Govt. takes over national carrier

Harry Jayawardena, P.B. Jayasundera and Tim Clarke
Turbulent skies greet SriLankan
PB who 'knows nothing about airlines'appointed chairman
Staff exodus with Emirates' exit leaves airline struggling
Loss of code share will drastically cut SriLankan's visibility
Emirates could control SriLankan from within and without


In an atmosphere of declining business and insecure staff the Government of Sri Lanka will take over the management of SriLankan Airlines on Tuesday, April 1.
Precipitated last December by the failure of the national carrier to accommodate 35 members including President Mahinda Rajapakse on a fully booked flight from London to Colombo which would have resulted in off loading commercial customers, the ensuing rift between major shareholder Emirates and the Rajapakse government culminated in Emirates cocking a snook at a renewal of the management contract.
Back foot
The government will take over management of the national carrier on the back foot. It has no business plan or a way forward. It has ditched its former Chairman Harry Jayawardena and up until Friday, March 28 was still juggling names for the chairmanship and board. Thus it was that even as late as Friday morning the names of Secretary, Ministry of Aviation, Tilak Collure and Treasury Secretary P.B. Jayasundera were being bandied about.
Finally President Rajapakse appointed Punchibanda Jayasundera as chairman, a man who once told The Sunday Leader he knew nothing about airlines in relation to a question on his appointment as a director of Mihin Lanka. An appointment he later resigned fromon April 10, 2007.
The rest of the government appointees to the board are Nishantha Wickremasinghe, the brother-in-law of President Rajapakse, Lalith De Silva, earlier of Telecom during Thilanga Sumathipala's chairmanship and Central Bank Governor Nivard Cabraal's brother-in-law Sunil Wijesinghe who is also chairman of Dankotuwa Porcelain.
President's man
Informed sources however told The Sunday Leader newly appointed consultant Lalith de Silva, earlier of Sri Lanka Telecom and Saudi Telecom whohad been presenting himself as the President's man, had been pushing for the executive chairmanship of the company rather than as a figure head chairman under the Emirates management deal.
The fact that all executive decisions were being made by Emirates with the GOSL members not having executive powers was another contentious issue raised by the government in early December 2007 at a one-on-one discussion between Wickremasinghe and Emirates'TimClarke.
Knows nothing about airlines
Meanwhile Treasury Secretary Jayasundera is a man who may not know anything about airlines but is well versed in the sale of the national carrier to Emirates as it was he, as chairman, Public Enterprise Reform Commission (PERC) who clinched the controversial deal 10 years ago, widely regarded as one of the most corrupt scams perpetrated on the public weal by the then Chandrika Kumaratunga government of which Mahinda Rajapakse was an integral part. After all, Rajapakse was a part of the Chandrika led cabinet that approved the controversial deal in the first place.
On March 17 this year President Mahinda Rajapakse had called for the resignations in writing of the government nominated directors Harry Jayawardena (Chairman), Nishantha Wickremasinghe, Sanath Ukwatte and Raju Chandiram. The letter written at the behest of Rajapakse calling for their resignations was in fact signed by Punchi Banda Jayasundera himself, who has now clinched the top post to the detriment of Harry Jay. However informed sources said the government was looking for a full time chairman unlike Harry who ran his own business empire.
Saner counsel
Nishantha Wickremasinghe on behalf of the government flew to Dubai two weeks ago for last minute negotiations with the President of Emirates and Director, SriLankan Airlines, Tim Clarke, but Clarke indicated he was unable to meet him and directed Wickremasinghe to CEO, SriLankan, Peter Hill.
Earlier it was only Nishantha Wickremasinghe who emerged as a saner counsel in the chaos following the eviction of Peter Hill. Last week Wickremasinghe declined the chairmanship of the national carrier citing pressure of work.
With Wickremasinghe's refusal two other names were put forward, Singer Chairman Hemaka Amarasuriya and Tobacco Company's new Chairman Jayampathi Bandaranayake. However given the magnitude of the problems the airline was bound to face with the exit of Emirates there were few takers for the post. And here's why.
Exodus at SriLankan
A large number of staff are getting jittery about the future. Already 32 pilots are leaving, many going to Kingfisher Airlines while some 30 engineers have left, a large chunk of them to a maintenance outfit in Abu Dhabi called Gamco. Of the cabin crew some 40 have already left for more lucrative and stable prospects at Etihad and Emirates. Such an exodus would mean the airline would have to shrink its operations, reduce its frequencies and cut down on certain routes as the airline would not be able to operationally sustain itself.
No CEO yet
So far there is still no Chief Executive Officer or Chief Operating Officer appointed although the carrier had advertised internationally for the CEO post. Ironically this was despite the government making the appointment of expatriates as heads of departments, CEO - catering, engineering etcetera one of the primary contentious issues that led to the eventual parting of ways with Emirates.
Former Head of Commercial, Seelan, now country manager China , and Head of Worldwide Sales and brother of Sajin Vass, Manoj Vass Gunawardena have both applied for the post of COO while informed sources said Manoj had also applied for the post of CEO. Airline staff are more concerned about the post of CEO which they say has to be filled by a knowledgeable man with airline expertise unlike with the post of chairman which is more a political appointment with perks and benefits.
Staff are concerned that political appointments and a large exodus of staff will affect the credibility of the airline.
Changing the structure of the company
The seven member board consists of four government appointed directors and three Emirates Directors - Tim Clarke, Gary Chapman and Nigel Hopkins. Emirates owns 43.63 % of the shares while the GoSL owns 51.05% and employees hold 5.32% of the shares. The government will be unable to change the structure of the company without the approval of Emirates which will remain the national carrier's largest competitor in the skies. Mind you Emirates will also have access to SriLankan Airlines secrets including a huge data base of passengers, routes and agents.
Unsavory options
There are some unsavory options before the government. It can buy out Emirates but so far Emirates run by the astute businessman Tim Clarke is not selling. In January Emirates floated a sum in excess of US$150 million as the value of their stake in SriLankan Airlines but for the time being Clarke said it would retain its equity and maintain a board presence. And their lies the rub for the government.
Emirates bought the 40% stake plus full management control and exclusive rights for 10 years at a mere US$ 70 million.
At the time chief negotiator for the government was none other than P.B. Jayasundera. Perhaps he has been returned to the national carrier to make restitution for his follies 10 years ago.
EGM
While day to day activities and resolutions could be carried through with a 50 plus 1 majority at a board meeting, special resolutions may be passed as per the Companies Act only at an Extraordinary General Meeting and by a majority of 75% of those shareholders entitled to vote and voting on the question and where not less than 15 working days notice specifying the intention to propose the resolution as a special resolution has been duly given.
Special resolution
It would take a special resolution to change the structure of the company. A special resolution would be required to alter the company's Articles of Association, approve a major transaction, approve an amalgamation of the company, reduce the company's stated capital, wind up the company, and change the name or status of the company.
Diluting shares
If for instance the government intending to dilute the share slice of Emirates decided to increase its share capital, it would only be able to do so at an EGM and the special resolution to do so would require 75 percent under the Companies Act. However even international norms require a majority of two thirds that is 66% of the majority.
Unfortunately the government has only 51.05% shares. Even with the employees' shares the government can still only muster 56.37% of the majority and therefore Emirates will remain a formidable force within the company with the government rendered a eunuch.
Share purchase agreement
Furthermore the Share Purchase Agreement between the government and Emirates will not end tomorrow, it will be only the management contract and Business Plan that will cease. Therefore the provisions of the Share Purchase Agreement will also come into play.
For instance if the government decides to sell its shares it is obligatory for the GOSL to offer first right of refusal to Emirates under the agreement and vis a versa.
Aircraft lessors
Maintaining the leases say SriLankan Airlines administrative sources would be one of the biggest challenges. In fact it is reliably learnt that airline leasing companies are already getting jittery about the Emirates pull out as questions arise whether SriLankan Airlines can stand alone surrounded by such huge financial commitments.
The uncertainty has placed the government in a very vulnerable position. The other issue is of guarantors for the leases when Emirates walks out.
Sale and lease back
Emirates operated on a sale and lease back policy of the fleet and therefore the company is cash rich at the moment and the government will not face any immediate monetary anxiety. The Emirates sale and lease approach made sure the company had an easy cash flow with a balance sheet that showed no liabilities and no assets. The government is however expected to face problems from the lessors who will no doubt call upon the government to at least obtain a guarantee from Emirates or come back with a principal operator of stature.
Banks and investors were willing to take risks or negotiate without collateral due to the stature of Emirates as a financial giant, however industry sources say it would be difficult for the Government of Sri Lanka or SriLankan Airlines alone to negotiate in the financial world of airlines at the same level of acceptance.
There was a great deal of economisation with Emirates acting as big brother but with SriLankan having to negotiate on its own probably having to pay cash up front the running will be tough. The government too may have resorted to the sale and lease method of its aircraft but that road has already been travelled by Emirates.
Capital infusion
The national carrier will not be able to stand alone if there is no capital infusion for expansion of fleet, redecoration of aircraft or increase in capacity and routes. With all the negatives in the country, a lack of a modern fleet, a lack of flatbed seats and the prevailing war situation, SriLankan Airlines will face many challenges as it goes it alone.
Company sources said sorely needed refurbishing of the aircraft which will cost a minimum of US$30-40 million or at least a redesign of the seats in business class which will again cost a heavy packet.
Offices
Offices of Emirates and SriLankan Airlines have been amalgamated in approximately 23 destinations and if SriLankan Airlines wants to move out after April 1 that too would involve a cost factor. Moreover station managers and staff would also have to be maintained by SriLankan Airlines further upping the cost factor.
Skywards
Air Lanka had a frequent flyer programme called Serendib Club whereas Emirates at the time did not have such a system. Emirates following the 1998 deal took over the Serendib system, upgraded it into a more sophisticated programme and renamed it Skywards where Emirates became the dominant partner.
BOI Chairman Dammika Perera earlier lamented to The Sunday Leader the entire programme was controlled in Dubai and even the membership is not made known to the overseas SriLankan country managers.
Meanwhile Skywards members have already been informed in writing of the key changes from April 1, 2008 as follows:
"Earning Miles: You can continue to earn Skywards Miles for travel on SriLankan Airlines until March 31, 2008. Any missing miles can be claimed within six months of the travel date.
"Reward tickets: Rewards on SriLankan Airlines should be redeemed by March 31, 2008 and will be valid for a period of one year from the date of issue. Assistance with any ticket changes will continue to be handled by Skywards service centres."
However now comes the crunch. With regard to Gold and Silver membership benefits starting April 1, 2008, the following benefits will only be available when flying with Emirates:
(1) Priority check-in at Business Class counters when travelling in Economy Class.
(2) Guaranteed excess baggage allowances.
(3) Guaranteed seat reservations for Gold members.
(4) Lounge access in Colombo when travelling in Economy Class for Gold members.
And from April 1, 2008, all Skywards queries are to be directed to the Emirates office in Colombo.
Skywards of course continues to be internationally accepted and with Emirates' expansion to over 100 destinations worldwide, and a global network of partner airlines, hotels, car rentals and financial services, Skywards could be used not only for travel but for upgrades and inspirational shopping and a variety of exclusive holiday and leisure rewards.
SmiLes
SriLankan Airlines meanwhile has commenced a frequent flyer programme called SmiLes. However industry sources say the scheme is localised and gives no value to the customer especially in the international market.
Locally oriented and more designed for a local budget carrier rather than an international airline, the quaint scheme offers exclusive privileges on SriLankan Airlines flights, free miles when you fly with SriLankan, airlines ticket purchases / partial payments, purchases on in-flight duty free, Serendib Treasures and purchases on holiday packages from SriLankan Holidays.
SmiLes members who reach the Silver Tier level can also opt to join the Baggage Plus or Baggage Premier programme. The Baggage Plus members will get an additional 25kgs and Baggage Premier members will get additional 35kgs. SmiLes Baggage Premier members will also have access to the airport lounge and guaranteed seating on economy class.
Meanwhile obviously Emirates is holding on to its huge customer base from Skywards courtesy SriLankan Airlines.
Code Share
Both carriers benefit from the code share agreements and given that SriLankan does not fly to many countries like US, Canada, Rome, Zurich, and code shares with Emirates including flights code shared to Singapore, two points in Germany other than Frankfurt and some lesser known points in the UK like Birmingham, this would be a major loss.
SriLankan's international visibility will drastically decline which will in turn affect its load. The loss of code share flights also means that customers are inconvenienced. Furthermore a code share Emirates flight gave SriLankan Airlines 25% of the fare which SriLankan would now lose.
Reservation system
SriLankan has been totally technologically integrated with Emirates. The national carrier shares the Emirates owned Mercator system which was upgraded at preferential rates of US$1-2 million.
Not only does Emirates have access to all SriLankan Airlines data they will either withdraw the service within six months or charge SriLankan the going commercial rates of US$5-6 million to remain. Mercator was an outgoing system from Emirates that was handed over to SriLankan.
Industry sources earlier told The Sunday Leader it was obvious Emirates had been getting ready for a pull out. By selling the two remaining aircraft owned by the national carrier and then leasing them back Emirates had successfully liquidated their assets. With 43.6% of the shares they would also have equal status on a future board and could be the biggest stumbling block in any decision. Emirates would remain SriLankan Airlines' formidable competitor in the skies with one advantage.
Emirates would be able to control SriLankan not only from within but also from without including through their IT reservation system with which SriLankan is now totally integrated.
Receding from a position of strength
Route Network
SriLankan flies to 51 destinations in 28 countries in Europe, Asia, Middle East, Australia and North America but these include a large number of code share flights. SriLankan is the most frequent foreign airline into India with a total of 95 flights per week. In 2007 passenger revenue was Rs. 54.6 million, a 10.67% increase from 2006 which was Rs. 49.4 million. The number of passengers carried in 2007 was 3.18 million as opposed to 3.01 million in 2006.
Share holding
GoSL - 51.05%
Emirates - 43.63%
Employees - 5.32%
By virtue of office, three of the government nominee directors including the chairman own one ordinary share each of the company.
Aircraft
At the time of privatisation in 1998 the national carrier's fleet consisted of nine aircraft. That is four ageing Lockheed L1011 Tristars, two Airbus A320s and three Airbus A340s. These were owned by the airline. Today SriLankan has 15 aircraft all on financial leases. They are six new A330-200 aircraft, four A340s, five A320s, two Antonov AN12F Freighters, a Cessna Caravan aircraft and two Turbo Otter amphibious aircraft
Profit
SriLankan Airlines Group posted a post-tax profit of 862.18 million Sri Lankan rupees (7.8 million dollars) for the financial year ended March 31, 2007 - a drop of 50 percent from the previous year.

