Decisions taken by the Cabinet at its Meeting held on 22.08.2012

1/    Three tier regulatory mechanism to supervise Micro Finance Institutes

•   On a proposal made by the President, as the Minister of Finance and Planning, to introduce legislation to regulate and supervise Micro Finance Institutions (MFIs) in the country to ensure the financial stability in that sector was approved by the Cabinet.

•     Accordingly as per the draft amendment the large scale MFIs will be brought under the direct supervision and examination by the CBSL.

•    Small MFIs will come under the supervision and examination of CBSL approved audit firms who will support to the CBSL to take necessary enforcement of regulatory action in respect of those MFIs

•    MFIs falling under the Commissioner of Cooperatives, Registrar of Cooperative Societies and the Commissioner of Agrarian Development will come under purview of authorities empowered under such statutes. Institutions coming under the Samurdhi Authority will come under the regulation of and supervision in terms of the structure stipulated in the proposed Divineguma Develoment Act and the Central Bank of Sri Lanka to set principles and standards from time to time in respect of institutions that are being regulated under this third tier.

2/    MoU on Bilateral Consultations with the Sultanate of Oman

•    The proposal made by Prof.  G.L. Peiris, Minister of External Affairs for signing of the Memorandum of Understanding on Bilateral Consultations with the Ministry of Foreign Affairs of the Sultanate of Oman as a further step to enhance the existing bilateral relations between the two countries, was approved by the Cabinet.

•    Though the Sri Lanka’s volume of trade with Oman is marginal it is in favour of Oman due to import of petroleum.

•    The proposed MoU would pave the way for closer cooperation in the fields of Trade, investment and tourism between the two countries.

3/    Convention on the Suppression of Terrorist Financing Act No. 25 of 2005 to be amended

•    The proposal made by Hon. Prof. G.L. Peiris, Minister of External Affairs, to instruct the Legal Draftsman to draft necessary amendments to the Convention on Suppression of Terrorist Financing Act No. 25 of 2005, was approved by the Cabinet of Ministers.

•    This is in keeping with the recommendations of the Financial Action Task Force of the G 7 countries, to eliminate the remaining deficiencies in the law,

4/    Import Export and Production of Hydro chloro fluoro carbon to be phased out

•    A proposal made by Mr. Anura Priyadharashana Yapa, Minister of Environment, to implement the recommendations made by the Officials' Committee appointed by the Secretary to Ministry of Environment to start the control of the import/export and production of Hydro chloro fluoro carbon with effect from 01st January 2013 was approved by the cabinet.

•    Accordingly Cabinet decided  to direct the Controller of Imports and Exports to introduce appropriate regulations for the purpose under the provisions of the relevant Act..

•    The Ozone layer is situated 20-50 Km. above the earth's surface and acts as a protective shield and filters the harmful ultra-violet radiation coming from the sun.

•    When Ozone Depleting Substances are released to the atmosphere they destroy the Ozone layer, which would lead to, increasing the risk of having skin cancers, eye cataracts etc. as well as global climate change.

•    In keeping with the Montreal Protocol, Sri Lanka is obliged to completely phase out chloro fluoro carbon which is widely used in refrigeration and air conditioning by January 2030.

5/    Development of Independence Square, Colombo 07 to be developed
 – Vesting of State Lands with the UDA –

•    Urban Development Authority is to undertake the project to refurbish old buildings in the Independence Square Area while preserving the original architectural features.

•    The proposal made by the President, in his capacity as the Minister of Defence and Urban Development, to release the Race Course Ground including the Grand Stand and the Mini Stand buildings Bloomfield play ground Auditor General Dept’s property including the premises occupied by the Government Analyst Dept to the Urban Development Authority for overall development of the area was approved by the Cabinet.

•    The development also include the acquisition of 56 perches of  land already included in to the Race Course playground development.

6/    Lands at D.R. Wijewardena Mawatha, Colombo 10, to be vested in UDA for Development

•    The Urban Development Authority (UDA) has planned to develop the land area along D.R. Wijewardena Mawatha, Colombo 10 for tourism related activities, in line with the ongoing Colombo City Development Programme.

•    Under this development programme, the UDA has already earmarked 7.5 acres of land in the above area, to construct a 350 metre high Multifunctional T.V. and Communication Tower (Lotus Tower) with a revolving restaurant and many other entertainment activities.

•    The proposal made by H.E. the President, in his capacity as the Minister of Defence and Urban Development, to vest all State Lands in the area, with the UDA~ for the above development activities was approved by the Cabinet.

