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Vehicle permit revival threatens governance credibility – Advocata

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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



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Low-quality coal shipment affects Lakvijaya coal power plant operations

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Operations at Sri Lanka’s main coal-fired power facility, the Lakvijaya coal power plant, suffered a significant disruption soon after a new shipment of coal was introduced, raising concerns over generation stability and environmental emissions.

Energy analyst Dr. Vidura Ralapanawa said in a social media post that the plant began using coal from “Ship 11” on Wednesday, following confirmation from officials of the Ceylon Electricity Board (CEB).

However, almost immediately after the new batch of coal was fed into the system, the plant’s generation capacity began to decline due to the poor quality of the fuel.

According to Dr. Ralapanawa, the plant’s output dropped by about 82 megawatts overall. Unit 1 recorded a drop of 45 MW, Unit 2 fell by 15 MW, and Unit 3 declined by 22 MW shortly after the coal was introduced.

The situation worsened later in the night when two coal mills in Unit 3 reportedly became clogged around 11 p.m., causing a rapid fall in generation capacity. Unit 3, which normally operates at a higher output level, was said to be running at around 170 MW following the malfunction.

Coal mills are a crucial component in coal-fired power generation. They grind raw coal into a fine powder before it is fed into the boiler for combustion. Each generating unit at the Norochcholai facility is equipped with five coal mills, and any obstruction in these systems can severely affect plant operations.

When mills become clogged, plant operators often have to rely on diesel-fired burner guns to stabilise the flame inside the boiler. While this helps maintain combustion, it significantly increases operating costs because of the high price of diesel.

The heavy use of diesel has another consequence. According to Dr. Ralapanawa’s post, when diesel firing increases, the plant’s Electro-Static Precipitators (ESPs) must be shut down. ESPs are designed to capture and remove particulate matter such as fly ash before emissions are released through the chimney.

With the ESPs switched off, large amounts of fly ash may be released into the atmosphere, potentially affecting surrounding communities.

Dr. Ralapanawa further noted that the coal shipment appears to have low calorific value, low volatile matter, and high ash content, all of which reduce combustion efficiency. In addition, the coal reportedly has a low grindability index, making it harder to pulverise and increasing the likelihood of mill blockages.

He added that while the immediate clogging of the mills may be cleared within a day, the underlying quality issues with the coal could make the problem persistent.

The development comes amid earlier assurances from officials of the Ceylon Electricity Board that the Norochcholai plant could be operated effectively even with lower-quality coal supplies.

The Norochcholai facility, with an installed capacity of 900 MW, is the largest power station in Sri Lanka and a critical component of the national grid. Any disruption to its operations can have wider implications for the country’s electricity supply, potentially forcing the system to rely on more expensive oil-based power generation.

Engineers are currently working to address the clogged mills and stabilise generation, but energy analysts warn that unless the fuel quality improves, similar operational issues could recur.

By Ifham Nizam

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CSE regains some positive terrain but challenges remain

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CSE trading yesterday was positive overall on account of local economic growth prospects but concerns deriving from West Asian tensions lingered.

The market is still recovering from previous days’ uncertainties, market analysts said.

The All Share Price Index went up by 256 points, while the S and P SL20 rose by 63.8 points. Turnover stood at Rs 5.68 billion with nine crossings.

Seven crossings were reported in HNB Finance where 130 million shares crossed to the tune of Rs 1.1 billion; its shares traded at Rs 8.50, LMF four million shares crossed for Rs 348 million; its shares traded at Rs 87, Commercial Bank 661,000 shares crossed for Rs 142 million; its shares traded at Rs 215, Seylan Bank (Non-Voting) 750,000 shares crossed for Rs 49 million; its shares sold at Rs 75.50, ACL Cables 500,000 shares crossed for Rs 49 million; its shares traded at Rs 98, HNB 100,000 shares crossed for Rs 43.2 million; its shares sold at Rs 432 and Access Engineering 500,000 shares crossed for Rs 38.5 million and its shares fetched at Rs 77.

In the retail market companies that mainly contributed to the turnover were; HNB Finance Rs 331 million (34.8 million shares traded), Lanka Credit and Business Finance Rs 184 million (21.6 million shares traded), LOLC Holdings Rs 180 million (320,000 shares traded), Commercial Bank Rs 167 million (774,000 shares traded), Softlogic Capital Rs 138 million (twelve million shares traded), Sampath Bank Rs 124 million (789,000 shares traded) and ACL Cables Rs 123 million (1.26 million shares traded). During the day 330 million share volumes changed hands in 36639 transactions.

