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13th February 2000

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Notwegian FM to kick off search for peace

The first round of talks aimed at bringing the LTTE to the negotiating table with the Government is to being next week with the arrivals of Norwegian Foreign Minister Knut Vollebeak.

Foreign Minister Lakshman Kadiragamar yesterday confirmed that his Norwegian counterpart was arriving to kick off negotiating process , and insisted that the role envisaged for Norway would be one of a facilitator for talks with the LTTE and not a negotiator.

Mr. Kadiragamar was at pains to distinguish the difference.He had said that as a facilitator, Norway would be licensed to make contact with the LTTE and report back to the Sri Lankan Government, provide facilities for the discussions and even be present at them.Negotiations, he said, would be betwen the Government and the LTTE only.But Morway would have no power impose the solution on parties.

Tamil parties would prefer that Norway play the role of Negotiator with power to impose a solution.The UNP has taken a position similar to the Government that there should only be thirdparty facilitation.Opposition leader Ranil Wickremesinghe was of such a view but one of its main foreign affairs spokesman , Anura banadaranayake, has called fpr third party mediation.

The foreign Ministry kept a low profile during a preliminary sounding mission last month by a Norewegian Foreign Ministry of Ethc Affairs played a major role. The Foregin Office on Friday in anews release referring to Mr. Vollebek's visit said: "the possibility of Norway assisting discussions to take place between the Government and the LTTE aimed at resolving the ethic probem is also to be discussed."It said Mr. Vollebeak would meet President Kumaratunga, Mr. Kadiragama and Mr. Wickremesinghe. There was no mention of meeting others.The National Joint Committee, an umbrella organisation of pro-Sinhala groups, has also sought a meeting with Mr. Vollebek. Such a meeting was unlikely, a government sourcesaid.

Mr. Kadiragamar and Mr. Volltbeak's representatives had been meeting last year in Geneva on several occasions to discuss Norway's role in bringing the LTTE to talks.

Norway's peacemaking role in Sri Lanka was first made public by the President in a BBC interview from London.The LTTE has made no satement either welcoming or denoncing Mr. Vollebeak's visit , other than to explode bombs in buses and public places in what political analysts beleive is a move to pressuring the government into a weak bargainig position. MrVollebeak is to spend only a day in Colombo.

Scribes grilled over Atukorale's remarks

Senior journalist of three private media organisations have beeh questioned by the CID in connection with remarks made by UNP General Secretary Gamini Atukorle on the December 18 bomb blasta in Town hall and Ja-Ela.

The news editor and four jounalists on the NNL television , two journalist fron Savana radio and a reporter from diwaina newspapr were questioneds for carring Mr. Atukorale's statment made at a news conference soon after the blast. Mr. Atukorale had reportedly linked the PA for the Ja Ela blast which killed retired Army Chief of Staff Maj. General Lucky Algama, a UNP activist.

TNL news editor Namal Perera said the CID wanted the tapes of news broadcasts and a Janahanda programme along with voice cuts of Mr. Atukorale 's statment.s

The Diwaina reporter who was questioned for two and half hours and the Savana journalists said they were questioned on the UNP news conference.

Mr. Atukorale said he had heen summoned to the CID headqarters tomorrow to records a statement.He told the Sunday Times there was no reason to question journalist on a statment he made and that if the cid wanted to know something it should be him they should be questionning. "I stand by every word I said,"

Sanjeewa sacked

A controversial Reseve Police Constable attached to the Presidential Security Division has been interdicted for his aleged links with underworld operatives, a senior police officer said yesterday.

The interdiction of Vithanage Morris Amarasinghe alias Baddegana sanjeewa follows the arrest of notorious gang of seven at his residence at baddegana last week, the officer said.Police said three members of the gang had been released as there was no evidence.

However despite evidence against him there still were no moves to arrest the constable, and his whereabout are not known, The Sunday Times learns.

Price hikes causing ripples in economy

By Feizal Samth

Last weeks' sharp increases in diesel, kerosene and gas prices are set to trigger a "ripple" effect in consumer prices and the economy , but government officials and economists said the rise was inevitable due to the cost of crude in the world market.

"Anything can go up if you consider the cascading effect that diesel-powered transport has on the cost of essential commodities," said a private sector economist. Reports that the Ceylon Electricity Board (CEB) may increase price amidst fear by another drought could meanwhile set off a fresh crisis in the economy, otherwise seen improving this year.

Finance Secretary P.B. Jayasundera told The Sunday Times even with the current hike to diesel and kerosene prices, the government would have to incure a loss of between six to seven billion rupees annually. "If we had kept diesel at previous price levels the losses would have been in the region of at least 15 billion rupees annually."

But he assured that petrol or rail fares won't go up.

"I don't expect massive price escalations in goods and services. The price of petrol and rail fares won't go up," he said that adding that petrol consumption over the past four to five years had either fallen or stagnated due to the increasing number of diesel vehicles on the road.

Other officials said with the advent of more gas-converted cards, petrol consumption levels were falling. In 1998, there were 5,000 gas converted cars on the road while the figure for the last year, still unavailable, would be much higher.

The government on February 7 raised diesel prices by 2.75 rupees to 15.96 rupees a litre and kerosene by 4.80 rupees to 15.15 rupees a litre citing sharp increases in price of crude in the world market. This came a day after Shell Gas Lanka Ltd. increased the price of a 13 kg cylinder of household gas by 30 rupees to 365 rupees, also due to high global prices.

While bus fares and prices of vegetables and other perishables were seen moving up in local market as a direct result of the fuel price increases, other sectors in the trade said the situation had to be assessed before taking decisions on prices.

"We can't just increase price. We have to wait and see what our distribution agents come up with because they are the ones who would face the diesel price hike," said Lal Chandrapala, marketing directing director on Lanka Milk Foods Ltd, producers of Lakspray.

Private sector economists and analysts expect prices to rise and also put pressure on current low levels of inflation. "I reckon inflation would go up to around nine percent this year from an average of seven percent last year," said Nanda Nair, head of research at John Keells Stockbrokers Ltd.

Rajiv Casishetty, research head of another stockbroker, C.T. Smith, said the inflationary impact on the fuel price hike could lead to a clamour for increased wages, threatening the export sector for instance "If wage go up, our competitive edge in exports would come under pressure unless the rupee is adjusted to real, international levels." He added.

Analysts said raising diesel and kerosene prices unlike petrol was a politically sensitive decision and expressed surprise that the government had made the announcement independently instead of making it part of the budget. " Normally it is petrol that goes up since diesel is regarded as a poor man 's fuel,' one analyst noted.

John Keells' Mr. Nair however said the increase in fuel prices was inevitable. "We have been expecting it for some time in view of high overseas crude oil prices. The decision to increase diesel and kerosene may be because the government couldn't afford to subsidize these products and absorb such high losses.'

The price increase come as the government presents its delayed 2000 budget tomorrow. The budget is unlikely to have any surprises, "The focus on the budget like the past two or three years, would probably be on the high cost of war'" said Mr. Nair.

But the hoped that there would be a big emphasis on infrastructure development unlike in previous years where "capital expenditure in infrastructure had been curtailed."

Mr. Nair said that while the government had been cautious in the previous budgets, he expected the government to be bolder in the delayed 2000 budget. "With the presidential election out of the way, the government may want to be bolder."


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