Business

The X-Press Pearl disaster and the imperative for regional maritime cooperation

Published

5 years ago

2021/08/10

Sahan Weerasooriya

Righting the Ship:

By Githmi Rabel

On 20 May 2021, Sri Lanka’s worst-ever marine disaster occurred when a fire erupted on the Singapore-registered MV X-Press Pearl container ship just 18 km Northwest of Colombo. While the long-term cost is yet to be determined, the negative impact on industries such as fisheries and tourism, and people who rely on the coastal resources of Sri Lanka is already apparent. This article examines the key consequences of this disaster on Sri Lanka’s coastal economy and highlights the need to enhance regional maritime cooperation to prevent the recurrence of such disasters.

Impact on Fisheries and
Fishing Activities

The fisheries industry is an important sub-sector of the Sri Lankan economy; it accounts for 1.3% of GDP at current prices, exhibited a growth rate of 9.9% and accounted for 1.5% of export earnings in 2019. It is also a source of many direct and indirect employment opportunities from fishing to processing, distributing and trade and boat-building and maintenance. Approximately 583,000 individuals are employed in this industry and there is a supporting workforce of 2.7 million. It is also crucial to note that fish contributes more than 60% of all animal protein consumed in Sri Lanka and is the main source of protein for low-income groups.

However, following the fire and the consequent spill of nitric acid and plastic pellets into the sea and nearby coast, fishing was temporarily banned along an 80 km stretch of the coast. The effect on the local community has been stark, with some estimates claiming that around 16,000 fishers were affected. The X-Press Pearl fire, which disrupted the fisheries supply chain, from fishers to processors to wholesale and retail traders, made the fishing community more susceptible to the structural economic and social inequality they already faced. The coastal fishing community, one of the three sub-sectors of the fisheries sector of Sri Lanka, is the most vulnerable as they are daily income earners. The loss of even a single day’s income severely affects the ability of a fisher’s family to meet their basic needs. Furthermore, for most involved in this industry, there are no alternative means of income.

Of the LKR 720 million compensation received by the government, LKR 420 million has been set aside for the fishing community affected by the fire and fixed prices have been set for fishing gear and equipment in consultation with relevant businessmen. But it is important to understand the context in which this marine disaster occurred: the fisheries industry was already severely impacted by the pandemic. Islandwide curfews, cross-border mobility restrictions and trade regulations led to various constraints on access to necessary equipment and markets.

Ecological Impact and Tourism

Sri Lanka’s coastal tourism is heavily dependent on its rich marine biodiversity. The plastic waste and potential oil spills from the ship threaten not only the beaches and seas which are home to sensitive ecosystems such as lagoons and coral reefs but also its marine life.

The Marine Environment Protection Authority (MEPA), the main government body responsible for marine pollution, has stated that the plastic waste from the ship has probably caused the “worst beach pollution in our history,” and will lead to years of ecological damage. For example, the marine pollution caused by the fire is responsible for the death of 200 marine animals —including 176 sea turtles, 20 dolphins and four whales— as of now. Plastic pellets, which are easily carried by the tide, attract toxins from the water and can cause death if ingested by marine life, have washed ashore from Puttalam to Matara. Despite various efforts such as beach cleanups, the attempt to restore the coast is ongoing.

The coast has lost much of its former beauty and attraction, and out of 15 tourist zones, eight have been affected by the fire. Furthermore, the damage caused to fish breeding areas will result in lesser yields of crabs and jumbo prawns, which are especially consumed by foreign tourists. The fear of contamination and reduced supply of these items will have an immediate financial impact on the coastal economy. There is also the fear that toxic chemicals will damage the coral reef which takes years to regenerate. This depletion and ruin of coastal resources will have a spillover effect on both the fishing community and tourism leading to a mid-to-long-term economic impact.

This is not the first ship fire or oil spill that has occurred in Sri Lankan waters, with the MT New Diamond ship fire in 2020 being one of the most significant. Sri Lanka’s position in the middle of many sea and trade routes in the Indian Ocean, where around 200 to 300 ships —mainly oil tankers from the Persian Gulf to East Asia—pass daily, makes the country especially vulnerable to marine accidents.

Moving Forward

The X-Press Pearl fire was controlled only after Sri Lanka received emergency support from India, and this clearly highlights the inadequacies of current institutions to handle a crisis of this scale. While Sri Lanka does have a domestic structure in place to prevent and manage marine pollution, it is crucial that the country works closely with others in the region to achieve the same. Currently, the MEPA has the authority to implement the National Oil Spill Contingency Plan (NOSCOP) which allows the mobilisation of support from the navy, coastguard and the Sri Lanka Ports Authority. However, the emergency response system is too reliant on reactive responses as opposed to more proactive approaches, which aim to not minimise the damage caused by marine pollution but to prevent it from occurring. This requires continuous monitoring of waters and heightened scrutiny, especially given that Sri Lanka is on a trajectory to become a maritime hub and expand its port capacity.