7/    Government  to Maintain the Price Stability of Paddy during 2012 Yala Harvest

•    The proposal by President Mahinda Rajapaksa to increase the amount of pledge loan by Rs 1700 million granted to Paddy marketing Board and other Government institution by the state banks was approved by the cabinet.

•    The paddy harvest of the Yala Season 2012 is expected to enter the market from mid August up to the first week of October 2012 and the estimated paddy production for this Yala Season is about 1.13 million MT.

•    The total requirement of rice for consumption of six month is 616,777 MT(912,830 MT of Paddy). Accordingly it has been estimated that there is a surplus of 218,875 MT of paddy in Yala season.

•    The President, in his capacity as the Minister of Finance and Planning, informed the Cabinet of Ministers that loan facilities amounting to Rs.4950 million have been provided by State Banks to the Paddy Marketing Board up to June 2012, for the purchase of paddy.

•    The General Treasury has provided a further sum of Rs.2000 million to the Paddy Marketing Board for the said purpose. Rs.1,588 million will be made available to the Paddy Marketing Board through pledge loans from the Banks to purchase paddy in Yala Season 20 12~ in addition to the proceeds of sale of paddy stocks purchased in previous seasons by the District Secretaries/Government Agents of paddy producing Districts, utilizing around Rs.l,300 million released to them by' the General Treasury.

•    The President also stated that action has been taken under the guidance of the Ministry of Agriculture) to develop four zones to produce rice for export purposes, in keeping with the budget proposals for 2012 and that the Ministry of Agriculture will coordinate the activities for the sale of this special variety of paddy produced by farmers in the said regions, to the export market.

8/    Project for the Establishment of Colombo Vocational Training Center and Gampaha College of Technology –

•    On a proposal made by the President in his capacity as the Minister of Finance and Planning, cabinet approval was granted to enter into the relevant loan agreement with the EDCF of the Exim Bank of Korea, for the Establishment of Colombo Vocational Training Center and Gampaha College of Technology  

•    The Economic Development Co-operation Fund (EDCF) of the Export-Import Bank (Exim Bank) of Korea has agreed to provide a loan in Korean Won not exceeding the equivalent of US $26,046,000 to finance the Project for the Establishment of Colombo Vocational Training Center and Gampaha College of Technology  project.

•    The objective of the project is to establish two Vocational Training Centres with modem technological facilities in Colombo and Garnpaha.

•    This project is to provide facilities to the youth to gain the knowledge and skills necessary to meet the domestic as well as international demands, which in turn would increase job opportunities, contributing to the growth of the economy in the country.

9/    Loan from the Exim Bank of China to finance Matara-Beliatta Section of the Matara - Kataragama Railway Line Extension Project –

•    The Exim Bank of China has agreed to provide a loan of US $200 million and a Chinese Government Concessional Loan of Renminbi Yuan 508 million to cover the total cost of US $278.2 million of the above project.

•    The objective of this project is to improve the transport system in the Southern Region. The project is planned to be implemented in three stages.

•    Stage I of the project includes the construction of the railway line from Matara to Beliatta, Stage II from Beliatta to Weerawila and Stage III from Weerawila to Kataragama.

•    The proposal made by the President, in his capacity as the Minister of Finance and Planning, to enter into the relevant loan agreements, was approved by the Cabinet.

10/    Chinese assistance to finance the Phase II of the Hambantota Port Development Project

•    Phase I of the Hambantota Port Development Project was implemented with financial assistance from the Exim Bank of China. The main components completed under Phase I were breakwater, approaching channel, harbour basin, stocking yard, roads and administration building.

•    The Exirn Bank of China has agreed to provide a loan of US $600 million and a Chinese Government Concessional Loan Renminbi Yuan 1 Billion to finance Phase II of the project.

•    The objective of Phase II of the project is to build a strong supplementary Port to Colombo Port as an International Hub and support Sri Lanka to consolidate the status as a container transshipment hub in the Southern Asian Region.

•    The proposal by the President, in his capacity as the Minister of Finance and Planning, to enter into the relevant loan agreements was approved by the Cabinet.

11/    Monthly Allowance of the Teacher Assistants to be increased by Rs 3000.00

•    Cabinet on a proposal by Minister of Education Mr. Bandula Gunawardena has decided to increase the monthly allowance of the Teacher Assistants, numbering approximately 4700, to Rs, 6,000/- per month.

•     Since it is mandatory for them to obtain the Teacher Training Certificate or a Degree from a recognized University, to be confirmed in the post it is expected that the increased allowance will help them to complete the requirements speedily.

•    Due to the shortage of teachers caused by the problematic situation prevailed in the past school authorities had obtained the services of voluntary teachers informally to avoid the risk of decreasing the level of education of the schools in the difficult and most difficult areas.

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