UPFA Wins Sri Lanka's First Eastern Provincial Council Elections

The United People’s Freedom Alliance (UPFA) obtained a majority of seats in Sri Lanka’s first ever Eastern Provincial Council in elections held yesterday (May 10). The UPFA led by President Mahinda Rajapaksa won a majority of electorates in the Batticaloa and Digamadulla Districts, while the Opposition United National Party won a majority in the Trincomalee District, giving overall control of the Provincial Council to the UPFA.
There was a turnout of more than 60 per cent of voters at yesterday’s poll that was held under free and fair conditions, according to elections authorities, polls observers and most of the media.
The UPFA led by the Sri Lanka Freedom Party (SLFP) contested in alliance with the Thamil Makkal Viduthalai Puligal (TVMP - Tamil People’s Liberation Tigers) which is the breakaway group from the LTTE, representing Tamil of the Eastern Province, which has abandoned terrorism and accepted the democratic process.
In elections of the local government bodies of the Eastern Batticaloa District in March this year, the TVMP fared well in all local bodies it contested, winning a majority in the Batticaloa Municipal Council that now has a mayor from the TVMP.
The Opposition United National Party (UNP) led by Ranil Wickremesinghe contested the Eastern Provincial election in alliance with the Sri Lanka Muslim Congress. This defeat adds to a string of more than 12 consecutive electoral defeats by the UNP.
This is the first time an election for a provincial council to the Eastern Province was held. It followed the de-merger of the Northern and Eastern provinces in 1996 on an order by the Supreme Court, which held that the temporary merger of the two provinces since 1987 was illegal. The Security Forces later liberated the entire Eastern Province from the control of the LTTE in 1997, dealing major blow to the separatist, terrorist outfit.
The campaign of the UPFA in the eastern election focused on the government’s success in liberating the East from LTTE, restoring democracy there after 20 years of LTTE under the terror of the LTTE, and the major developments programmes launched there by the government of President Mahinda Rajapaksa.
According to official results already announced, the UPFA has won a majority in all three electorates of Kalkudah, Batticaloa and Padirippu in the Batticaloa District; the electorates of Ampara, Sammanthurai an Pottuvil in the Digamadulla District, and Seruwila in the Trincomalee District.
The UNP won the electorate of n Kalmunai in the Digamadulla District and Trincomalee and Muttur electorates in thee Trincomalee District.
The UPFA has won 6 seats from the Batticaloa District and 4 seats from the Trincomalee District. The UNP has won 5 and 4 seats respectively in these two districts. The JVP and the Tamil Democratic National Alliance (TDNA) won 1 seat each in Trincomalee. The seat allocation in the Digamadulla District, where the UPFA has won a majority of votes, has yet to be announced. The overall winner in the Province, the UPFA, will also get two bonus seats.

Source: Government of Sri Lanka

Govt. Celebrating the Capture of Thoppigala on July 19th with a bang....

The govt. led by President Mahinda Rajapakshe is likely to celebrate the Thopiigala victory to face over other debacles which are being faced by the common man in the south, CoL, Rising fuel prices, abductions.... etc

While the main opposition claims that they had captures in 1992 under President DB.Wijetunga. whilst asking to have a select commetee to probe the Pre-election where MR had given money to the LTTE. The govt. is also hoping to accerlarate the development work after the Thursdays celebrations. And also hoping to have Local govenment Elections in the Eastern territory. where it is beilieved that the CVheif minister would be given to LTTE Renaged Karuna.

The Donor countries hav put pressure on the govt to restart the peace process where both the Govt. & the LTTE are not ready at the present situation. The Opposition with the SLFP (M) Mangala Samaraweera & Sripathi Surriyarrachchi and the most crucial Govt ministers to do the jump to the opposition on 26th of July in the stage where millions of people are expected to participate.

Lets seee what happens Next............

GOVERNMENT LACKS COMPETENCY TO GOVERN...... SRI LANKA – LAND LIKE NO OTHER.

With just 17 months in power, President Mahinda Rajapakshe’s popularity has eroded since the commencement of the Tiger Air attacks in the country. While the president is being convicted of being giving money to the tigers to come into power to run-up to the Presidential elections in November 2005, which claims that the Government has given Rs 200 million prior to the election and another Rs 800 million after the election. After the Tsunami then Prime Minister Mahinda Rajapakshe were alleged to have taken US $ 80 million from the Tsunami funds which came to the country to a so-called private account “Helping Hambanthota” to carry out work destroyed by tsunami devastator.

The human rights bodies are crying foul. Every day there are lives which are lost due to torture, abductions and killings. This was started after the Mawil Aru anicut incident, after the government was hold responsible for killing the 10 aid workers who came to assist in that tragedy. Mind you they were international aid workers and not local aid workers. After this incident there was tremendous increase of human rights violations taking place in the government folds. The president does not have any clear cut policy framework where he is working. He only works to that moment of time emergent strategy without having deliberate strategies to tackle the situation.

