June 26, 2019
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    Relief package to strengthen tourism sector

    May 24, 2019

    State Minister Eran Wickremeratne speaking on several allegations against the grant of USD 480 mn from the Millennium Challenge Corporation (MCC) of the US Government, pointed out that more than half of the loan amount will be used to develop a high-tech, comfortable Public Transportation system in the country. “I don’t know why some people speak against this loan. Most probably, because of ignorance. Or else, why would someone want to stop our people from getting a good transportation system? Of the USD 480 million we receive from MCC, USD 380 will be allocated for this transportation system. Private and CTB buses won’t be in competition anymore. Passengers will get electronic payment cards. It will have an electronic security surveillance system. Recent research reveals that 8 out of 10 women under go some sort of harassment when using public transportation. We would be able to minimize this issue with this system as well.” Wickremeratne pointed out.

    “USD 67 million of this MCC grant will be allocated to establish a digital land registry. Some people allege that it is a plan to sell lands to foreigners. With an electronic system or not, people sell lands to foreigners. But with this, land ownership will be properly digitized and we will be able to find out the exact extent of state owned land in the county. USD 63 million will be allocated to provide designing, technical and other facilitation needed for these two projects, ” Wickremeratne pointed out. State Minister of Finance Eran Wickremeratne yesterday informed Parliament that all necessary interpretations and instructions have been directed to banks and financial institutes on the relief package provided by the government to strengthen tourism sector which was severely affected by the Easter Sunday terror attack.

    The moratorium period, which is a part of the relief package, will be until March 31, 2020 for both capital and interest payments granted to the tourism sector as of April 18, 2019. Capital and interest falling due during the moratorium period will be converted into a term loan which will be recovered from July 2020 and charged a concessionary rate. Wickremeratne pointed out the moratorium provided for those who have obtained loans for tourism industry is also applicable to loans taken by the permanent employees in tourism based establishments.

    “As we all know, employees in hotels and other tourism based industries receive a substantial amount of service charge as a part of their salary. If an employee has a basic salary of Rs. 30,000, that person will get a similar amount as the service charges. As tourism was affected, services charges won’t be paid. But they have loans taken for their needs. These permanent employees too can apply for the moratorium,” Wickremeratne explained.

    Wickremeratne pointed out that tourism based establishments need to be registered under recognized institutions such as the Tourism Development Board, Hotel Association or at Pradeshiya Sabhas, Town Councils or similar institutes to receive the said relief package. Wickremeratne further pointed out that the moratorium is not limited to loans obtained by banks, but also from any finance or specialized leasing companies, as declared by the Central Bank on May 21, 2019. Wickremeratne also said that an interpretation of Circulation No 07 of 2019 on Concessionaries granted to tourism industry was forwarded to all banks on May 16, 2019, which gives an extensive explanation on the granted concessionaries.

    “Many of you were skeptical about the concessionaries we gave. You said that it won’t really materialize into a practical stage. But I tell you, our Finance Ministry does what is says it will do. We will rejuvenate tourism industry in this country earliest as possible,” Wickremeratne said.

    State Minister Wickremeratne made these observations in reply to concerns raised by UPFA MP Bandula Gunawardena on the said concessionary package. MP Gunawardena requested Finance Minister Mangala Samaraweera to pay attention to the concerns he was raising. At this juncture, Minister Mangala Samaraweera informed MP Gunawardena that he was to leave the House for a special meeting and State Minister Wickremeratne shall reply Gunawardena on Finance Minister’s behalf, joining the debate on Foreign Exchange Act.

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