Sri Lanka can achieve this only through regional cooperation —with countries such as India, Pakistan and Bangladesh— that is based on the facilitation of knowledge, resource sharing, constant communication channels and the formulation of standardised security measures for responders. However, this must occur through a formal, binding mechanism for otherwise, any assistance provided will be purely voluntary and context dependent. For example, requests made to offload the cargo at the Hazira port in India were denied which ultimately led to the X-Press Pearl fire on Sri Lankan waters. Given that the increase in maritime traffic has not led to a proportional increase in response capacities in countries such as Sri Lanka, official regional cooperation is key in preventing marine accidents and protecting shared waters.

Link to Original Talking Economics Blog:

Righting the Ship: The X-Press Pearl Disaster and the Imperative for Regional Maritime Cooperation

Githmi Rabel is a project intern at the Institute of Policy Studies of Sri Lanka (IPS). She is an undergraduate at New York University – Abu Dhabi, majoring in Economics with a minor in Social Research and Public Policy. (Talk with Githmi – githmi@ips.lk)

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Business

Vehicle permit revival threatens governance credibility – Advocata

Published

1 hour ago

2026/02/14

Thilina Walpola

Advocata warns revival of vehicle permits threatens governance credibility, public trust and economic reform and strongly cautions against government consideration to allow vehicle imports for high-ranking government officials who received permits upon retirement.

According to statements in Parliament, 1,900 permits have already been issued under this concessional scheme for senior officials, with 563 permits issued in 2025 alone. Meanwhile, ordinary citizens endure an extended vehicle import ban and some of the highest effective taxes on personal transport vehicles in the world.

During the presentation of the 2026 Budget Proposal, President Anura Kumara Dissanayake declared: “There will be no permits. The permit culture must end in Sri Lanka!”

Advocata welcomed this commitment, recognising permit culture as a relic of a feudal system, not a feature of a modern economy. It is a system that has, for decades, rewarded privilege over performance, entrenched inequality, and undermined the credibility of the state. The President’s affirmation offered renewed hope that Sri Lanka was finally moving toward transparent and equitable reform.

To now entertain exemptions for a select group sends a dangerous signal about reform credibility. Even policies publicly acknowledged as corrosive have the potential to quietly return.

The Normalisation of State Sanctioned Privilege

Vehicle permits are not compensation. They are discretionary privileges, operating as hidden transfers of public wealth to a privileged few, while the broader population absorbs higher taxes and reduced services. Worse still, they place retirement benefits at the mercy of political discretion, turning professional civil servants into political dependents rather than accountable public servants.

Therefore, it is precisely the high-ranking officials that must lead by example.

In December 2010, Transparency International Sri Lanka revealed that the majority of 65 newly elected Parliamentarians, including 2 Cabinet Ministers, sold their duty free vehicle permits for as much as Rs. 17 million each, when adjusted for inflation using Department of Census and Statistics figures, that windfall is equivalent to which adjusted for inflation sits at approximately Rs. 48 million today.

In December 2012, in an event the Sunday Times classified as a “Christmas Bonanza for MPs,” the Government granted permission for MPs to openly sell their duty free permits. At the time, they sold for Rs. 20 million each, which adjusted for inflation sits at approximately Rs. 50 million today.

In October 2016, Nagananda Kodituwakku, an attorney-at-law and rights activist, wrote to the Commissioner General of Motor Traffic, naming 75 MPs who imported luxury vehicles, including BMWs, Mercedes-Benz, Land Cruisers and even a Hummer. The total tax waived per MP ranged from Rs.30 million to Rs. 44.7 million. In today’s terms, this range approximately translates to between a staggering Rs. 66 million and Rs. 98.5 million.

History demonstrates the scale of abuse enabled by this system.

Toward integrity in Governance

As Advocata has previously highlighted, Sri Lanka’s cascading tax structure drives effective import duties on most passenger vehicles into the 125–250 percent range. Every duty-free permit therefore represents a direct fiscal loss; revenue that must be recovered through higher taxes elsewhere or reduced public services for everyone else. Since 2020 alone, more than 25,000 duty-free permits have been issued to government employees, including during the height of the economic crisis.

Making exceptions now would set a dangerous precedent. It signals to every remaining permit holder that persistence will be rewarded, inevitably triggering lobbying pressure and further demands for carveouts. This is how temporary “concessions” become permanent entitlements. Once reopened, the system cannot be credibly contained.

From an economic and governance perspective, reintroducing selective exemptions would undermine public confidence in fiscal consolidation, weaken the credibility of reform commitments, and damage investor perceptions of Sri Lankan regulatory stability and policy consistency.

