15th October 2000
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See you again soon across the isle UNP leader
Ranil Wickremesinghe seems to be saying to two 
top men in the last PA cabinet:- the former Trade 
Minister Kingsley T. Wickremaratne who lost his seat at 
last Tuesday's General Election and Minister of 
Justice and Deputy Finance Minister G.L. Peiris who 
topped the list in his party. This week will be as crucial 
as the last week in deciding who gets what. Will 
Dr. G.L. Peiris retain position in the Finance 
Ministry? What of the Trade Minister? The business
community in particular will be watching eagle eyed 
as to who gets the reins to these key ministries which
could seal their fate for the next six years. 
Pic by Lakshman Gunathilake 

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New Authority for water resources

The Legal Draughtsman is drafting a National Water Resources Act setting the framework for a National Water Resources Authority (NWRA) and a Water Resources Council. The NWRA aims to protect, conserve and manage water resources, Director, Water Resources Secretariat, M. Wickramage told The Sunday Times Business. 

Sectors falling under the NWRA's purview include irrigation, drinking water, hydropower, fisheries, environment, recreation and navigation. 

This umbrella organisation will provide for close collaboration between agencies within the water sector. The draft act provides for the river basin to be the planning and management unit of water resources. Scarcity of water in a basin will lead to a system of water allocation for bulk users and will be administered by the NWRA. A management system for ground water is also detailed in the draft act.

A twenty-one member Water Resources Council will play an independent advisory role to the NWRA. The draft act sets provisions for members to be recruited to the council from the private and public sector. The council is intended to provide facilities for independent review and observation of NWRA decisions.

Studies conducted in the early 1990's revealed a pressing need for a National Water Policy to implement an institutional framework and legislation to protect water. 

While numerous meetings with stakeholders saw the policy take three and a half years to finalise, the cabinet finally approved the National Water Policy in March this year. 

The new legislation setting up the National Water Resources Authority is based on this policy. Moves are also underway to set up a water sector regulator.

Ports in the dry dock

Professionals at the port have alerted the president that the Ports Authority is facing its worst financial crisis in decades. In a letter dated October 5, the Sri Lanka Ports Authority Engineers Association (SLPAEA) have indicated to the president that the port's reserve funds are drying up. 

"With only Rs. 2.5 bn being available as reserves in the form of treasury bills and bonds, the Sri Lanka Ports Authority is short of Rs.1 bn to pay for projects," the SLPAEA said in their letter to the president.

When the Ports Authority recently nudged the Bank of Ceylon for funds to buy dredges and extend the reach of their gantry cranes, the bank was quick to say no. The treasury was then forced to bail out this once prosperous giant with a government guarantee to enable a letter of credit to be opened.

Ports Authority officials said a question hung over how payments to the tune of Rs. 475 mn for salaries and kitchen supplies would be forked out.

But Ports Authority officials said the port had forked out once too often leading to similar plight. Sri Lanka Ports Authority funds have been used to build a lighthouse costing millions in Oluvil and a nine bedroom rest house, also in Oluvil. And even more has been spent on a feasibility study to determine the possibility of building a port in Oluvil. 

While shipping industry officials were of the view that both Kankesanthurai and Point Pedro were more viable locations to house a port, this does not seem to have deterred Ports Authority officials in their eagerness to develop the sparsely populated Oluvil. A hydrographic study to determine the movement of waves in this region was contracted to the University of Moratuwa.

Meanwhile transshipment volumes at the port have been declining over the last three years, contributing to its financial woes. There has also been a drop in container vessels arriving. Ten services have pulled out of the Colombo port during the last two years. However a pre-election recruitment drive saw 6000 new employees harbour at the port.

The recruitment drive was spearheaded by the former Ports Minister Ahraff, whose untimely death in the wake of the elections made the president to bring the ministry under her control. 

Minister Ahraff's successor Rauf Hakeem was on the verge of being sworn in to the ministry considered a legacy, when in a strange political twist, the post was withheld.

Mind your business

Bad bet

As the dust settles on the hustings the future political direction becomes clearer but the business community is not very happy with the ambiguous outcome.

