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Crisis cannot be tackled by fuel price increases alone: SJB prescribes IMF



By Shamindra Ferdinando 

Samagi Jana Balavegaya (SJB) spokesperson Dr. Harsha de Silva, MP, yesterday (21) called for immediate remedial measures in the wake of Energy Minister Udaya Gammanpila’s shocking admission that the national economy was in such a bad shape it found it difficult to pay for oil imports. 

 Former UNP non-Cabinet minister de Silva said that there had not been a previous instance of a minister expressing fears of collapse of the banking system under their watch unless corrective measures were taken. The Colombo District MP recommended the government to seriously consider seeking IMF’s assistance before the situation further deteriorated . 

Noting that both the Energy Minister and the Presidential Secretariat declared that state banks could be overwhelmed by staggering Rs 737 bn loans owed by the Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB), MP de Silva emphasised that the monetary crisis could not be addressed by increasing fuel prices alone. 

COPE member MP de Silva appreciated Attorney-at-law Gammanpila for being frank in his assessment. The SJB MP explained ways and means of addressing the issues at hand when The Island asked whether the Parliament as an institution should adopt a common stand on national economy and take tangible remedial measures? 

The Island also sought the MP’s suggestions on  stabilising the economy. 

Economist de Silva said that Minister Gammanpila is on record as having said that the Central Bank in a letter dated May 31, 2021 warned the Finance Ministry of dire consequences unless remedial measures were taken. 

MP de Silva said that State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal in a recent interview with Irida Lankadeepa confirmed Minister Gammanpila’s statement. However, it would be a grave mistake on the part of the government to believe such an extremely serious situation could be tackled by increasing fuel prices. 

The former Policy Planning Deputy Minister said the issue at hand is so serious, it could not be fixed by just increasing fuel prices. “A macro prudential analysis must be undertaken by the Central Bank without further delay. The systemic risks must be identified and assessed. The vulnerability of the banking system must be immediately addressed beyond the mere inability of the CPC to make good on their payments,” MP de Silva said. 

MP de Silva underscored the desperate situation the state banks were experiencing. The MP said that state banks were entering into dollar swaps at massive discounts. For instance, buying dollars today at Rs 199.99 with settlement in a year at Rs 181.99. “Consider the risk these state banks are running. Can they get dollars at Rs 181.99 in a year’s time or will the dollar cost Rs 210 or even higher? Whose money is at risk? Another glaring example is the plan to borrow USD 1 billion from ‘unsolicited’ bidders. This is unbelievable. Are we going to integrate our banking system with money laundering operators to allow them to clean black money? What will happen to our credibility in the longer run? These are all serious matters that need immediate attention.” 

Responding to another query, MP de Silva asserted that the best option available to the SLPP government was to restructure the country’s debt. “If we, do it now, we should be able to come out of the crisis with only a re-profiling exercise, meaning a delay in our payments to the bond holders instead of asking them to take a haircut, meaning to agree to a reduction in principle,” he said. 

The SJB heavyweight asked would working with the IMF acceptable than seeking deals with those hoping to clean their dirty money. The current crisis should be tackled by working with the IMF whatever the political agenda the SLPP hoped to pursue, the government had no option but to seek IMF assistance or face a catastrophe. MP de Silva said that he suggested six months ago that Sri Lanka had no option but to undertake a restructuring process with the IMF. Although the government had ignored warnings and declared it would never go to the IMF, the crisis triggered by the fuel price hike exposed the government. “Unfortunately for the people of Sri Lanka the more these people continue this delay in restructuring the greater the pain will be when it finally is thrust upon us. We need a soft landing. Not a hard landing,” Dr. de Silva said. 

 The former minister said that this would be raised in parliament. Referring to a media briefing called by Minister Gammanpila early this month whereas announced plans for a new oil refinery at Sapugaskanda, MP de Silva said that the PHU leader said that cash-strapped debt-ridden government lacked the wherewithal to make an investment therefore needed external financing amounting to USD 3 bn. The former Minister said that Minister Bandula Gunawardena and State Minister Dr. Nalaka Godahewa, too, acknowledged the severe financial difficulties with the latter explaining how the raging Covid-19 pandemic worsened the situation.

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Police detain Bathiudeen’s wife, father-in-law and another suspect over domestic aide’s death



Former Minister Rishad Bathiudeen’s wife, father-in-law and another suspect have been detained for interrogation in connection with the death of the 16-year old domestic aide.

“They are being held for 72 hours for further questioning”, police said.

The suspects taken into custody were identified by police as that 46-year old Sheyabdeen Ayesha, her father  70-year-old Mohammed Sheyabdeen and the broker who brought the girl to work as a domestic aide in Bathiudeen’s house.

The victim, a resident of Dayagama Estate off Talawakelle, was admitted to the Colombo National Hospital on July 3 with severe burn injuries. She died on July 15.

Police have already recorded the statements of more than 20 persons in connection with the girl’s death.

Police have also questioned two women aged 22 and 32 from the Dayagama area, who earlier served as domestic workers at the former Minister’s house.

One of the women had claimed she was sexually harassed by Bathiudeen’s brother-in-law from 2015 to 2019 at the former Minister’s residence in Colombo.

Subsequently, police also arrested the 44-year old Sheyabdeen Ismadeen, brother-in-law of the former Minister.

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Contamination fears propel Lanka Sathosa to recall Chinese-made canned fish stocks



After procurement from Colombo port for Rs. 50mn

by Suresh Perera

A substantial stock of “confiscated” canned fish Lanka Sathosa procured from the Colombo port at a cost of around Rs. 50 million has been recalled from the market following public complaints that the Chinese-manufactured products were unfit for human consumption.

