6th July 1997


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Moves to ban private vehicles in city

By Asiff Hussein

The Transport Ministry's plan to ban private vehicle travel within Colombo city limits will be implemented from Sept 1, Transport Minister A.H.M.Fowzie told the Sunday Times last Friday.

The plan is in the initial stage (Stage 1) of a comprehensive programme undertaken by the Government to ease traffic congestion within major urban centres.

Minister Fowzie said that the scheme, which will be unique to Sri Lanka, will be initially restricted to Colombo city limits. In effect the plan is to prevent vehicle owners within the city from using their vehicles to travel within the city limits. Instead a luxury bus service plying the main roads of the city will provide a means of alternative transport. Special bus halts would also be constructed for the purpose.

A flat rate of Rs. 25 will be charged for travel to any place within Colombo city limits.

The Minister noted that the rate is quite reasonable when compared to the costs of petrol car owners would otherwise have to spend for travelling.

He also noted that female commuters would have no reason to worry as all conductors would invariably be women. According to Mr. Fowzie a number of benefits both to private vehicle owners and the state would accrue as a result.

Vehicle owners would be saving on fuel costs, parking costs and wear and tear.

The state would be saving on valuable foreign exchange as petrol besides other fuels, still continue to be a state- subsidised commodity.

Air pollution which is a major health and environmental hazard would also be significantly reduced noted Mr. Fowzie.

He also observed that there was likely to be a significant reduction in road accidents within the metropolis as a result.

However, although the system would become mandatory for private vehicle users, travelling for social events such as weddings would not be affected as the government would be specifying a minimum number of passengers in each vehicle in such situations, observed the Minister.

According to Mr.Fowzie 10 luxury coaches will be initially commissioned for the purpose.

The ministry plans to eventually increase the fleet to 50 buses, he said.

He noted that although the service would be state - run the government would be considering private participation at some point in future. The estimated cost of the plan is about Rs. 50 million.

Minister Fowzie noted that if the plan is successful, he would be considering implementing the scheme in other major towns as well.

Stage 2 of the plan which will not be implemented in the immediate future, would make it mandatory for private vehicles entering the city to carry at least five persons. Vehicle owners will, if not be required to leave their vehicles at special parking centres and travel via buses.

The implementation of this stage would take time as the state would have to locate and allocate parking space at various points outside the city.

Minister Fowzie also plans to close down loss-making bus depots. He observed that 85 percent of all bus depots in the country are running at a loss. He said that he plans to revive the state-run Sri Lanka Trsnsport Board (SLTB) to take over the duties of the depots recording losses.

Enforcing laws to ban the use of private vehicles to travel within the city limits (expected to come into force with effect from September 1) has caused varied reactions from consternation, dismissal to plain disbelief among Colombo's more privileged.

The scheme claimed by Minister Fowzie to be his brainchild, entails a luxury coach service with a flat rate of Rs.25 plying the major roads of the city and serving the city's vehicle users.

Although controlling traffic congestion in the city is laudable (especially in a context where traffic congestion in the metropolis has reached unbearable proportions) many view this scheme as impractical, to say the least.

Such a radical plan according to many requires careful thought and planning. It is not something to be rushed into or enforced virtually overnight. They point out that in the city where private vehicle travel within inner city limits is banned during peak hours, alternative transport including a strategic road and rail network starting from the parking spaces is readily accessible at extremely short frequencies. Private vehicle users are provided a sheltered walk,like an excalator, lift or covered pavements to reach their bus/train/stations. Such a system does not exist in Sri Lanka and is not likely to come into existence in the foreseeable future, however good the Transport Minister's intentions are. Moreover what methods will be adopted to identify a city vehicle from one coming in to the city, residents ask.

Would the government be considering a highly mobile highway patrolling force for the purpose? If so how will they obtain the necessary evidence to detect whether the vehicle users are travelling into the city or leaving it? These are some of the major problems with this scheme.

The ministry plans to commission 10 luxury buses for the purpose shortly with the fleet being increased to 50 at some point in the future.

