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Sri Lanka faces challenges in mega project implementation

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More than 300 contracts connected to 35 mega projects were suspended last year, and Rs. 2.3 billion was demanded as compensation by contractors for just nine of them, the Finance Ministry’s Project Management and Monitoring Department (PMMD) says, adding there is a probability that claims will also be submitted over another 22.

A total of 37 projects achieved no physical progress during the last quarter of 2023, according to the PMMD’s latest report released last month.

Among them are 17 projects out of 33 for which foreign disbursements were stopped.  Implementation delays are reported in 41 other projects owing to the poor performance of contractors. As this issue prevails in about 20 percent of total projects, it is important to consider the performance of contractors as a criterion for the renewal of their registration to resolve the repetition of this issue, the report states.

The PMMD’s latest data come amidst strong words in the International Monetary Fund’s (IMF) Governance Diagnostic Assessment, which pointed to recurrent problems in how successive Sri Lankan governments carried out mega projects.

Citing the PMMD’s 2022 fourth-quarter report, the multilateral lender notes that the most common issue affecting implementation is the delay in receiving allocation and imprest, “which proves that projects have commenced without appropriate budgetary allocations in the annual budget.” Another was the delay in land acquisition, it states, “again showing that projects are initiated without actually being ready”.

There are also procurement-related matters, the absence of performance indicators and outputs and the poor performance of contracts. And the Ministry of Finance “lacks basic information on projects, including the expected revenues and the potential cost of early termination given the limited data provided on projects and problems accessing necessary data”.

The PMMD’s new report says that delays have been a common practice, with “no evidence reported on actions taken against the responsible parties who have not taken appropriate steps for time management in projects, resulting in the failure of economic plans formulated based on the expected benefits of projects”.

The time period agreed upon for delivering outputs in an astounding 99 projects had lapsed at the end of last year while 20 of them obtained extensions beyond four years. Thirteen projects have not met even 25 percent of the expected target, even after more than half the project period, the PMMD notes.

For the first time, the PMMD has identified 30 projects that faced major implementation delays, including the Irrigation Ministry’s Uma Oya Multipurpose Development Project, which was inaugurated this week after ten extensions.

Another flagged project is the Irrigation Ministry’s Asian Development Bank-funded Mahaweli Water Security Investment Programme, the scope of which was drastically reduced by withdrawing 11 out of 21 packages owing to failure to execute them within the planned timeframe as well as the inability to begin new contracts in a restricted financial situation.

“The most complex tunnel construction package, which is currently ongoing and achieved about 20% progress, should be completed within 18 months and the balance loan amount of USD 159 million should be disbursed during this period Otherwise, that loan amount will be cancelled without any use.” the PMMD warns.

(sundaytimes.lk)

(Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)

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UK’s relaxed trade rules to boost SL exports

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The Government of the United Kingdom (UK) has unveiled a package of reforms to simplify imports from developing countries like Sri Lanka after upgrades to the Developing Countries Trading Scheme (DCTS).

The changes, announced as part of the UK’s wider Trade for Development offer, aim to support economic growth in partner countries, including Sri Lanka, while helping UK businesses and consumers access high-quality, affordable goods.

New measures include simplifying rules of origin, enabling more goods from countries such as Sri Lanka, Nigeria, and the Philippines can enter the UK tariff-free, even when using components from across Asia and Africa.

These changes are expected to be in place by early 2026.

This move strengthens Sri Lanka’s position in its second-largest apparel market, supporting exports, jobs, and economic growth.

The British High Commissioner to Sri Lanka, Andrew Patrick, said: “This is a win for the Sri Lankan garment sector, and for UK consumers. With the UK being the second largest export market and garments making up over 60% of that trade, we know manufacturers here will welcome this announcement.

“We want Sri Lanka to improve the utilisation of the UK’s Developing Countries Trading Scheme for a wider range of goods, not just garments. With the Sri Lankan government’s ambition to grow exports, and with the simplification of rules of origin for other sectors too, we strongly encourage more exporters to explore how they can benefit from the preferences offered by the DCTS. The UK remains committed to working towards creating shared prosperity for both our countries.”

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Pakistan police arrest 149 including 2 Lankans in ‘scam call centre’ raid

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Pakistan police have arrested 149 people in a raid on a scam call centre, the country’s National Cyber Crime Investigation Agency (NCCIA) said on Thursday.

The agency told the BBC it acted after a tip-off about the network, which was operating in the city of Faisalabad.

It said the centre was involved in Ponzi schemes and tricked people into handing over vast sums of money in the name of fake investments.

Those arrested included 78 Pakistanis, 48 Chinese nationals, eight Nigerians, four Filipinos, two Sri Lankans, six Bangladeshis, two Myanmar nationals and one Zimbabwean national.
Eighteen of the 149 were women, the agency added.

A copy of a police report said victims of the alleged scam would initially receive a small return on their first investments, before being persuaded to hand over larger sums of money.

“The charged individuals ran WhatsApp groups where they lured ordinary people by assigning small investment tasks like subscribing to different TikTok and YouTube channels,” the agency said.

“Later, they shifted them to Telegram links for further online tasks requiring larger investments.”

Pakistani citizen Muhammad Sajid told BBC Urdu that he was added to a Telegram channel with tens of thousands of members and was impressed by the company’s work. He said he gave them more than 3.138 million rupees ($36,600) in various instalments.

The raid, which took place on Tuesday, saw authorities seize hundreds of computers, servers, cryptocurrency exchanges and foreign SIM cards from the site.

On Wednesday, 149 suspects appeared in court, 87 of whom were handed over to the NCCIA on a five-day physical remand.

A further 62 suspects have been transferred to the district jail on judicial remand until 23 July.

The agency said the raid was at the residence of Malik Tehseen Awan, the former head of Faisalabad’s power grid, who has not been arrested.

(BBC News)

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Milk tea price upped by Rs. 10

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The All Island Canteen and Restaurant Owners’ Association has announced a Rs. 10 increase in the price of a cup of milk tea.

Association President Harshana Rukshan stated that the decision was made in response to the recent rise in the price of imported milk powder.

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