The appropriate solution lies in transparent, on-budget salary structures, subject to Parliamentary oversight. Crucially, they must compensate public servants fairly without undermining fiscal discipline or institutional integrity, avoiding the distortions created by discretionary privilege schemes.

Advocata calls on the government to take the following actions:

Abandon plans to allow vehicle imports under existing duty free permits.

Commit to permanently ending vehicle permit schemes, replacing them with clear and transparent salary frameworks subject to Parliamentary oversight.

Legislate a prohibition on duty-free vehicle permits for public sector officials, safeguarding against future reversals and ensuring consistent policy application.

Sri Lanka cannot rebuild trust while preserving elite carve-outs. Reform commitments retain credibility only when they are applied consistently — without selective exemptions. Advocata spokespersons are available for live and pre-recorded broadcast interviews via 0755477522

Business

Sri Lanka gears up for global cycling adventure

Published

1 hour ago

2026/02/14

Thilina Walpola

The dignitaries gracing the launch event.

The vibrant island of Sri Lanka is set to welcome cycling enthusiasts from around the globe with the much-anticipated Trek4 Sri Lanka Cycle Ride, an event that promises adventure, breathtaking views, and a celebration of local culture.

Trek4 Ceylon officially announced its annual tour of Sri Lanka at a press conference held at Cinnamon Grand Colombo, unveiling the 2026 five day charity ride dedicated to restoring St. Luke’s Methodist Mission Hospital in Puttur. The trek began from Cinnamon Grand Colombo February 10th and will end in Jaffna on 14th February covering over 560 kilometers across Sri Lanka. The ride will cover some of the most picturesque routes across the island, from the stunning beaches up to Jaffna. Over 50 riders from 11 countries take part in the trek including United Kingdom, Australia and United States of America.

Andrew Patrick, British High Commissioner to Sri Lanka expressed strong support for the Trek4 initiative. He stated, “This cycle trek not only promotes cycling and sustainable tourism but also emphasizes our mission to help local communities thrive. By participating in this event, cyclists will contribute directly to the local economy and foster community development. It’s a fantastic opportunity to explore the beauty of Sri Lanka while making a positive impact.”

Speaking at the gathering Australian High Commissioner Matthew Duckworth said “Cycling in Australia is a deeply ingrained cultural phenomenon, with Australians being world-renowned for their participation in both competitive road cycling and extensive off-road trekking. It was an honor to attend the send-off gathering for the Trek4 cycle ride in Sri Lanka at Westminster House. This initiative not only promotes fitness and camaraderie but also strengthens the bonds between our nations. I am excited to see the positive impact it will have on both participants and the communities they engage with along the way. “

By Claude Gunasekera

Business

Anticipated uptick in banking and financial sector shares

Published

1 hour ago

2026/02/14

Thilina Walpola

Both CSE indices showed high performance yesterday because most stock investors anticipate an upwards trend in the banking and financial sector in the coming months, market analysts said.Amid those developments both indices moved upwards with a high turnover level. The All Share Price Index went up by 37.33 points, while the S and P SL20 rose by 24.17 points.

Turnover stood at Rs 8.5 billion with 17 crossings. Top seven crossings were as follows: Tokyo Cement 11.5 million shares crossed to the tune of Rs 1.19 billion; its shares traded at Rs 104, TJ Lanka 18 million shares crossed for Rs 671 million; its shares traded at Rs 37.50, Sampath Bank 2.35 million shares crossed for Rs 366 million; its shares sold at Rs 156, Tokyo Cement 1.95 million shares crossed for Rs 168 million; its shares sold at Rs 86.20, Colombo Dockyards 1 million shares crossed for Rs 156 million; its shares traded at Rs 156 and HNB 313,000 shares crossed for Rs 136.8 million; its shares sold at Rs 437 and Digital Mobility Solutions 500,000 shares crossed for Rs 79.5 million; its shares traded at Rs 159.

In the retail market, top seven companies that mainly contributed to the turnover were; Tokyo Cement Rs 866 million (8.3 million shares traded), Tokyo Cement (Non-Voting) Rs 746 million (8.6 million shares traded), Colombo Dockyard Rs 410 million (2.6 million shares traded), TJ Lanka Rs Rs 331 million (8.9 million shares traded), Softlogic Capital Rs 305 million (40 million shares traded), Janashakthi Insurance Rs 227 million (1.5 million shares traded) and HNB Rs 152 million (350,000 shares traded). During the day 57.32 million shares volumes changed hands in 36500 transactions.

It is said that construction related companies, especially Tokyo Cement, performed well while the banking and financial sector performed well too, especially Sampath Bank and HNB.

Yesterday the rupee was quoted at Rs 309.20/23 to the US dollar in the spot market, from Rs 309.30/37 the previous day, dealers said, while bond yields were broadly steady.

By Hiran H Senewiratne