aviation hub in Sri Lanka
A hi-tech air traffic management system proposed by the giant American
defence and aerospace company Lockheed Martin Corp has the potential
to make Sri Lanka a regional hub for civil aviation and enhance her
earnings from servicing aircraft.
The Board of Investment is now evaluating the proposal by Lockheed
Martin, which has teamed up with Airways Corporation of New Zealand,
a specialist air traffic management firm, BOI chairman and director
general Arjuna Mahendran said.
could run into several million dollars and the project would bring
in technology that would enhance flight safety, he said. This in
turn could attract more aircraft to fly through airspace within
the jurisdiction of the Colombo Flight Information Region (FIR),
an area covering 950,000 square miles stretching from the middle
of the Indian Ocean, from the Maldivian FIR to the Australian FIR.
which had 2001 sales of $24 billion and employs about 125,000 people,
is well known for its fighter planes such as the F-16 Falcon and
F-117 Stealth Fighter, transport aircraft such as the C-130 Hercules
which is used by the Sri Lankan airforce, and ballistic missiles.
It was also
the successful bidder for the United States Air Force multi-billion
dollar future joint strike fighter programme with its F-22 Raptor
that will replace the F-15 Eagle multirole fighter/attack aircraft,
as America's premier front-line fighter jet starting in 2005.
Airways Corporation of New Zealand specialises in air traffic control
and manages a huge area of the airspace over the south Pacific.
A team from
the consortium is in the island to collect data about air traffic
control from the Airport and Aviation Services Ltd (AASL) whose
radar surveillance centres control Sri Lankan airspace and the Colombo
Captain Sudharshan Manamperi, the Sri Lanka co-ordinator of the
project and former AASL chairman, the proposal by Lockheed Martin
and Airways Corp is for an airspace management system that would
be done in partnership with the government.
will bring several benefits to Sri Lanka," he said. "The
new air traffic management system will help better manage crowded
skies, allowing aircraft to fly closer laterally and longitudinally.
enhance flight safety, encouraging more aircraft to use our airspace,
and enabling the government to earn move revenue by servicing such
aircraft." The presence of a company like Lockheed Martin would
help to attract other American investors to the island, he added.
also could lead to other projects such as the setting up of an aircraft
maintenance base here, Manamperi said. The proposed air space management
system will help Sri Lanka modernise its air traffic control in
the Colombo FIR and be compatible with the requirements of the Future
Air Navigation System (FANS), a satellite-based air traffic control
system that will replace existing ground-based navigation and monitoring
sensors and communications systems by 2005.
to cope with the increasing volume of air traffic and provide more
effective navigation and greater safety, is being implemented world-wide
mainly through the auspices of ICAO (the International Civil Aviation
% foreign stakes in banks, insurance violate rights
Lalith Kotelawala, the Sri Lankan business magnate, has slammed
the government over recent budget decisions to allow foreigners
100 percent ownership in banks and insurance companies.
Sri Lankans can own only up to 15 percent in the bank, foreigners
are allowed unlimited control. This is a violation of our fundamental
rights," the chairman of the Ceylinco Group told The Sunday
Times Business in a no-holds-barred interview.
Ceylinco is one of the biggest conglomerates in Sri Lanka with interests
ranging from insurance, banks, finance, IT to higher education.
He said foreigners
could bring in their money and invest in anything and in the absence
of proper safeguards there could be money laundering, drug money
or money from terrorist activities. "There is no safety mechanism
to check such investments. You open a SIERRA (foreign) account,
bring the money in and take it out," he said highlighting the
need for the economy to be a Sri Lankan-oriented one without relying
too much on foreigners.
have the skills, talents and ability plus cash. We need to harness
these resources instead of depending on foreign money," he
said, adding that multinationals operating in this country have
brought little benefit to the country since most of the profits
He warned that
with costs of production rising in Sri Lanka, multinationals would
- instead of producing locally - import cheaper products from countries
like India where labour is cheaper, resulting in job losses and
other social problems.
that the stock exchange was expanded in the 1990s with the intention
of creating a share-owning democracy amongst Sri Lankans, which
is unfortunately not the case today because of wider foreign participation
in the markets.
for fuel price changes bi-annually
Sri Lankan industry has been affected by monthly changes in fuel
prices resulting in a situation where manufacturers find it difficult
to distribute costs, industrialists say.
Rangith Hettiarachchy, Deputy Chairman of the Ceylon National Chamber
of Industries, said the recent monthly changes in petroleum prices
have placed most sections of industry in a critical situation.
is correctly marketing petroleum products in line with world market
prices but when prices are revised on a monthly basis industrialists
find it difficult to distribute the cost of their products. If this
cost is not distributed properly, the manufacturer is not in a position
to recover it."