Residents ask how the government will ensure that vehicle users will have a frequent efficient service with the first ten buses, until the rest are commissioned. They also wonder how the elite of Colombo would be willing convert to travelling in buses (luxury or not) leaving their limousines in their car parks. How are law breakers (i.e those who use private vehicles in the city ) be identified and punished?

Further would the buses be operating within a particular timeframe? What about night services? Finally would all this ease or worsen the traffic congestion?

No doubt the Transport Minister has thought out all these complexities before he takes steps to make private vehicle users within the city "law breakers!"

If city traffic congestion could be effectively eased, without causing inconvenience to any human being be they the elite or downtrodden, then such a plan would be gladly accepted by all commuters.

But easing city traffic cannot be done at the expense of people's fundamental rights to convenience among other basic facilities and rights. Then it becomes another kind of 'Jam.'

Tea too takes to Internet

By Asantha Sirimanne
and Ishan Sheriffdeen

Not satisfied with the high demand Sri Lanka tea has been enjoying especially from the CIS, an old established tea brokering firm has turned to the Internet to meet the marketing challenges of the future.

"Tea, considered to be one of the oldest industries in the country is now entering information superhighway, to make the most of the information technology available today," Forbes & Walker Group Director Anil Cooke said.

Forbes & Walker Teas Brokers (Pvt.) Ltd., part of the 117 year old Forbes group inaugurated a website to promote the sale of Sri Lanka tea worldwide on Thursday, said to be the first such website in South Asia.

Last week President Clinton announced that the US government would not tax transactions on the Internet. The US government is expected to push for international agreement to make the Internet a global free trade area. At present Internet commerce is still in its infancy. The main obstacle to increased transactions via the Internet is the lack security, as it is now possible for third parties to eavesdrop on passwords and personal identification numbers. However new research is underway to secure transactions. At present there are also US restrictions against the export of information security software that has already been developed in the US.

The Forbes website however still far from able to actually conduct trading in tea.

"This system could be used to promote private sales, not auctions," Chairman Colombo Tea Traders Association Michael de Zoysa said.

Last year Sri Lanka exported 234 mn kg of tea out of a total production of 158 mn kg. Though exports were up from 235 mn kg in 1995, Kenya had overtaken Sri Lanka to become the largest exporter of tea.

Sri Lanka earned Rs 34 bn from tea on an average FOB price of Rs 139 up from Rs 24 bn from Rs 101 mn.

Last year CIS countries had purchased 46 mn kg of tea. Turkey had shot to second place with 31 mn kg up 138 per cent from 1995. Syria came third with 22 mn up from 16 mn kg, Forbes & Walker 1996, tea report said.

At the moment Forbes internet site will make available price information, catalogues, availability of tea stocks.

Sellers could check stock status, receive invoices and contracts of teas sold, obtain delivery instructions.

Buyers could also submit delivery instructions, request invoices for sales and the account status, in addition to receiving the latest information on available tea according to grade.

Apperals ask for more

By Mel Gunesekera

Apparel Exporters are pushing the Minister of Industries Development to obtain additional quotas from the European Union (EU) for the category for ladies blouses.

"The quota allocation for ladies jackets has always been underutilised. We are hoping to get the green light to transfer this excess quotas to the ladies blouses termed as a 'hot category" said Mr. Lyn Fernando Chairman/Managing Director Creations (Pvt.) Ltd.

The Minister had aleready discussed the issue with EU Ambassador Ilka Usitalo industry sources said.

In the past due to bureaucratic procedure, we have usually got the approval around October/November, at the tail end of the quota season," Mr. Fernando said.

"This year, we are making an early start, with the hope of utilizing this category."

The industry is also facing a problem with the imposing of the Terminal Handling Charges (THC) by Ceylon Association of Steamers and Agents (CASA), which is causing much hardship and loss of revenue to exporters. CASA has said that in countries like Hong Kong and Singapore, THC is levied on the Shipper or the Buyer who pays the freight.