It is said that the banking and financial sectors performed well. HNB Finance was active in the financial sector, while Commercial Bank and HNB were active in the banking counters.

Further, National Development Bank has received Colombo Stock Exchange approval in principle to list Rs 16 billion of 11.50, 11.04 and 11.85 percent debentures, it said in a CSE filing.

NDB will issue 120 million Tier 2, listed, rated, unsecured, subordinated, redeemable Basel III compliant GSS+ bonds with a non-viability conversion, at Rs 100 each.

Yesterday the rupee was quoted at Rs 310.70/85 to the US dollar in the spot market, weaker from Rs 310.30/60 the previous day, dealers said, while bond yields were broadly steady.

By Hiran H Senewiratne

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Indian Ocean under fire: Parliament explodes over the sinking of ‘IRIS Dena’

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A new crisis looms with a second Iranian vessel at the doorstep

Sri Lanka’s parliament became a secondary battleground yesterday as the sinking of the Iranian frigate IRIS Dena ignited a fierce debate over national sovereignty, regional maritime priciples, and the government’s perceived ‘strategic paralysis.’

While the Navy’s rescue of 32 sailors was initially painted in shades of heroism, Opposition MPs have now unfurled a narrative of missed warnings and geopolitical betrayal.

In a scathing address, Opposition firebrand Chamara Sampath Dissanayake challenged the circumstances of the vessel’s arrival in Sri Lankan waters. The IRIS Dena had been a guest of the Indian Navy during the MILAN-2026 exercises just days prior. Dissanayake alleged that at the conclusion of the fleet review, the vessel was effectively ‘put out’ of India, leaving the crew with no choice but to steer toward Sri Lanka.

“This was a deliberate attempt by the host to put a guest in harm’s way,” Dissanayake charged, stopping just short of naming India directly while making the implication undeniable. He argued that Sri Lanka had been ‘set up’ to deal with the fallout of a targeted strike that occurred only 11 nautical miles from Galle.

The debate took a darker turn when SJB MP Mujibur Rahman dropped a bombshell regarding the timing of the attack. Rahman alleged that the IRIS Dena had signalled for permission to enter Sri Lankan waters 11 hours before it was struck by U.S. torpedoes.

“Why did the authorities keep silent?” Rahman demanded. He blasted the government for failing to act on humanitarian grounds, suggesting that Colombo’s hesitation provided the necessary window for what U.S. Defense Secretary Pete Hegseth termed a ‘Quiet Death.’ Rahman’s critique painted a picture of a government ensnared in superpower machinations, unable to uphold the principles of the Indian Ocean as a ‘Zone of Peace.’

Responding to the barrage of questions, Cabinet Spokesman Dr. Nalinda Jayatissa confirmed a chilling new development: a second Iranian vessel is currently positioned in the Exclusive Economic Zone (EEZ) off Colombo.

While Jayatissa assured the House that the President and the Security Council are ‘fully aware’ and making ‘necessary interventions’ to protect those on board, the lack of specific details fueled further anxiety. Political analysts suggest that the government’s failure to announce a clear, proactive neutral policy has left it in a state of ‘vacillation,’ unable to decide whether to grant refuge to the second ship or risk another tragedy on its doorstep.

The parliamentary clash was punctuated by the visit of former president Ranil Wickremesinghe to the Iranian Embassy yesterday to offer condolences for the passing of Supreme Leader Ayatollah Ali Khamenei. Wickremesinghe had warned on March 2 – just 48 hours before the sinking – that the current ‘leadership eviction’ methodology in the Middle East could destabilise the Indian Ocean.

As the death toll from the IRIS Dena stands at 87 with 60 still missing, the ‘can of worms’ opened in parliament reveals a nation at a crossroads. The government’s silence during the Dena’s final hours and its current ‘intervention’ with the second vessel will likely define Sri Lanka’s standing in a rapidly fragmenting global order.

As the House adjourned, one question remained hanging in the air: In the face of a superpower conflict, does Sri Lanka have the ‘backbone’ to be truly neutral, or is it merely a spectator to its own maritime destiny?

by Sanath Nanayakkare

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