He says that no meat could be consumed during wesak poya and all beef shops will be closed. Then how on earth are the few tourists who come to the country going to eat? Thailand being a 100% Buddhist country even hasn’t done that. And banning all liquor even beer. By this there will be an increase of illegal liquor, like kassipu and other related stuff which are more harmful for the humans. Who pays a huge sum of taxes to the government where it helps to run the country, if the government takes these measures the government will loose these taxes for the welfare. When the government is short of money they speak to CTC and DCSL and ask for money, and when they do take this actions like these it will much more adverse effect rather having liquor. Cost of living is sky rocketing and inflation is at an all time high, the rupee is depreciating. Today the US $ dollar has surpassed Rs 115 and the ₤has gone up to Rs 221 where one month before the US $ was 109 and ₤was 213.

The corruptions in the government folds are also have increased double folds. The there are over 100 ministries where it’s a record in the world. For just 20 million population there are more than 100 ministries. Just look at other countries like china has around 25 ministries. Can even a government play with the poor peoples money like this by taking EPF & ETF money to commence commercial flights under presidents name and for his private use named “MIHIN AIR” this is totally abuse of power.

The president sacked two prominent ministers who helped him to secure victory, Minister Mangala Samaraweera and Sripathi Suriyaarrachchi. For a small wrong which they have committed in 1999 which is eight years ago. Why are they now doing this after all they were there all this time? Is totally unimaginable how undemocratic the president is and how power hungry he could be.

LTTE HAS GONE TO A HIGHER LEVEL IN THEIR WAR STRATEGY – PSYCHOLOGICAL WARFARE.

The LTTE has reached a higher level in their war strategy over the government of Sri Lanka. Since its two decade old ethnic war against the security forces. LTTE launched 4 air attacks which caused panic in the governments’ ranks. The last was on the day of the World Cup final against Australia where the whole country was gloomed on their televisions watching the finals.

The LTTE has now changed its strategy as their ground level and sea attacks have not proved to be any success as naval crafts and army has prevented them to succeed. Earlier it was claimed that the LTTE was building an air strip in Iranamadu in Wanni. But over security forces said that they have destroyed the run-way which couldn’t be used. It is still a misery how the LTTE was able to smuggle the air crafts to the Wanni, train the pilots and do the necessary ground work to form the Air wing for the tigers. This is the forth successive LTTE air raid just over a month. The first, such attack was to the Katunayake International Airport on March 26 where the 2 aircrafts came and bombed but unable to do much harm physically but did a much damage in other ways sending out signals to international community that they were having air power. By this act Cathey Pacific suspended flights to Colombo but commenced later on again. 3 airmen was killed and 16 were wounded. The second such incident was to the Army Engineers Unit in the HSZ at Palaly on the April 23rd where six soldiers were killed and 13 were wounded. A third attempt to bomb the Katunayaike air base was made on April 26. and finally on the 29th dawn in Kollonnawa and Muthurajawela.

In order to win their goals they need not come and attack a vulnerable place or HSZ in Colombo or any other place. If they just could flew over the air space and drop a bomb this only will be enough to bring disarray to the country to jeopardize the tourism Industry which already collapsed. This is basically a psychological war fare carried out by the LTTE to win over their rights. Since these developments now the Airport has been closed for operations daily from 10pm till 4am which is a bad situation for the country. And the Colombo Port is also in danger. So the government should take a collective desoion and destroy the tiger aircrafts which they have somehow with the help of the international community. Sri Lanka should purchase anti air defence system with aircrafts which could destroy planes in the air such as MI-29 gunships. Wih radar systems and Guided missiles which could destroy enemy planes

MIHIN AIR – THE SCENE BEHIND THE BUDGET AIRLINE IN SRI LANKA

Mihin Air the budget airline which was commenced commercial flights recently in Sri Lanka. Launching Budget airlines is good in a country for the less fortunate people who were unable to travel in the national carrier could now fly at a affordable rate. There are so many budget airlines around the world. Some of them are South East Airlines, Easy Jet.

There was a big ha ho in the media and every where when it was launched. True it was nt done the proper way as should have been. This is because the president him self was involved I it. The Name MIHIN comes from the term Mahinda. As to “Mahinda Chinthnaya”. The funding for this project was taken from the public funds using the EPF & ETF funds which were not transparent and without the approval of the cabinet. First it did not get license to fly, then the president immediately removed the chairman of the Civil Aviation Authority (CAA) by installing a person known to him, then the license was given and it commenced the fights. Are this Transparency which the government is talking and the democratic ways of governing the country like no other as the theme in the Sri Lanka Tourist Board.

After it was launched the President seems to be flying in this line as if its his private property. Even to fly to Barbados to see the World Cup final which had been a humiliating welcome to him. I would like to ask where is his so called Policies? Now the popularity of the president has declined to greater shame after it could not protect the air space after the air raid which was carried out by the tiger planes on four instances. Now the government is trying to purchase new air power to attack the LTTE light air crafts spending billions of rupees at public cost. This will intern take the Cost of living and the inflation rates to much higher levels. Who will suffer? The poor public will suffer who elected him to b the president of this nation of Sri Lanka, after cheating to come into power by hook and crook.

Who is paying the fuel bill and thew monthly installment of US $ 110 ???? the people of Sri Lanka is paying, the president's private airline.

People, culture and language

An island nation strategically located in the Indian Ocean, Sri Lanka is considered the regional hub of South Asia. It has a population of 19 million and the average annual population growth rate of 1.2 per cent, is considered to be the lowest amongst all the South Asia Association for Regional Cooperation (SAARC) countries.

Buddhism is the main religion accounting for 69 per cent of the population while Hindus represent 15 per cent, Christians 8.5 per cent, and Muslims 7.5 per cent.
The two main languages are Singhalese and Tamil but English is widely spoken and is the language of commerce and business in Sri Lanka. At 91 per cent, the literacy rate is the second highest in Asia after Japan.

Sri Lanka is a multi-ethnic, multi cultural and multi religious society. The influence of the Portuguese, Dutch and British colonisation together with local cultural influences has made it one of the most cosmopolitan centres in Asia. The population can be divided into four major ethnic groups: Singhalese (74 per cent of the total population) Tamils (12.6 per cent) Moors (seven per cent) and Tamils of Indian origin (for 5.5 per cent). Other minority groups include the Burghers (Dutch/Portuguese origin) and North Indians.

Economic and financial climate
In 1977, Sri Lanka adopted policies to liberalise and deregulate its economy becoming the first country to commence free market reforms in the South Asian region. Despite more than 18 years of continued civil unrest, there’s been steady economic growth and the Gross Domestic Product (GDP) rate has averaged between 5-6 per cent per annum, which could be attributed to the liberal economic policies followed by successive governments. Inflation has been falling steadily over the past few years and is now in the region of 7–8 per cent per annum.

2001 was a difficult year for Sri Lanka as unfavourable global economic conditions exacerbated domestic uncertainties that negated the positive projections made at the start of the year. The situation was worsened by the escalation of civil war and severe drought conditions affected the economy as a whole. For the first time since independence Sri Lanka had a negative GDP growth rate of 1.4 per cent. However, with the ongoing peace efforts and cessation of hostilities the economy is back on track and the International Monetary Fund has projected the GDP growth rate for 2002 would be in the region of 3–4 per cent.

A recent study undertaken by the World Bank and Index of Economic Freedom on policy environment and investor competitiveness ranked Sri Lanka 39th among 150 nations – well ahead of Pakistan, India and Bangladesh. The annual per capita income of approximately A$1624 is the highest among all South Asian countries.

The Sri Lankan Government is the main policy maker when it comes to the formulation of Public Investment Programmes (PIP) to revitalise and develop the economy and accelerate structural reforms. The more recent PIP programmes have concentrated on developing new infrastructure facilities, including information technology and improving the nation’s competitive advantage and productivity by encouraging diversification in its industrial and manufacturing base by promoting exports.

The private sector is considered the growth engine of the nation and since 1987 the government has embarked on a privatisation programme whereby 40–60 per cent equity in several government-owned entities has been sold off. Many more government companies are pegged for privatisation. The private sector has also been encouraged to play a lead role in infrastructure development and the provision of utilities particularly in the telecommunications, power generation, port development and distribution of liquefied petroleum gas sectors. Other reforms include the simplification of the tariff structure to a two-band system, the cutting back of subsidies, reductions in the cost of import licences, introduction of tax incentives, reduction of interest rates and liberalising exchange controls.

Agriculture (including forestry and fisheries) is an important part of the Sri Lankan economy. This sector, which basically comprises the cultivation of agricultural crops for domestic and export purposes, contributes approximately 23 per cent to the GDP and 20 per cent to the country’s export income. Over the past decade Sri Lanka’s agricultural sector has changed from the cultivation of subsistence crops to value added production using improved technology and modern techniques.

The privatisation of the plantation sector in 1992 has resulted in the introduction of better management techniques, technology and increased productivity that has yielded substantial dividends for the economy. Sri Lanka is one of the world’s largest producers of tea, nearly 90 per cent of which is exported. It’s also one of the world’s leading producers of natural rubber. Domestic use of rubber by the industrial sector accounts for nearly 56 per cent of total production and today Sri Lanka is considered to be a global producer of quality industrial rubber tyres and surgical gloves – the latter by Ansell (a large Australian multinational company).
Manufacturing is another dynamic sector that accounted for nearly 21 per cent of GDP in 2000. Successive governments have continued to promote the diversification of the economy through rapid industrialisation particularly in export-oriented industries. Medium and large-scale factories account for 84 per cent of Sri Lanka’s industrial output and over the years private sector ownership has also been actively encouraged.

The services sector accounts for more than 50 per cent of GDP and the main contributors are communications and tourism. The communications sector has grown by 40 per cent per annum of the past three years. Sri Lanka has valuable deposits of quality mineral sands, ceramic raw material, silica sand and precious and semi-precious stones even though it accounts for only two per cent of GDP.

