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Time for reform? Finance Minister Ravi Karunanayake glances at his watch during the news conference before heading to Parliament to present the Appropriation Bill for 2017 - Pic by Sameera Wijesinghe
By Charumini de Silva
Giving the strongest indication yet that Sri Lanka might be seeing light at the end of the debt tunnel, Finance Minister Ravi Karunanayake yesterday confirmed a viable Chinese partner had been found to forge a private-public partnership for the Hambantota port that would include transfer of debt and an agreement would be inked next week as well as the short-listing of four potential investors for SriLankan Airlines.
“We have found a viable partner to revive the Hambantota Port. A Chinese company has come forward to take 80% of the stake, while the balance will be with the Sri Lanka Ports Authority (SLPA),” Finance Minister Ravi Karunanayake told reporters at a special press briefing held at UNP headquarters ‘Sirikotha’.
He pointed out that this was a result of the efforts made by Prime Minister Ranil Wickremesinghe, adding that the Government is upbeat about the opportunities to resolve and turn around all outstanding ‘white elephant projects’ by the previous Government into economically viable ventures.
Building on the Prime Minister’s statements last week where he said a partner had been found for a debt-equity swap for the Mattala Airport, the Finance Minister said the inflow of funds from the Hambantota port would boost foreign reserves significantly,.
Karunanayake promised that the partnership would result in an inflow of $ 1,100 million worth of investment.
In addition, the Minister also revealed that the Government had shortlisted four major airline companies to revive debt-ridden national carrier SriLankan Airlines. “We received a total of 10 expression of interest (EOIs) where seven companies were selected and now we have shortlisted four. We will announce it in another two weeks’ time,” an upbeat minister said.
Private equity firm TPG and fund company BlackRock Inc were among half a dozen firms which have shown preliminary interest in a 49% stake in loss-making SriLankan Airlines, Reuters reported earlier this month.
Noting that Mihin Lanka employees had recently expressed distress over losing employment through the decision made to merge the two firms, Karunanayake explained that the decision was taken on the basis of pinning down the losses of the airlines.
“As a Government we want to create employment and not curtail it,” he added.
The Minister assured that the Appropriation Bill for 2017 was presented in “the true spirit of collaboration” after several rounds of meetings between President Maithripala Sirisena, Premier Ranil Wickremesinghe and himself. Karunanayake also assured that “there will be no amendments this time.”
Allocations for a number of key ministries, including those governing defence, healthcare, provincial councils and local government bodies, were reduced in the Appropriation Bill 2017 presented to Parliament yesterday, with education seeing a 58% reduction from Rs. 185.97 billion in the 2016 version to a proposed Rs. 76.94 billion this year.
Most notably, allocation for the Defence Ministry too recorded a marginal decrease for the first time since the war ended over seven years ago. Moving the motion, Finance Minister Ravi Karunanayake sought approval to raise and spend Rs. 1.819 trillion next year to meet the capital and recurrent expenses of the Government.
Among the key areas that saw an upsurge of funds were the allocations planned for the President and Prime Minister compared to considerable reductions in the allocations for defence, healthcare, education, provincial councils and local government bodies.
The allocation for the President doubled this year to Rs. 6.4 billion from Rs. 2.39 billion in 2016. However, this amount is still lower than the Rs. 8.7 billion allocated in the last Appropriation Bill presented by the administration of former President Mahinda Rajapaksa.
The allocation of funds for the Prime Minister also increased to Rs. 1.2 billion from Rs. 486.1 million this year. Apart from increased budgetary allocations for the President and Prime Minister, Appropriation Bill 2017 proposed increasing the allocations of the Ministry of Telecommunication and Digital Infrastructure to Rs. 2.4 billion compared to Rs. 423.8 million.
The defence budget has been brought down to Rs. 284.04 billion from Rs. 306 .6 billion, healthcare to Rs. 160.97 billion from Rs. 174.077 billion, and education to Rs. 76.94 billion from Rs. 185.97 billion.
Two weeks are given for any party to seek court intervention on the Appropriation Bill after which time the Finance Minister will present the Budget on 10 November. The Budget will then be debated in Parliament with a final vote expected on 10 December. (AH)