"But in our country CASA will not request the Shipping Lines to levy such charges from the buyers of apparels who pay freight at the destination as there will be under-cutting within the shipping lines," said Sri Lanka Chambers of Garment Exporters President Cassian Fernando. At present, they charge about US $ 61 per 20 ft container, US $ 98 per 40 ft container or US $ 6 per cubic metre.

"Its a killer," said Fernando.

"We are asking the government to invite more shipping agents to Sri Lanka, to make the shipping industry more competitive," Sri Lanka Apparel Exporters Association Chairman Ashroff Omar said.

However the statutory requirement for 60 per cent of a shipping agency to be held by locals was hindering the entry of more agents.

"We are ant the government to remove it," Mr. Omar said. "The government has brought about this situation by reducing competition."

Exporters complain that Port tariffs have increased by about 300 per cent, making Colombo more expensive than Dubai or Singapore.

Handling charges for a 40 ft container which previously cost Rs. 5,000, has risen to Rs. 9,750 for importers. Exporters who previously paid Rs. 5,680 for a 40 ft container would now pay 11,360 as handling charges.

"On top of all this, they have fixed the charges in foreign currency; US $, earlier we paid in Sri Lankan rupees" Lyn Fernando said.

Ports Authorities say that they need the revenue in US dollars to pay back a Japanese loan, in Japanese Yen. "The Petroleum Corporation and even the Ceylon Electricity Board purchase their requirements in foreign currency, but they don't charge their customers in dollars, so why do the same for exporters?," asked Mr. Fernando.

Associations in the Apparel industry who represents 95% of the country's apparel exports have also signed a 'Conversion Package' for the Textile Industry.

They are requesting the government to promote total duty free trade on textiles.

"This is a very daring document. We are presenting these proposals in order to strengthen and gear the textile industry to be a partner of the apparel industry to face the challenges in the year 2005", said Mr. Omar.

The proposals include; Converting all textile mills into BOI or to make all their inputs duty free, Freeze all existing loans and allow a long time for repayment on a case by case basis, Grant new loans for modernization at 8% interest and accept the new machines as collateral. Give quotas to garment industrialist who are willing to absorb these textile workers.

The Associations firmly believe that these proposals will revive the textile industry and make it a strong global player.

"Up to now, the failure of the textile industry is blamed on the leakage from the garment industry", Omar said.

"Controls have not worked before. Even during the UNP regime controls were there, but it does not seem to have worked. Because our textile industry has not grown, except for a few export projects.

Market Focus

Upward moves

As expected, profit takers dominaed the market. The indicis which declined marginally over the beginning of the week, from ASPI 800 levels regained upward momentum due to retail and foreign buying to close at higher levels by the end of the week.

Foreign institutional pressure was evident in JKH/DFCC/Hayleys/NDB & Commercial Bank. It is expected that the indicies would break the ASPI 800 barrier in this upward momentum.

CSM is one of the best performing exchanges this year to date, with 30% gains during the period (In US terms this is 25% gains). With market P/E of only 11.6 because of low EPS, due to reccessionary trend in the country, it is expected that the country as a whole is in a recovery stage with more and more companies expected to show better results over the second half of 1997. Therefore it is estimated that at present, price levels are attractive to medium and long term buyers.

The second quarter of 1997 is expected to have more companies performing far better than the comparative period in 1996. As results are expected in the middle of July to August, significant improvements would be expected in results of the Plantation Companies. Tea Smallholders/ Kegalle/Bogawathalawa are results to look out for.

The Tourism Industry is buoyant with expected arrivals for 1997 estimated at nearly 400,000, thereby strengthening the hotel sector companies to show improved performances over the year.

With the market picking-up appreciably, more investors are buying into new and existing private companies in private placements trading transactions, as some of these companies are expected to be quoted in The OTC or the main board in couple of months. Expected private companies to be quoted: Film Lanka/Equill/Royal Palm/Fernwood Porcelain/PAN Asia Bank etc.

JKH has dethroned DFCC as CSE's top market capitalized company due to the rapid increase in JKH price levels over the week.

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