Political climate
In Sri Lanka the president is the official head of state. The current president Mrs Chandrika Bandaranaike Kumaranatunga was directly elected for a period of six years and has wide-ranging executive powers that include the appointment of the prime minister and the cabinet of ministers.

The unicameral National State Assembly (NSA) is the supreme and sole legislative body. The NSA comprises of 225 seats with 196 filled by direct election and the balance allocated to parties on proportional representation for a period of six years.
The two main parties are the United National Party and the Peoples Alliance (made up of the Sri Lanka Freedom Party, Communist Party. Other parties include the Sri Lanka Muslim Congress, Tamil United Liberated Front Janatha Vimukthi Party a leftist group and the Ceylon Workers Congress that represents plantation workers.

Sri Lanka has had a written constitution since gaining independence in 1948. A new constitution was adopted in 1977 where sovereignty, the executive, the fundamental rights of the people, and legislative and judicial powers were clearly outlined.

Trade statistics
Trade between Sri Lanka and Australia has been increasing steadily over the past decade. Australian imports to Sri Lanka include:
wheat
dairy products
cotton fabric
processed food products
fresh fruits and vegetables
Sri Lanka has an open trade policy and protective tariffs have been progressively dismantled. This, coupled with the nation’s industrialisation policies, has led to a gradual shift in the import structure in favour of intermediate goods (eg. textiles, petroleum) and investment goods as against consumer goods (eg. wheat, sugar, motor vehicles and electrical equipment).
Today, intermediate goods account for nearly 52 per cent of total imports while investment and consumer goods account for 27 per cent and 21 per cent, respectively. The demand for capital goods such as machinery, transport equipment and building materials for the development of Sri Lanka’s infrastructure is on the increase.

Japan supplies the largest percentage of Sri Lanka’s imports, mainly motor vehicles, spare parts and textiles, followed by India, the Republic of Korea, Taiwan, USA and the UK. Wheat accounted for 31 per cent of imports from the USA and other products included textiles, tools and accessories for the textile industry.

Relationships with other countries
Sri Lanka has friendly relations with all countries and is an active member of regional groups such as the South Asia Association for Regional Cooperation, Indian Ocean Rim Association for Regional Cooperation, and the Bangkok Agreement.

Sri Lanka has a free trade agreement with India that came into effect in March 2000, whereby certain goods manufactured and traded between the two countries could either enter duty free or at substantially reduced duty rates provided there is 35 per cent value addition in the transformation process. A similar free trade agreement is on the cards between Pakistan and Sri Lanka.

Tariffs, regulations and quotas
The Sri Lanka Government has liberalised import and export procedures. Import licenses are required for only a few specified items due to health and security reasons. These products include firearms and ammunition, drugs and pharmaceutical products, precious metals, alcohol, toxic and hazardous chemicals, pesticides meats and fresh produce. The import of illegal drugs is strictly prohibited. There are no export controls on most items other than coral and shells, wood and wood-based articles, ivory and antiques, which have been imposed due to environmental protection and the preservation of antiques.

All import/export documentation is in English. Labelling of all products and packages should be according to international standards and demarcated in indelible ink and in bold lettering. The handling points, weight and pressure points (centre of gravity) should also be indicated for containerised cargo to ensure secure and careful handling of shipments.
The Sri Lanka Health Ministry will impose a ban on genetically modified (GM) foods including products using GM ingredients. Licences will be required for import items such as:
soya-based products
maize/corn
tomato and tomato-based products
potato and potato products
bakers’ and brewers’ yeast
cheese and micro-biological starter cultures
Valid certification from the exporting country’s health authorities clearing the product of any GM ingredients will be required.

There are more than 1200 standards governing manufactured products, agricultural commodities, industrial raw materials and production processes set and enforced by the Sri Lankan Standards Institute. Sri Lanka has also adopted International Standards Organisation ISO 9000 standards for quality management and assurance, ISO 10011 standards for management audits and ISO 14000 series for environment procedures.
Sri Lanka has a three-band import tariff schedule based on the harmonised system of classification. The three bands are 5 per cent, 10 per cent and 25 per cent. In addition a surcharge of 20 per cent on import duty is also payable.
Import tariffs are waived for export-oriented companies, IT related projects and special infrastructure projects approved by the Board of Investment. The following imports also exempt from duty are:
textiles, yarn and other intermediate goods for the garment export industry
gold
gems
computers and software
telecommunications equipment
sports equipment
medical and dental equipment
agricultural seeds
machinery for use in the agricultural and fisheries industries
The government has introduced a two-band value added tax on all products and services:
Lower rate of 10 per cent on essential goods and services such as power, petroleum, essential foodstuff, fertiliser, pharmaceuticals and medical equipment, including industrial, agricultural and fishing equipment.
Standard rate of 20 per cent on all other goods and services.
The retail trade sector will be brought under the VAT system in 2003.
Labour laws and staffing
Sri Lanka is a member of the International Labour Organisation. The nation’s Department of Labour is responsible for the administration and enforcement of all labour laws. The Shop and Office Act stipulates working hours, overtime rates and holidays while other regulations govern minimum age, work hours, maternity benefits, social security, safety and health standards and workers’ compensation.
The labour force of 6.7 million people is considered highly literate with nearly 70 per cent concentrated in the southwest of the island. The minimum wage for unskilled workers ranges from US$50–100 per month and most workers prefer permanent full-time employment to casual or part-time work. Two-thirds are male, one-third female and both are entitled to equal remuneration and terms of employment. The average worker has eight years of basic education and a fair knowledge of English. The minimum employment age is 18 years and the retirement age is 55 years.
In a factory, office or shop, the typical working week is 45 hours. Any excess would be treated as overtime where penalty rates apply. It is statutory that employers contribute 12 per cent of an employee’s gross earnings to the Employment Provident Fund while the contribution from the employee is eight per cent. Employers also contribute three per cent of the earnings to the Employees Trust Fund.
Annual leave entitlements include seven days casual leave and 14 days vacation leave while medical leave is generally granted for 14–21 days at the discretion of the employer. Women are granted 84 days maternity leave for her first two children and 42 days for her third – all with full pay.
Although the right to unionise and collective bargaining is recognised by the authorities and employers, only around 15 per cent belongs to a union. Most foreign-owned operations and other large local industrial companies conduct negotiations with the assistance of the Employers Federation.

Investment laws
The Sri Lankan Government actively canvasses for foreign investment, which is permitted in most sectors, while most foreign exchange controls have been progressively dismantled. Up to 100 per cent foreign equity is permitted in the banking, insurance sectors and infrastructure development activities, while shipping, travel and freight-forwarding agencies are limited to 40 per cent. Tax and financial incentives have been granted to key sectors such as export, agriculture, IT related and large scale infrastructure-related projects to encourage private sector investment and involvement - both local and foreign in these areas.
The Sri Lanka Government offers a wide range of incentives for investors available to foreign and domestic investors without preference – provided the investment is undertaken through a company incorporated in Sri Lanka. Successive governments cannot change the incentives granted and commitments made by the Board of Investment.

Setting up a local office
Companies incorporated outside Sri Lanka may register a branch office in the country, subject to conditions, in order to establish an industry or a branch office for trade. Application forms are available from the Office of the Registrar of Companies.
Companies incorporated outside Sri Lanka may also apply to establish a liaison office for the purpose of market intelligence, planning and coordinating business promotion; technical support and quality control; sourcing raw material and manufactured products. The company must not engage in any import, export, trade or investment in Sri Lanka and must give a written undertaking on application that they will not do so in the future. The establishment of a liaison office needs to be registered with the Sri Lanka Registrar of Companies.
Infrastructure and telecommunications
Sri Lanka’s infrastructure is considered the best in South Asia. The Port of Colombo is one of the most efficient in the region. It has two modern container terminals equipped with state-of-the-art technology and an annual cargo handling capacity of 1.8 million, 20-foot equivalent units. The port has grown at an annual compound rate of 20 per cent per annum over the past 10 years and this trend is expected to continue. Efforts are currently underway to expand the Port of Colombo and build new ports in the south and eastern parts of the country.
Though small by international standards, the Bandaranaike International Airport is modern with a capacity to process up to three million passengers and 100,000 metric tonnes of cargo annually. There are daily connections to the Middle East, Europe, Asia and the subcontinent. With the assistance of the Japanese Government plans are underway to expand and develop the existing facilities to increase the present passenger handling capacity and double the cargo handling capacity. These improvements will include a new duty free complex, additional parking aprons, radar control systems, and new passenger and cargo handling terminals
Sri Lanka has a fairly well developed national road and rail network and plans are underway to modernise the existing systems and construct four new major highways. The electrification of the railway is also under consideration.
The telecommunications sector is another area that has seen much development in the past few years especially with the privatisation of Sri Lanka Telecom (SLT) in 1997. Currently there are land-based facilities operated by SLT, two wireless loop operators, pay phone operators, cellular operators (including Telstra, Hutchinson), and data and voice operators. The number of new telephone installations increased by 35 per cent to 40 per cent over the past three years and this trend is expected to continue.
Government efforts to promote the information technology sector will also see the introduction of wider bandwidth and high-speed links, new licences for another international gateway, fixed wire operator, Internet hub, cable television networks, transmission networks and a range of other services. The cost of telecommunications isn’t considered to be competitive when compared to the rates in Australia.
Sri Lanka is overly dependent on hydropower for electricity and recent drought conditions have resulted in a grave and critical power shortage, necessitating the exploration of alternate sources. The government is encouraging private sector participation in this area.

Taxation
Sri Lanka and Australia signed a double taxation agreement in 1991 whereby Australian companies operating in Sri Lanka receive a concessionary or zero tax breaks in Australia if they have paid taxes in Sri Lanka. In addition, reduced rates are levied on dividends (15 per cent), interest and royalty payments (10 per cent).