But even more unhappy are the few major players in the Colombo market- it was an open secret that they ordered some bulk buying just before the polls in anticipation of a green victory and a subsequent jump in the market.

But that was not to be and the market declined instead- and our friends were left counting their losses...

Musical box

Now that the blues have won most of the seats everyone expects them to take control- and the former green man who has now turned blue has dropped several hints to the effect that he will be in charge of the black box once again.

Optimism among his loyalists is such that they are even speculating about top appointments that have to be made in the ministry.

But then again, we hear that the lady is not to keen to part with this particular portfolio given the rather 'hung' state of the House and the notorious past record of our friend. So, he may be stuck with his economic affairs tag.

Bankers boo

Two private sector banks recently merged into one with the blessing of the big bank but informed that the merged operation will run as two separate entities with the final merger into a single entity in 2003.

But now, they want only one senior management team running the show instead of two, leaving some half a dozen senior bankers from both banks without suitable jobs in the new set up.

Naturally, employees are up in arms and want the big bank which supervises all of them to intervene.

All eyes on Cabinet 

Within minutes of the election results trickling in the market plunged ten points as investors ditched choice picks such as John Keells Holdings and National Development Bank. Hopes of a UNP victory helped the market perk up pre-election, but the results jolted investors and stockbrokers to the rude reality of a PA victory. The All Share Price Index closed the week ten points lower at 509.

The market has remained sluggish throughout the PA's term in office with the All Share Price Index notching its highest point last year, when investors placed their bets in the run-up to the elections. The formation of a coalition government with the PA, EPDP and NUA which have 115 seats has now been announced after two days of horse trading. The PA's unholy alliance with the Ceylon Workers' Congress is expected to pose problems following plantation workers' recent demand for wage increases.

However the corporate sector has heaved a sigh of relief on learning the Janatha Vimukthi Peramuna ,which they believe opposes liberalisation, is not part of a coalition government.

A section of market watchers said a move to follow would be the appointment of ministers to key cabinet portfolios such as Trade and Industry and Finance. Others not so keen to pick up the pieces, painted visions of a sluggish market- six years hence.

"I am busy preparing my bio-data to send to leaders in the foundation garment sector. I hope they find my sewing skills adequate," said one disgruntled broker. The brain drain from the stock broking industry has been a cause for concern in recent times.

As all eyes rest on a president who is set to allocate cabinet portfolios the next event on the stock market calendar is the budget. The country has posted strong economic growth and good corporate performance in the first half of the year. Implementation of clear economic policies is crucial to sustain growth analysts said.

Meanwhile Colombo's business community and the corporate world are shuffling their feet wondering which way the wind would blow for them. In a strong show of support for the UNP most business people be it Pettah traders or corporate bosses and professionals in the capital and suburbs seem to have voted green but not got them in to govern. 

However they could surely not take a back seat for the next six years waiting for another chance before they get activated. They have to make the best of "a situation which is not of their choice" but contribute immensely to the growth of the country. 


The demise of former Premier, Mrs. B, saw many a sad soul weep over the sombre affair. However, going commercial with it…was redefining mourning.

Subsequent to the tragic turn of events last week, a leading five star city hotel issued a press release offering special discounted rates to any visitor who would attend her funeral. 

The press release said "On hearing of the sad demise of the former Prime Minister of Sri Lanka, Madam Sirimavo Bandaranaike, we at the …(a five star city hotel) – as a gesture of goodwill – have decided to offer a very special rate to visitors who would attend her funeral.

The special rate we are offering is US$ 35.00 Nett, for a single or double room only. All VIP courtesies will also be extended to all distinguished guests. 

Please contact the Lobby Manager or the Reservations Manager on Telephone No." 

Industry officials said that it seemed more like a desperate attempt to fill up their rooms than a mourning cry and a gesture of goodwill. Officials added that the attempt was humorous and that it was surprising for a five star hotel to make such an offer, even though the industry was doing reasonably well.

Latest tourism statistics show that tourism is on the rise and that bookings have been reasonably favourable. 

Officials said that they had never seen a five star hotel make such offers anywhere in the world in such circumstances. They added that it was more likely for a florist or a card shop to make such offers, but as a five star hotel, it was redefining marketing.


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