenna elephant corridor, used by elephants in Sinharaja to travel to Dellawa – Walankanda forest had been obstructed by two businessmen by clearing a section of the forest to build hotels, Sajeeewa Chamikara of the Movement for Land and Agricultural Reform (MONLAR) said.

“One hotel is being constructed in the Dolekanda Grama Niladari area after clearing seven acres of forest land. The Kalawana Divisional Secretariat has approved the construction of the hotel ignoring environmental regulations. Right now, forests are being cleared, land is being prepared and buildings are being constructed using heavy equipment.”

Another hotel was being built at the Bowitiyatenna Elephant Corridor, situated in Godakawela Divisional Secretariat area by a businessman from Godakawela. He has cleared around eight acres of forest land, the environmentalist said.

The two hotels were obstructing the elephant corridors used by the remaining two elephants in the Sinharaja Forest Reserve. Now, the the people of Rambuka, Thanawela, Ellagama, Handiyekade, Kajugaswatte, Pothupitiya, Kopikella and Cypresswatte would have the elephans marauding their villages, the environmentalist said, adding that the residents of those villages would lose property and lives due to the hotels being constructed by obstructing the elephant corridors.

“Most of the forest areas surrounding the Sinharaja are to be annexed to the Forest Reserve because they are an important part of the forest network. These unscrupulous businessmen and politicians supporting them are attempting to carve out as much land as possible before these areas receive protected status. They are also doing their best to delay the declaration of these lands as protected areas.”

Chamikara said that the Central Environmental Authority (CEA) had the power to take action against those who carried out such illegal activities.

According to Section 23 (a.) (a.) of the National Environmental Act, when a project is carried out without environmental clearance, the CEA can produce such people before a magistrate’s court. If found guilty, a person can be fined up to Rs. 15,000 or imprisoned up to two years or subjected to both.

Chamikara said: “According to Article 27(14) of Chapter VI of the Sri Lankan constitution the state shall protect, preserve and improve the environment for the benefit of the community.” However, the CEA seems to have no interest in taking action against those who are building these hotels illegally. This is CEA’s attitude to almost all major environmental destruction that seems to be taking place these days.

“The government is silent when the Sinharaja forest is degraded and elephant corridors are closed by businessmen. The right to land seems to be a right reserved only for businessmen. We have the right to oppose these under article 28. (f) of the Constitution which states that we have a fundamental duty ‘to protect nature and conserve its riches.’ Article 28. (e) states that we also have a fundamental duty ‘to respect the rights and freedoms of others.’ Thus, we, the citizens have the right to oppose the illegal use of natural resources by powerful businessmen. If we do not oppose these moves as citizens, powerful businessmen will take over all our natural assets like they are doing at Sinharaja.”

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RDHS predicts Coronavirus spike in Jaffna over the weekend

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By Dinasena Ratugamage

There might be a spike in COVID-19 cases in Jaffna this weekend, A.

Kethiswaran, Regional Director Health Services told the media yesterday. Dr. Kethiswaran made the prediction after 26 new cases were detected in Jaffna.

A large number of COVID-19 cases had been reported from Jaffna in the past few weeks. Thus, the people should adhere to health guidelines. If people did not follow the guidelines, there would be a spike in cases and then some places would have to be locked down, he said.

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