He said that
the government should introduce a price structure for petroleum
products valid for six months, saying that it is possible to predict
a price structure that would be valid for such a period.
picking up ahead of talks
Is optimism over the peace process finding its way onto the Colombo
The local bourse has certainly come to life in the past month. The
All Share Index finished on 684.7 points on Friday, up almost three
percent for the week and 11 percent for the month. Turnover has
also been strong.
are much more positive now on the economic front and on the front
of the peace process," said Dushyanth Wijayasingha, head of
research at Asia Securities.
"So that has really been reflected in investor sentiment."
But others are not so sure.
fund manager at Eagle Insurance, said the activity of the past few
weeks had more to do with a few individual investors taking some
big punts on selected stocks.
Excited by the
sudden activity, retail investors had also jumped in. "Strategic
buying started it and then everybody got on the bandwagon,"
he said. "I think there is greater optimism. People are willing
to pay premiums."
Another contributor to the surge in the market has been by the release
of mandates by the Insurance Corporation General Fund. However,
Kamalgoda played down the role of the peace process, although he
said the commencement of face-to-face talks would spur confidence.
In fact, there
was more potential for the market to go down should peace talks
"Most people have been burnt before and they will require something
much more concrete before they start investing on the basis of peace,"
he said. Regardless of the causes of the sharemarket surge, there
is agreement about which way the bourse should go from here.
just the beginning," said Prabodha Samarasekera, fund manager
at National Asset Management. "This market is on its way up."
The sharemarket is currently trading at a price to earnings multiple
of about nine times.
But if the peace
process continues, it could easily climb to over 11 times, Wijayasingha
said. The biggest winners in this re-rating should be not only the
tourism sector but also the banks.
are generally the first to benefit from any improvement in the economy,"
said Wijayasingha. "We see a fairly significant upside in the
banks sector." The banks have already been the focus of much
attention in recent weeks.
to recent trading in Commercial Bank and DFCC as evidence of the
level of retail speculation in the market. Commercial Bank climbed
a further Rs. 15 during the week to close at Rs. 158, while DFCC
gained Rs. 13 to finish at Rs. 158.
The two banks' share prices - which rose 23 per cent and 40 percent
respectively during May - have been buoyed by speculation surrounding
the upcoming privatisation of Sri Lanka Insurance Corporation, which
owns 30 percent of Commercial Bank and 11.5 percent of DFCC.
thought they will probably sell off the holdings before privatisation,"
encounters branding drama
By John Breusch
Five months after its launch in Britain, Dilmah Teas has reported
strong sales growth despite coming up against an unusual branding
problem. Director of operations Malik Fernando said the company
had received many letters from customers asking whether their product
was "Fairtrade" safe.
an organisation - backed by groups such as Oxfam, Christian Aid
and the Catholic Agency for Overseas Development - which promotes
improved conditions for workers in developing countries by labelling
products deemed to have complied with certain prescribed standards.
said that while Dilmah complies with the criteria set by Fairtrade,
it goes much further. Fairtrade is really targeted at international
brands that source their raw materials from producers in developing
countries, he said.
But as a Sri
Lankan-owned company that grows and packages its tea in Sri Lanka,
Dilmah makes profits which are returned to Sri Lanka and the local
And that, Fernando argued, is a claim no other tea brand can make.
However, Fairtrade's labelling criteria does not even seem to contemplate
a company such as Dilmah.
is no structure to acknowledge a company like us so we're really
in limbo," he.
"There is no provision - because I've searched high and low
- which looks at something which is more ethical than fair trade,
which is a technology transfer, a value added transfer to Sri Lankans."
So Dilmah has
to rely on its own resources to inform consumers of its unique position,
which it calls "ethical trade". "We say on our packaging
that we are more than free trade, that we are ethical trade,"
is some confusion because fair trade is a label that [consumers]
look for whereas for ethical trade there is no label. We have to
convince them through our promotions and advertising and I think
customers realise that this is a Third World company that is bringing
brands using the Fairtrade label are able to sell at a premium.
"The good thing about it is that a portion of the profits do
go back to these groups [that back Fairtrade]," he said.
it comes back to aid, so what we're saying is, we say trade, not
aid. Instead of giving a hungry man fish, it's better to teach him
how to fish." With Dilmah's launch into the British market,
the Sri Lankan tea industry's 135-year relationship with its founders
appears to have come full circle.
going very well for a new brand in an extremely British dominated
culture," said Dilmah founder Merrill Fernando. "I told
them [at the British launch] the industry that you gave us was an
important one but all of its fruits went out of the country. I am
bringing you a product to the supermarket that you can drink straight
away. There are no middlemen and we retain all the profits here
for the welfare of the country."