All Sri Lankan businesses are subject to taxation unless they have been exempted under special provisions for a specific period , eg. if they are companies approved by the Board of Investment. Both resident and non-resident companies are liable for a corporate income tax of 35 per cent with an additional surcharge of 20 per cent. Non-resident companies are also subject to an additional tax of 33.33 per cent on remittances of profits – limited to 11.11 per cent of taxable income.

Dividends declared from tax exempt profits are tax-free in the hands of the shareholder during the tax holiday period and one year thereafter. A withholding tax of 15 per cent is generally payable on all dividend income other than quoted public companies, though non-resident shareholders of public quoted companies would be subject to this tax.
Residents are taxed on a sliding scale from 10 per cent up to a maximum of 35 per cent while expatriate employees are taxed at a concessionary rate of 15 per cent for the first five years and thereafter are subject to the same rates as residents. Expatriates employed in flagship companies with investments of US$50 million or more would not be subject to any personal income taxes for five years.

Non-nationals aren’t subject to transfer tax on shares purchased on the stock market. The removal of stamp duty on all share market transactions, the abolition of capital gains tax, and exemption from income tax/capital gains on sale of debt and listed securities are some of the measures established to stimulate the stock market.

Finance
Sri Lanka is the first country in South Asia to liberalise the financial services, insurance and banking sectors. Since 1994 current account transactions have been exempt from exchange control regulations and there are moves towards further liberalisation. Accordingly, remittance of dividends, capital and royalty payments and stock market returns can be repatriated through any commercial bank.

The Central Bank is solely responsible for the implementation of the country’s monetary policy. It also issues legal tender and acts as a banker, supervisor and lender of last resort to all commercial banks. All commercial banks are highly competitive and offer a wide range of services. They are eligible to operate foreign currency banking units, assist local companies with foreign currency loans, and to conduct offshore banking for projects approved by the Board of Investment. The two development banks provide a range of services including medium/long-term project financing although foreign currency lending is not permitted. The rate of interest ranges from 16–25 per cent for rupee financing while for foreign borrowings the rate would be one or two per cent of the London Interbank Offered Rate.
The Colombo Stock Exchange, though small by international standards, is the most efficient in the region. Around 240 companies are listed. Daily transactions are recorded in investors’ accounts through a central depositary system. The debt market in Sri Lanka is still in its infancy and only a few leading local companies and financial institutions have raised capital through credit instruments such as commercial paper, corporate bonds and debentures. In 1999 Duff and Phelps set up the first credit rating agency in Sri Lanka.
The accounting and financial systems are based on the British Standards and the Institute of Chartered Accountants of Sri Lanka is vested with the authority to set accounting standards and procedures. Typically the financial year is from 1 April to 31 March. The major international firms such as PricewaterhouseCoopers, and Ernst & Young are all represented in Sri Lanka and a number of competent local accounting companies are also prevalent.
Marketing your products or services
Australian companies entering Sri Lanka should employ the services of a local agent or representative with a good network of connections in the same or a related field. A minimum investment of US$1 million is required from companies wishing to set up their own retail marketing outlets.
Product launches, press briefings and advertising, along with regular meetings with existing suppliers and prospective new suppliers should be carried out on a regular basis. Wherever possible promotional brochures and flyers could be disseminated.

Exporting online
The use of the Internet and e-communities has become an important tool in Sri Lanka and most businesses or companies conduct research and correspondence via the Internet. The large and forward-looking companies have their own websites.
Transport and distribution logistics
Sri Lanka’s strategic location at the centre of east/west maritime and air routes makes a gateway to the Middle eastern and Indian subcontinent regions. Some of the largest international freight forwarding, shipping and courier companies such as Scanwell, Fed Ex, DHL and Mersck operate in Sri Lanka. The documentation for cargo is generally handled by the shipping agent/freight forwarder and cargo is released within 24-hours if documentation is in order.

Can Colombo port emerge as mega hub of South Asia

Strategically located at the center of the Indian ocean just close to the main sea route from far east and Australia to Europe and America, Colombo is a major port of call for more than 30 main lines including almost all the top container carriers and more than15 feeder carriers. Most of the larger container carriers do not call the Indian, Pakistan and Bangladesh ports because they do not have sufficient depth and adequate port facilities to handle such vessels and also they are handicapped in other ancillary marine services vital for shipping trade.

However a few ports in India have developed container terminals enabling to service 3rd generation container vessels and a few other ports are planning to strengthen their container handling capacity with foreign investments.The Tuticorin Port Trust & PSA joint venture has developed two container berths with 370m length and 11.9m depth.Throughput in 2000 at Tuticorin was 156,978 TEUs*. Although Tuticorin is also at a good location similar to Colombo it has a limited depth of only 11.9m. and therefore it will not be a serious threat for Colombo which has a 15 m. depth. Jawaharlal Nheru Port Container Terminal (JNPT) also has been improved its capacity and container handling productivity with the investments by P & O. JNPT has 3 berths with 680m. length and 12m.depth and her throughput in 2001 was 607,000 TEUs*. Although JNPT had been able to attract some transhipment containers through direct services, due to draft limitations, it will not be able, with the current position to serve large main line operators. Port of Chennai which operates 3 container terminals with 600m. length and 13m. depth has handled 352,307 TEUs* in 2000. Although the container handling facilities at Chennai port are being planned to be further developed by P&O on BOT terms,due to draft limitation and Tuticorine’s more attractiveness to local cargo operations the chance of Chennai being developed to be a transhipment hub is not seen to be positive. Ports of Pipaw and Cochin in India , Karachi & Port Quasim in Pakistan and Chittagong in Bangladesh also have been identified as probable ports which could attract direct main line callers. Due to draft, hinterland and other restrictions the possibility of developing these ports to the hub level is doubtful. In view of above scenario any of the Indian sub-continental ports (ISC) cannot be compared with Colombo at this stage because the depth of all those ports against Colombo is lesser 3 to 4 meters and calling large vessels into such ports would be a very risky operation .In addition to above the ships’ requirements do not confine only for cargo handling facilities but for other ancillary services such as bunkering, ship repairs etc. as well. In this context Colombo is far ahead than the Indian sub-continental ports. Top of all that the deviation cost from the Main shipping route to these ports will be very much higher than that for Colombo. As such, some of these ports could be looked in as possible mini-hubs to take Indian cargo by feeder vessels to Colombo or any other major hub. Mega hubTherefore, the remaining major competitors for a regional mega hub port status in the south Asia region with Colombo will be Singapore, Port Kelang, Salala , Dubai and Aden. Let us examine the degree of competitive advantages / disadvantages of Colombo against Singapore ,Port Kelang , Salala and Aden.Except JNPT, Tuticorin and Chennai, all the other ISC ports largely depend on outside hub ports for the transhipment of their cargo. In the event of the introduction of giant container ships (8,000 TEUs to 18,000 TEUs) in the next few years to come (Lloyds List – 7th July 2000) and the concept of “Mega hub” with 17m to 21m depth becomes a reality all ISC ports will have to remain as feeder ports.In this context the Port of Colombo which is the closest hub to all ISC ports except for Kandla and Karachi appears to be having greater chances to be the Mega hub port in the ISC region.

Colombo is the cheapest regional hub in terms of Feeder cost and also offers the shortest transportation time. In the shipping world it is said that “time is money”. Minimizing the lay time and dispatching the vessel in time is of paramount importance because “once demurrage always on demurrage ”.ADB appointed study team which consisted of high caliber consultants from Germany, USA, Australia and Sri Lanka in their preliminary report on Colombo south port development states (pg3-23) that “ Colombo is the least cost hub for all ISC Ports except Kandla and Karachi both of which are more competitively served from Aden. This assumes that productivity at Colombo is at least the same, if not better than that of other hub ports.”However , the higher productivity and faster turnaround time might supercede the above advantageous. Interesting to note that Port of Colombo has adopted various measures to Improve its productivity and the turnaround time and encourage the shipping lines. Many incentive measures such as rebate schemes (T/S volume rebate, East Coast rebate, Handling Discount) and Free storage of 21 days for T/S containers etc. have been offered by the Port of Colombo to reduce the per unit handling costs. In order to encourage the customers the SLPA is in the process of entering into Port (Terminal) Services Agreements with Main Line Operators. As the first step the SLPA recently entered into a Terminal Service Agreement with Hanjin Shipping which is a major line serving Colombo port. In the near future the SLPA will enter into more such Service Agreements where volume handling will definitely put the shipping lines at a very advantageous position.ReformsAt Jaya Container Terminal (JCT), the recently introduced reforms, such as the Target Bonus System which is based on a constantly functioning Productivity Monitoring System. motivation of the workforce for working on public holidays such as the May day, Sinhala /Tamil New year day Christmas day, welfare measures including better transport system, skill development etc. had geared for considerable productivity and efficiency improvement. Recently in many occasions JCT had been able to achieve a Gantry Productivity of over 25 moves p/h and vessel productivity of over 75 moves p/h. South Asia Gateway Terminal (SAGT) also achieved similar productivity and efficiency. Both terminals together increased their daily handling volume tremendously during the recent past. On the 15-07-2002 both terminals handled 8,231 TEUs registering the highest ever per day volume in the port history. During the recent past Colombo has been achieving outstanding improvement in container vessel turnaround time as well. Container handling trade which suffered seriously with the imposition of the war risk surcharge after the terrorist attack on Katunayake Air port has now raised her cargo handling to a better position.. Transhipment box handling is also on the increase at a considerable rate.In the mean time The Sri Lanka Ports Authority recently converted its premier Container Terminal (JCT) from a government authoritative institute to a more liberalized and marketing oriented organization. The Queen Elizabeth Container Terminal is being developed and managed (on BOT basis for 30 yrs.) by the P&O led consortium; South Asia Gateway Terminals ltd.(SAGT). It is now in the process of extending ,re-equipping, and re-structuring the terminal. Three berths with 940m length and 15m. draft to handle 1 million TEUs will be completed towards the end of 2003. By now SAGT has completed 650m length with 15m draft and hopes to handle 600,000 TEU by the end of 2002. Unity Container Terminal -UCT (formerly known as the North Pier) also has been developed with two container berths with 340m length and 9 to 11m depth mainly for handling feeder vessels. The UCT would be fully operational with 3 quay cranes,8 transfer cranes and 45 prime movers & trailers with a handling capacity of 230,000 TEUs per annum. Developments More importantly, having realized the present developments of the global shipping industry the port of Colombo has taken several steps to expand the container handling capacity. The shipping industries searching for economic of scale to bring down the unit cost are now in the process of introducing Mega ships of 7000 TEUs and 12,500 TEUs to 18,000 TEUs with a length of 325 to 381m., a breath of 46m to 57m. and a draft of 14.5m. According to the orders that are being placed for new ships at present , significant number of vessels of 7,000 to 8,000 TEUs capacity with 325m. length, 46-50 m. breath and 14.5m. draft will come into operation before 2008.In view of above the Port of Colombo has taken initial steps to construct a newest container terminal (Colombo Port South Harbour ) with the intention of attracting mega container vessels. The proposed terminal will be fully completed with 12 berths in six phases of two years each over a span of 20 years and it will have a total capacity of 10 million TEUs. At the first phase, two berths with 720m to 800m length and 17m depth are expected to be completed by 2007. Thereafter at every phase , two berths of the same capacity will be completed. At later stages, remaining berths will be developed with greater length and 21m depth to meet the demand by mega vessel operators. These berths will be fully equipped with latest container handling equipment , modern automation systems and state of the art of technology. The South harbour of Colombo port once developed would be able to meet the growing demand for container handling in the South Asia region With above super infrastructure developments, supported by the skilled and reliable workforce and high quality ancillary services such as bunkering, ship repairs ,ship chandelling ,duty free shopping etc. the port of Colombo would be powerful enough to play the role of a mega port, offering comparatively a profitable service to the shipping lines operating ISC cargo than any other competitor in the region.

