The Sunday TimesBusiness

26th May 1996




Paperless export procedure soon

By Asantha Sirimanne

The integration of the Sri Lankan economy with the rest of the world is to be strengthened through a state-of-the-art paperless trade documentation system which will also sharpen the competitive edge of the country's exports, The Sunday Times Business learns.

The Computer and Information Technology Council of Sri Lanka (CINTEC) is laying the groundwork to set up a company aimed at eliminating paperwork involved in international trade by applying Electronic Data Interchange (EDI) processes, trade sources said.

CINTEC Chairman, Professor V.K. Samaranayake said the main players involved in international trade, such as Sri Lanka Customs, the Ports Authority, freight forwarders, airlines, shipping agents and banks would be linked to the network.

At present trade documents such as Letters of Credit (LCs) or Bills of Lading (or Airway Bills) are raised on paper and are physically taken to the shipper, customs/port/airport, banks or other government departments in case of licensing to be stamped and approved. Multiple copies of these documents have also to be made for each institution. This is costly and time consuming and it may take hours or even days for the full process to take place.

Prof. Samaranayake said with the use of an EDI network such transactions could be carried out within minutes by transmitting the necessary information to each institution for approval and necessary action. The information could be flashed around in minutes, vastly speeding up import and export procedures.

Cabinet approval for the project has already been obtained by the Ministry of Science and Technology, sources said.

Prof. Samaranayake said the legal framework for the setting up of a company to operate a national EDI network is in progress and the project may get off the ground soon.

The main users of the EDI facility will be shareholders of the company and it is expected that Sri Lanka Customs and Ports Authority may have a substantial stake in the proposed company.

The company is expected to seek technical collaboration from a foreign company with experience in EDI, through a transparent bidding process.

Prof. Samaranayake said Sri Lanka could not afford to delay as some countries had already converted to EDI and may stop accommodating manual documents at a future date. Countries such as Singapore had already converted to EDI systems and Sri Lankan exporters will benefit from being able to deal quickly and efficiently with the destination country which has such systems, he said.

At present physical documents had to be input into the electronic system at the other end resulting in additional costs and delay.

Singapore Network Services (SNS), the company operating the national EDI network, 'Tradenet', has already expressed interest in getting involved in Sri Lanka, a consultant associated with SNS said.

SNS had been established in 1988 as part of the Singapore government's strategic plan to exploit information technology. The company is owned by Singapore Trade Development Board, Civil Aviation Authority, Singapore Telecom and Singapore Ports Authority.

Investment Consultant Bandula Fernando said a team from SNS had visited the country recently. He says productivity in companies could be improved with the use of EDI, and boost the competitive edge of Sri Lankan exports, such as garments.

In the Philippines, for example, a joint venture with SNS, EDINet Philipines Inc, has established GTEBNet. The Garment and Textile Export Board (GTEB) of the Philippines uses the EDI network for export licensing, issuing of quotas, export authorisation, certificates of origin and export clearance. While 30 top exporters were directly linked to the GTEB Net more than 1,500 others could use the system via service centres.

CEB unions oppose LECO sale

By C.P. Karunanayake

The Government's attempt to sell its stake in the Lanka Electricity Company (LECO) seems to have opened a hornet's nest with most of the trade unions in the Ceylon Electricity Board (CEB) vehemently opposing the move.

This is the first step towards the privatisation of the CEB, seems to be the view shared by most of the CEB employees. However the Public Enterprise Reform Commission (PERC) Chairman Rajan Asirwatham said that so far PERC has not received any instructions from the government towards that end. Yet he too agreed that it was a distinct possibility.

Responding to queries as to the reasons for the sale, he stated that it will result in increasing the operational efficiency of LECO through private sector management. Introduction of new technology by a strategic investor is also an objective, he said.

Chairman of LECO, Mr. Subasinghe, whom we contacted in this regard, refused to make any comments. What is ironical about the whole affair is that while there is so much opposition to the move within the CEB, virtually no one in LECO seems to be opposed to it.

The company which is already a private company, is at present jointly owned by the government and the CEB. The government's direct stake in the company amounts to 49% of the shares outstanding and is held by the Secretary to the Treasury. The CEB owns the other 51%. The CEB at present has an agreement with LECO to provide the latter with electricity at a pre-determined rate. This agreement will continue to be in force even after the proposed privatisation, which will make it obligatory for the CEB to provide the privatised entity with electricity at subsidised rates.

Under the proposed sale of shares the 51% stake of the CEB would be sold to a strategic investor. Out of the government's direct stake in the company, 39% will be sold to the general public through a public issue, while the other 10% will be gifted to the employees of LECO. The carrot of 10% of the shares, which is being dangled at the employees by the government may be the reason for the non existence of any opposition within LECO.

The convenor of the Lanvima Surakeeme Sanvidanaya (Movement for the Protection of the CEB) Mr. Lente said, his organisation which represents some 22 trade unions in the CEB, is opposed to the sale of LECO on several grounds. One of the main reasons was that LECO is a national asset. Answering queries as to whether the employees of the CEB are entitled to oppose the privatisation of LECO, which is a separate body, he maintained that as the 51% stake, which will be divested to a private investor, is currently held by the CEB they are fully entitled to do so. He said that LECO, which already has a captive market composed of the biggest consumers of electricity, has the potential to drain customers away from the CEB by generating electricity on its own. He further said that in such an eventuality the CEB will be obliged to buy any excess electricity generated by LECO.

Mr. Asirwatham who spoke on this issue said that though the private investor is not barred from generating electricity on its own it would take some time for such a situation to arise as the investor would first have to upgrade the distribution network. He also maintained that the private investor would take a hard stand on the theft of electricity which is at present mostly ignored.

Moving on to the issue of job security of employees, Mr. Lente expressed the fear that privatisation would lead to worker retrenchment and worsening of working conditions. However this appears to be a paranoic reaction as according to Mr. Asirwathm, conditions for the sale includes provisions against such measures.

Kinhill Director in Lanka to talk development

Lindsey Davidson, Director, International Division of the Kinhill Group of Australia will arrive here today for a week long tour.

He will meet ministers and top officials in the public and private sectors, in connection with major development projects in Sri Lanka.

Mr. Davidson was responsible for the joint venture of Kinhill Demarsean when he met Desmond Van Cuylenberg, Chairman of Demarsean in Melbourne. The initial discussions and negotiations they underwent on his many visits to Colombo resulted in their first project in Sri Lanka. This is the project management of Vanik Building - an Asian showpiece just started in Colombo. The agreement was signed recently with the CEO of Vanik, Justin Meegoda.

Continue to Business page 2 - Counter move to Charter, Despite decline in profits, HNB vows to keep momentum

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