The five 20-foot container loads of 425g ‘Kitchen King’ Mackerel canned fish of the Scomber japonicus species, which were lying in the Colombo port as “abandoned cargo” after forfeiture by the Customs in October last year, was purchased by Lanka Sathosa recently to be sold at a concessionary price through its chain of supermarkets.

“We have now withdrawn the whole stock from our supermarket shelves as there were customer complaints that the canned fish was not fit for consumption”, says Lanka Sathosa Chairman, Rear Admiral (Retd) Ananda Peiris.

The products were injected into the market after clearance by the Food Control Unit of the Health Ministry following quality testing by the Sri Lanka Standards Institution (SLSI), he said.

“As there’s a shortage of canned fish in the marketplace, we promptly distributed the stocks to our supermarkets island-wide to be sold at Rs. 290 each. We have now asked the outlets not to sell them to customers because of the quality issue that has emerged”, the Chairman noted.

“We have no option now other than to return the consignment and seek a refund from the Ports Authority”, he said.

Onions, potatoes, lentils and other food commodities, which are either confiscated by the Customs or remain uncleared by importers, are generally procured by Lanka Sathosa to be sold at concessionary prices to customers, Peiris explained.

“In terms of a Cabinet decision, the consignments are auctioned only if we don’t procure them”.

The stock of canned fish had been forfeited as the owner had not cleared it for three months, he said.

“Lanka Sathosa appears to have opened a can of worms as the 9,200 packs of canned fish had arrived aboard a vessel, which sailed into Colombo on October 29 last year, a source knowledgeable of the operation, said.

Listing out the relevant reference and batch numbers of the consignments, the source said the Chinese products were manufactured on 09/10/2020 with a 09/10/2023 ‘expiry date’.

This means the stocks had been in the Colombo port for the past nine months, and had turned rancid despite a 2023 ‘expiry date’, the source asserted.

Consumer Affairs Authority (CAA) officers had raided the Lanka Sathosa outlet at Moneragala following complaints that canned fish was being hoarded.

“We found stocks in storage, but was told by officers there that instructions were received to withhold the sale of the ‘Kitchen King’ products until they were re-labeled”, CAA’s Executive Director, Thushan Gunawardena said.

As the importer was not in favor of Lanka Sathosa marketing the products under its original brand name, a sticker was affixed to obscure it, Peiris clarified.

Under Section 10 of the Consumer Protection Act, re-labeling a product constitutes an offence, Gunawardena pointed out.

Acting on a complaint, public health inspectors have taken a sample of the canned fish from the Mawanella outlet for testing, the Lanka Sathosa chief further said.

Responding to questions raised by the CAA, the SLSI said its officers had collected samples from the five containers following requests by the Ports Authority and Lanka Sathosa.

As the original importer had not submitted any documents to the SLSI so far, the need for sample collection didn’t arise, it said.

The CAA has further queried whether the SLSI was aware of the purpose the test results were required at the time samples were received.

The SLSI has clamped down on the import of substandard canned fish with an intolerable level of arsenic, particularly from manufacturers in China.

In a news report headlined “SLSI cracks the whip on substandard Chinese canned fish imports”, The Sunday Island of March 21, 2021 quoted the institution’s Director-General, Dr. Siddhika Senaratne as saying that fish harvested for canning has a high arsenic content as the sea in China is heavily polluted and dirty due to lax environmental laws.

“It is true that there is a scarcity of canned fish in the market because supply cannot meet the demand. However, this does not mean we should allow our people to be poisoned through arsenic-laden imports”, she was quoted saying in the news report.

With the SLSI stipulating a maximum arsenic tolerance standard of 1.0 milligram per kilogram of fish, a filtering mechanism is now in place to shut out substandard imports, she assured at the time.

Asked whether the consignment of Chinese canned fish procured by Lanka Sathosa was earlier detained due to its high arsenic content, Dr. Senaratne declined comment saying she’s “not allowed to talk to the media”.

“The DG wouldn’t want to be dragged into another controversy”, an official remarked, referring to the furore over her claim of toxins in foodstuffs, which she, however, declined to identify at the time.

At a time canned fish imports from China have been off the shelves since SLSI’s rigid monitoring of tolerable arsenic levels began, industry players expressed consternation on how a stock, which had been lying in the Colombo port for months, was suddenly given the nod for procurement by Lanka Sathosa.

With the scarcity of canned fish products in the market pushing up demand, will an importer abandon his consignments unless there was something rotten somewhere?, they asked.

“It is too far-fetched to imagine that they got the documentation wrong as these importers are seasoned campaigners in the game”.

It is apparent that Lanka Sathosa had not done its homework before jumping at the idea of procuring the consignment because Chinese-made canned fish had remained virtually out of bounds for many months because of fears of contamination, they said.

Importers didn’t want to risk their investments as a high arsenic level meant the consignments were either destroyed or ordered to be re-exported, they added.

“That’s why local products now dominate the market with a brand from Thailand also no longer available”.



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United States gives Sri Lanka 500,000 coronavirus rapid tests



The United States had donated 500,000 Rapid diagnostic tests to Sri Lanka worth Rs. 300 million to help the country fight Coronavirus, the US Agency for International Development said.

“By enabling rapid detection of the virus, these tests donated by the American people will save lives and protect public health in Sri Lanka,” USAID Mission Director to Sri Lanka and Maldives, Reed Aeschliman said in a statement.

“This donation builds on previous U.S. support to the Sri Lankan government’s pandemic response and reflects our strong, long-standing partnership.”

US has also given 1.5 million moderna vaccines to Sri Lanka.

The tests are simple to use and enable fast, decentralized access to direct testing. They do not require additional equipment or specialized laboratory access, which helps achieve high testing coverage.

The United States has also given of 200 ventilators to Sri Lanka’s health system.

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