Will Sri Lanka loose its hub status and virtually be a feeder Port? Politics prevents ports progress, competitiveness in international shipping

It’s running out of time for Sri Lanka. Once Sri Lanka was way ahead of Singapore in 1960’s but lost its competitiveness due to lack of leadership from our political leaders who governed the country. Sri Lanka has a good potential to become the hub of the South Asian region, as it is located in a strategic position for major East-West trade routes. However, it is now uncertain because we are way behind schedule for building the ports to the required standards to be competitive. For example the ports of Colombo, Galle, Hambanthota, Trincomalee and not forgetting the KKS harbour even though it’s with wreckage from the North –East War where many gunboats were sunk by the LTTE. Trincomalee is considered one of the largest natural harbours in the world which most countries like India and the US having an eye over the port to have a stake, If Hambanthota had made ground it could had attracted many mainline vessels which travels in the main sea routes, as it is in a strategic location that could be a threat or competition to the world famous transshipment port of Singapore, where 225-275 ships pass by daily from the main shipping route, where only about 50 ships divert to Colombo Port daily. With the Colombo South port unable to make ground due to various political and economic uncertainties, it has been delayed by 3 years. If it had gone according to plan it would have commenced operations by end of this year.

Since the Government had not taken the necessary initiatives to construct the Hambanthota port, we are now about 2 -3 years behind schedule. As for India they are constructing a large terminal a the capacity of 4.1 million TEU’s (Twenty foot Equivalent Units) annually at a cost of US $ 1 billion at Vizhinjam, which is only 10 nautical miles away from the main shipping route. And also with the Sethsurendram Channel being exploited for construction, where big vessels could cut across and reach their ports without calling at the Colombo Port, Sri Lanka will loose its competitiveness, it once had.

For a country to develop its infrastructure it should be in a conducive environment, otherwise it will not be able to compete nor attract investors or tourists to the country. For example the air traffic is growing with passenger and cargo transportation seeing an increase where the current airport doesn’t have the capacity to handle. A need for a second international Airport had been a must for a long time, where it could be used for an emergency to land an aircraft. Since Sri Lanka did not have a second International Airport it was diverted to either Male or to India where additional amount of fuel had to be carried with an additional cost being incurred. Under the previous UNF government it was proposed to develop the second international airport at Wallawaya. After the dissolving of the parliament in 2004, and after PA coming into power it was decided to construct the airport at Weerawila in the Hambantota district. It was welcoming to see the laying of the foundation stone on the 19th of November, 2006 to celebrate the 61st Birthday of the President and the First Anniversary of the Presidentship of Mahinda Rajapakshe. I hope it will not be like other projects where only the opening ceremony takes place and afterwards no progress is made to implement the project to make it a reality. This momentous project will create new employment opportunities as well as promote tourism and attract industries to the province, thus providing a valuable boost to the local economy of the region. With the implementation of the Ruhunu Open Skies Policy, which offers a variety of aerial activities such as hang gliding, powered hang gliding, Para gliding, Para jumping, Sail Para flying, Ballooning, Float Plane operations and Micro and Ultra light flying will further enhance the tourism and leisure industry by providing an ideal opportunity for aviation enthusiasts to explore and experience the marvels of the open skies from Kaluthara to Arugam Bay in Batticoloa. Further the railway and the road network should be in a good condition. In 2002 the government led by Prime Minister Ranil Wickramasinghe drew up a plan of mega 64 projects which will benefit the country from north to south and from east to west, including major infrastructure projects. Some of them were the Norochcholai, Trincomalee Coal fire projects, Hambantota Port, Oil refinery and the highway connecting main cities like Trincomalee and Colombo which we could have attracted tourists and big investors invest in industries by setting up business plants in the region. Still the inner Colombo highway, Colombo – Matara highway and Colombo - Katunayake have not been completed due to various problems.

Recently Sri Lanka saw a paradigm shift in its political culture where both major parties came together to solve some of the critical national issues the country was facing. This was welcomed by most of the people in the business community and others in the civil society. As one of the key factors in the agreement between the UNP and the PA was the burning issue in the North East ethno-political crisis which is existing for the last two and half decades. The country can not afford to go on like this forever, there has to be some compromise wherever possible if we are to have peace in the country in order to go in the journey of development in all aspects including social development leading to sustainable economic development.

If peace is achieved Sri Lanka has the potential to attract tourists from many high spending countries that now doesn’t come to Sri Lanka due to the present crisis. To illustrate this point we could take Maldives for example, what do they have? They have the basic Sea, Sun & sand whereas we have more to promote. Sri Lanka’s rich culture and heritage, the mountains in the cool climate where one could travel just in a few hours, lovely beaches surrounding the island, etc. If not for the war in the North & East Sri Lanka too could be developed to attract tourists. I too visited Jaffna last September. We could adopt the same concept what the Maldives adopted, by having water bunglows and resorts adjoining the beaches in the North & East coastal belt. Further, we could promote water sports at these areas where many tourists prefer. Trincomalee is among the best of the places. It’s a beauty, the largest natural harbour, where even the biggest of containers could reach without any difficulty, if proper infrastructure is in place. We could convert Trincomalee into an economic zone by having the Oil tank farm, Cement factory, a Coal power station, and we could attract the Trincomalee harbour to get larger container vessels to operate, to handle both containers and cargo. Hambantota too situated at the southern tip of Sri Lanka at the point closest to the main East-West shipping route. If the proper infrastructure is in place with modern equipment and terminals it could compete with the Singapore, Dubai, Salalah, Port Klang and Tanjung Pelepas Ports by handling both cargo and containers. In the other end of the KKS harbour, the wrecks due to the war where navy gunboats have been sunk and large ships couldn’t approach since the wrecks are there. Now the goods have to be brought to shore by barges where it’s time consuming. Earlier the Dutch government gave grants to remove the wrecks away so that ships could reach the shores without any difficulty, but Indian authorities have interfered and said that they will take out the wrecks inside the harbour and construct the breakwater whereas the Dutch government gave support to take out wrecks both inside and outside and to construct the breakwater. The idea behind these scenarios is that India wanted to promote their ports by constructing the Vizhinjam port and by dredging the Sethsurendram channel which will affect the Sri Lankan Ports and by this action Sri Lanka will be in isolation in the international shipping. Vizhinjam port has a natural draught of 24m which could berth large vessels.
The Port of Colombo which has two operators both government and private the JCT (Jaya Container Terminal) and SAGT (South Asia Gateway Terminal) respectively will run out of capacity in the years to come with the ever increasing and growing shipping industry. If the Sri Lankan government doesn’t take any action to build the Colombo South Port it will definitely loose its Hub status and we will be merely a feeder port very soon. We urgently need the successful introduction of private investors to handle terminal operations in the port. The success of SAGT further proves the ability of Sri Lankan companies to add value to large scale infrastructure projects. So this paves the way for the private sector to get involved in the infrastructure development projects in the country. Also, these projects could be listed in the Colombo Share Market where private companies as well as the public could invest in the country’s development, whilst helping the government to find funds to implement these high cost infrastructure projects. Thereafter market capitalization would increase and foreign investors would get attracted to supply funds to our share market.

According to Mr.Rohan Masakorala’s article published on the November 6th Daily Mirror Financial Times, when going back in history, the Port of Colombo had to be ready for 8000+TEU ships by 1996. However it never materialized. Oluville was the next hub after Hambanthota where a beautiful book was released called the “National Ports and Shipping Policy of Sri Lanka” in 1997. During the same period of time, in theory on paper and on political platforms, Sri Lanka was building the highest number of ports in a single country, namely, Oluville, Hambanthota, Galle and Trincomalee, to handle various types of ships. While Colombo was neglected ignoring its paramount requirements and there by gradually taking away its status as one of the leading ports in the region while it was ranked the 21st port in the world in terms of volumes handled. Our thanks go to the courageous decision taken by the late Mr. Lalith Athulathmudhali who developed and increased the capacity of the Colombo Port to become the 21st from a rank of 134 in the seventies, but now the Colombo Port is ranked only 36th in the world.

Interestingly while we were building ports during the last decade or so in books and in theory, countries like Dubai, Oman, Malaysia and even India took the initiative to actively drive forward and build new ports which are very well established and are way ahead of Colombo in terms of technology and capacity. As a result Colombo is no more listed by international magazines on their top 30 ports. So where have we failed? Today the marine industry is managed by people who do not know the industry, for those who don’t know the marine hub I humbly request you to look at Singapore and Dubai and see what they offer as real hub ports to attract global players.
For all these to happen there should be peace and stability. Without peace and prosperity neither ships nor airlines will touch Sri Lanka. If it does happen the sky will be the limit for our country, where development will go beyond our horizons to the deep blue Indian Ocean.

Positive Destination Marketing A Must For Ailing Tourism Industry For Sri Lanka.

Sri Lanka known as Ceylon, Taprobane, and Pearl of the Indian Ocean has a rich culture and a heritage as history reveals to us. But due to some Negative impact on our beautiful country we have been deprived from this. The reason is none other than the waging civil war in our country for the last two and half decades. Other countries in the region have done well to develop their destination to the world. For instance take Mauritius, Maldives being smaller countries has been able to target high spending tourists from the European tourists markets. If you look closely into their macro economy what do they have when compared with our country, I could say they have nothing. Sri Lanka has much more to offer. Beginning from the sea sun and sand, to culture heritage, eco. Biodiversity etc you name we could offer by segmenting and targeting to the correct audience.

We could develop our strategy by adapting to our branding strategy by moving into multi-branding strategy. We Brand our destination as “Land like no other” same as “Malaysia Truly Asia” & “Amazing Thailand”. But at the same time we should develop multi-branding strategy by selecting places of interests such as Kandy, Cultural Triangle, Dambulla-Sigiriya, Anurudhapura-Pollonnaruwa, and beaches in the south, eastern beaches in Trincomalee (Nilavali) Batticoloa (Arugam Bay), Nuwara-Eliya etc. Also we could develop and build our North & Eastern Coasts by constructing beach Hotels and beach resorts like in Maldives by developing water bungalows in the calm coast with a panoramic breathtaking view.

The Tourist Board is interested in improving Eco-Tourism, MICE Tourism, Hard and Soft adventure, Agri-Tourism, Spa/Health and Cruise Tourism where the latter is becoming more demanding and famous through out the country. Hotels such as Kandalama have won numerous awards for its Eco friendly nature.
In addition, the hospitable nature of Sri Lankans is an appeal to the discerning traveller. The feeling throughout the country is welcoming and kind despite the ethnic conflict which is prevailing in the country. Their sparkling smiles, Genuine kindness and Good service, is definitely recognized as a strong asset when promoting Sri Lanka as a tourist destination.

ECO TOURISM
Eco-tourism is an activity which is developing rapidly and growing fast in Sri Lanka. Sri Lanka identifies Eco-tourism as “Responsible travel to natural and cultural areas that conserve the environment and improves the well being of local communities”. Eco-tourism is often misinterpreted as a nature based activity only, but it is related to many activities such as Nature/Culture Observation & interaction, Water Adventures/ Ecotourism, Land Adventures/Ecotourism, Wildlife Viewing & Understanding and Community based Ecotourism/Eco-Agro Tourism (which is linked to the social values of Eco tourism). Sri Lanka can be regarded as a blessed country as it has all resources favourable for eco tourism activity. It is a diversified country which specializes in many areas. Sri Lanka has a tremendous landscape and natural features, plant and wild life species which are also found globally. However, the unique feature that must be mentioned is the great bio diversity that such a small island holds; it is in fact considered as an international “hot spot” of bio diversity. The country harbours 435 species of birds (23 are endemic), 92 species of mammals (14 are endemic), 242 species of butterflies (42 are endemic), 107 species of fish, and many more species of amphibians, reptiles, snakes and others. The diversity of flora is also high as it has over 3,000 species of flowering plants, besides many other types. It is also notable that 5 out of 7 turtles in the world can be seen in Sri Lanka. When cultural diversity is added to this mix, Sri Lanka stands apart from most other destinations. Sri Lanka has designated 13% of its land area for wild life and nature conservations, places such as Yala, Bundala, Udawallawe, Sinharaja etc. It also has 7 world heritage sites such as Annuradhapura, Galle, Kandy, Sinharaja Forest, Dambulla, Polonnaruwa and the Sigiriya Rock which are of international tourism appeal. One of it is a natural world heritage sites the Sinharaja Forest, which was also declared a Man and Biosphere (MAB) in 1989. In addition there are a range of hard and soft adventure activities such as trekking, camping, wild life safaris, bird watching, white water rafting, scuba diving, cycling, mountain climbing and so on which appeal to the various categories of eco tourists. Many eco tourists visit Sri Lanka as part of a commercial tour package. Such packages focus on particular interest such as birding, incorporating cultural sites, many types of wild life viewing or soft ware activities. While the above mentioned places attract eco tourists it is depressing that only 10% to 12% of tourists visiting the country actually visit these places. Many eco tourists have placed Sri Lanka as a destination which has capability and potential to grow as it is a diversified country with many resources but does lack coordination in key areas such as the marketing strategy it adopts, infrastructure facilities which is poor & not maintained, environmental protection policies are not clearly conveyed to tourist and properly implemented, planning and development & construction (town / city planning) should be done more accurately and there is also clearly a lack of training and awareness.

MICE TOURISM (Meetings, Incentives, Conventions & Exhibitions)
`MICE tourism is far by one of the lucrative niches of tourism. Sri Lanka has a major advantage compared to other countries as it is easily accessible from major parts of the world. However, Sri Lanka has always been a popular venue for conferences and meetings in South Asia even when the ethnic conflict was witnessed a few years back. Now with the 20 years of conflict been put to an end and peace prevailing in the country MICE tourism has great potential to grow. The Sri Lankan Convention bureau, the government authority which promotes MICE tourism for Sri Lanka has recognized a growth of 80% in hotel occupancy in Colombo and approximately about 60% of those in resort areas.

To promote Sri Lanka as a MICE destination, the bureau has launched a special campaign called ‘Meet in Sri Lanka’. This program has already been launched in countries such as Singapore as ‘Meet in Singapore’ & in Hong Kong as the ‘city of life’ campaign. In addition a brand new CD that provides information on Sri Lanka as a destination along with specific details for meetings, conferences planners and organizers has also been designed and released. The bureau is also conducting these programs in Pakistan, Singapore, and Malaysia and in cities of Bangalore, Hyderabad and Mangalore during the upcoming quarter. The Far East is also especially important as regional travel is on the rise and Sri Lanka is becoming a popular tourist destination. As part of the program to boost foreign currency to Sri Lanka, a land mark agreement was signed the Colombo City association and the Sri Lanka Association of Professional Conferences to charge minimum room rates for conferences and meetings. Plans have already been made to hold more conferences in areas out side Colombo, which is a positive sign because Colombo already is congested. With the ethnic conflict being put to an end Sri Lanka has great potential to grow as a MICE destination. But we need to build more of these places. Until recently only BMICH and SLECC was there. But these locations didn’t have enough capacity to accommodate large crowds with proper parking facilities which can accommodate more than thousand people like in other developed countries. Where recently the Waters Edge had been constructed and many events take place at the Waters Edge. And also proper planning for a larger gathering should be built outside Colombo. And proper Transport facilities should be planned with greater emphasis made on logistics planning such as rail and road transport system in the country, where it will lead to socio-economic development in the country.

BOUTIQUE HOTELS
In the recent periods the Tourism industry has changed into boutique Hotel concept, where it is being targeted at niche markets at the upper end of the market. Currently Sri Lanka is doing well in this regard but could be developed immensely with more room beds and hotels in this nature. Some of the popular boutique hotels in Sri Lanka are Elephant Corridor, Vil Uyana, and The Fortress etc. There are so many potential sites across the country in Uva and North Central provinces. By constructing more of these types of hotels we could capture more foreign currency to the country.

AREAS IN WHICH THE TOURIST INDUSTRY NEEDS
IMPROVEMENT

Sri Lanka is regarded as a diversified country with many resources. The country definitely has many resources to make Sri Lanka the most famous tourist destination in the world, but having resources it self is not a key criteria to make a country productive, it also needs to be efficient and effective when utilizing its resources. This is one of the major constrains that the country faced in the past and still seems to be facing, mainly due to the severe ethnic clash witnessed in the country for the last 20 years. Due to this reason the Sri Lankan economy has become unstable and growth in potential and key areas such as the tourist industry has been put on hold. As a result the tourist industry in Sri Lanka is lagging a few years behind other countries. As mentioned previously accommodation is already becoming a problem as more tourist arrivals were recorded during the last couple of years, since the cease fire agreement between the government and the LTTE was put into effect. If the conflict is put to an end and peace is restored in the country there will definitely be more tourists visiting the country, therefore the country should get prepared to accommodate all tourists and also make them welcome and comfortable. Sri Lanka has got many exclusive hotels but most of them seem to be placed around the city. The few exclusive hotels which are situated out station such as Elephant Corridor, Habarana Lodge, Taj Exotica, Mahaweli Reach, Light House Hotel, and Kandalama Hotel etc. have only a few rooms to offer its visitors. To overcome this problem the Tourist Board is hoping to construct more hotels outstation and to expand some of the existing hotels. However this would only be possible if foreign aid and investment is made to the country, which will greatly depend on the progress of the now stalled peace process. Another key area which needs emphasis is the infrastructure facility in Sri Lanka. The internal infrastructure such as roads, rail boat and domestic flights are rather poor in the city as well as in rural areas. Tour companies do provide good quality coaches but due to severe road traffic, journeys within Colombo become very tiring & rather exhausting to the traveller. If sea planes &/or hovercrafts are used to carry out airport to resort transfers, traffic could be reduced by a great extent. The lack of airlines is also another problem for only one national carrier ‘Sri Lankan Airlines’ is available, which makes 50% of the air lifts per week to Colombo. Also they should look at introducing boat / ferry services on canals, lakes and rivers why not implement a boat service in sea and reduce the congestion on the main roads by constructing jetties from Colombo to Moratuwa as a pilot projects and if it’s a success we could expand to other congested areas as well. This is done in Maldives between islands but we could implement in the cities as well. There is potential to improve in these areas, but, as mentioned above, resources should be carefully planned and put to use, thereby making the out come more effective and productive. As good health facilities are not available out of Colombo it is important during an emergency to transfer the patient/(s) as soon possible to the hospitals based in Colombo. For emergencies such as this, it is important to have good communication and infrastructure facilities in the country. This should definitely be the first improvement they make within the country. Hotels also lack qualified management staff which makes efficient running of hotels difficult. In most occasions tourists find it difficult to communicate with the employees in the hotels. These are minor problems which, if corrected, could bring about a major positive change. Therefore, this should be addressed as soon as possible to provide better services to customers. To overcome these problems, employees should be given intensive training in hotel schools even if it is expensive for the respective hotels, as it would be a long term investment with significant spin-offs. Another major problem is the harassment of tourists by beach boys and touts in the Southern coastal areas. A current survey indicates that 45% of tourists complain of harassments by beach boys. Also all new hotels must have waste and water treatment plants. Another issue that has to be addressed is the poor implementation of environmental policies/ awareness. There is waste dumped every where even in the main city of Colombo, and very little recycling is being done through out the country. If Sri Lanka is to be marketed around the world as a tourist destination this is yet another issue which has to be looked in to. Sri Lanka should have litter baskets every where and pasting of posters and waste should be banned. Anyone misusing state property should be fined like other countries do. There should be more rules, regulations, law and order enforced in the country. Sri Lanka, as mentioned above, is a diversified country with sea and sand, Eco-tourism, adventure, pilgrimage, agriculture, industrial, urban, Historical-archaeology, Colonial, festivals and sport are in abundance but, it is depressing that most of these aspects are not highlighted when promoting the country as a tourist destination. It clearly lacks management strategy, insufficient research and investment, variable quality and lack of interest and enthusiasm in the country. If the ethnic conflict in the country is resolved there definitely would be more opportunities and potential for the tourist industry in Sri Lanka to grow as a tourist destination and be highlighted as one of the best among other tourist sites in the world. If proper mechanisms are put in place we could do much better than Maldives, Mauritius and even better than Bangkok in Thailand etc.
The table shows the trend of tourist arrivals and their spending trends and the number of people who are employed either directly or indirectly.

Sri Lanka has the potential to be marketed as a high end up market destination with the others like Maldives, Singapore Malaysia, and Bangkok in the region. It lacks the proper infrastructure and the political leadership to harness the potential. The main reason is the on going ethnic war for the last 25 years in the country between the government forces and the LTTE rebels. Considering the Trincomalee harbour it self is a fact that it’s supposed to be one of the largest natural harbours in the world and also major tourist attractions where it’s a eye smoothening site in the beach and the corals are being located. So are we allowing our petty minded politicians to tarnish the countries image by allowing it to be named a pariah state very soon by the way the things are happening. The 26th of March saw another chapter in our ethnic war where the terrorists used its air power to demonstrate their vulnerability to the rest of the world. Due to the recent Tiger air raids in Colombo the tourist industry has recorded many cancellations and tourists are not coming to visit Sri Lanka. Also our only international airport is being closed from 10pm to 4am as a precautionary step. This is a major negative impact on the tourism industry. So think a minute and try to make a change so our beloved country will be a better place without hatred or abductions and killings. The high spending Tourists from the EU, UK and the other countries will come to visit Sri Lanka to marvel at the wonders that God has created to us Sri Lankan, where we should be proud of. We need to segment the market on inspirational needs and the behavioural patterns of the many thousand travellers, whilst developing niche market segmentation for our tourism industry.

What about the Thoppigala Capture is it really worth the trouble......?

on the 11th of July 2007, the Sri Lankan Armed forces captured the Thoppigala from the clutches of the LTTE. is it really worth the trouble and the lives lost...............? It was a large Jungle spreading ito hundreds of sq.km's. of thicjk jungle without any villagers where people arnt living.
Now the govt has to spend more resources to maintain what they captured where nearlky 10,000 troops will be required to guard the area. And also the govt is going to recruit 50,000 soldiers to the security forces. here they will have to spend Rs 7.2 billion for the salaries alone.
The easatern thearter is an important location where there is a harbour in trincomalee and other economically valuable locations where we could transform into Tourists attractions too. The cultivation and the many lakes which runs through the eastern province are also important for the livelihood of the pooor farmers and other population who are living in the area.

the next couple of months/ weeks will unfold the govt plan or strategy whether they're going to capture the North as well or the strategy........ with major development projects planned for the east in the SL.

The time will tell whether this is a gimmick to gain political milage to the president or to see whether its genuine call.

Ranil leave the country to USA for a 6 week tour.

Opposition leader Mr. Ranil wickramasinghe will be leaving the country, as the chairman of the Asia-pacific Democrat Union to hold a conferance in USA.

He has gone by giving his contact details to the SL President H.E Mahinda Rajapaksha, if he wants Ranil to help him. to build a southern consensus. that he could come in short notice from USA. This will prove that his true gentlemanship towards the country, and his consistancy he has in his vision and the policies.

The UNP facing crisis among the party hirachy, where as Mahinda Wijesekara and S.B Dissanayake who joined recently joined the UNP after they left the PA in 2001. Ranil should have taken this bold steps before, now its too late. UNP should build the grass root levels of ther party. where they were lacking the confidence. also the LTTE who boycotted the election platform in November Presidential elections and also the southern voter base which has benn de listed by the JVP supporters fromthe UNP voter base where over 300,000 voters were eliminated by using their franchise.

Ranil Wickramasinghe has twice run unsuccessfully for the office of Sri Lankan president.

He lost to Mahinda Rajapakse in 2005 and Chandrika Kumaratunga in 1999.
Mr Wickramasinghe became Sri Lanka's prime minister in 2001 and negotiated a ceasefire with Tamil Tiger rebels aimed at ending the country's long-running ethnic conflict.
But he lost power in 2004, after Mrs Kumaratunga called early elections.
During his term as prime minister, he began peace talks with the Tamil rebels, even offering a power-sharing deal.
But both Mrs Kumaratunga and Mr Rajapakse accused him of being too lenient with the Tamil rebels and of offering them too many concessions.

Power struggle
Mr Wickramasinghe first became known as the nephew of Sri Lanka's first executive president, Junius Jayewardene.
A lawyer by profession, Mr Wickramasinghe comes from an affluent family of politicians and businessmen.
He was first elected to parliament in 1977 and quickly moved up the party ladder after Ranasinghe Pramadasa was elected president in 1989.
He was made the minister of industries and leader of the house, and then went on to be prime minister for 16 months until Mrs Kumaratunga's People's Alliance coalition came to power in 1994.
In the same year, he became the leader of the United National Party (UNP) when Gamini Dissanayake was killed by suspected rebels of the Liberation Tigers of Tamil Eelam (Tamil Tigers).

The Tamil rebels agreed to ceasefire with the government last yearMr Wickramasinghe improved his party's image by appointing a disciplinary commission to get rid of corrupt party members.
He tried to change his personal image with various different haircuts to give himself a more appealing look.
He also tried to broaden the UNP's public support by touring many villages.
The threat of Tamil violence dogged Mr Wickramasinghe, as it had done his predecessors.
He narrowly escaped assassination when a bomb went off at a meeting he was addressing in the town of Eppawala.

Promises
Mr Wickramasinghe lost in the presidential elections in December 1999 in what observers said was a sympathy vote for President Kumaratunga after she was injured in a bomb attack.
In his 2001 election campaign, he pledged to curb presidential powers.

President Kumaratunga has accused Mr Wickramasinghe of being lenient to the rebels
The divisions between the pair drove Sri Lankan politics for more than a decade, but became even more apparent after the election.
Mr Wickramasinghe is credited with pushing the country through an impressive economic transformation, and is generally backed by the business community.
He managed a ceasefire between the government and Tamil Tiger rebels - ending 20 years of civil war - brokered by Norwegian mediators in February 2002.
The Tigers dropped a demand for independence in favour of regional autonomy.
But differences between Mrs Kumaratunga and Mr Wickramasinghe over the approach to the peace process continued to harden.

JHU, JVP reject Geneva agreement in All Party Conference

Sinhala extremist parties, Jathika Hela Urumaya (JHU) and Janatha Vimukthi Peramuna (JVP), during the All Party Conference (APC) held Monday at the Old Parliamentary building in Colombo submitted separate memoranda rejecting the agreement made between the Government of Sri Lanka and the Liberation Tigers in the talks held in Geneva on 22-23rd February, parlilamentary sources said.



Leaders and representatives of all political parties except Tamil National Alliance (TNA) participated in the conference. TNA was not invited.
Leader of Sri Lanka Government delegation, Minister Sripala de Silva explained the details of Geneva talks.
Somawanse Amerasinghe, leader of JVP, speaking at the conference said, "Geneva talks did not adhere to the Mahinda Chintanya but instead was conducted according to Norway's wishes. Norway has succeeded in fulfilling the demands of the Liberation Tigers. If the Government disarms armed groups is agreed in Geneva, it should also disarm the LTTE. Future talks should ensure that the Cease Fire Agreement (CFA) is corrected and amended."
Mr Amerawanse also said, the Sri Lanka Government should urgently strengthen Sri Lanka's military.
Leader of JHU, Ven. Ellawala Medananda Thero, speaking at the Conference said that JHU will strongly oppose any effort to disarm any armed group and that the next round of talks should be held in Colombo.