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The Sri Lanka Apparel Exporters Association (SLAEA) has called upon the Government to do away with the 0.75 percent Port and Airport Development Levy (PAL) on all imports for re-export and to refund all payments made so far.

This appeal was made by the Association's Chairman, Ranjan Casiechetti addressing the SLAEA Annual General Meeting in Colombo recently.

He said the imposition of the PAL could adversely affect Sri Lanka's garment industry which is going through a difficult time.

"The Budget Proposals of 2002, introduced a Port and Airport Development Levy(PAL). Together with other apparel associations, we made representations to the authorities that PAL is not in line with standard practices adopted worldwide where the policy of the government is to totally exempt exports from all levies. We do appreciate that the government considered our request partially and reduced the levy from 1% to 0.75% in spite of the serious crisis in bridging the budget deficit. However, the imposition of this levy at the present time when the industry is facing a crisis, and fighting to survive, could adversely affect the industry and be counter productive.

On behalf of our Association and the industry, I call upon the government to re-consider the imposition of this levy on all imports for re-export and make arrangements to refund all payments made to date," Casiechetti said.

He said: "2001 was an extremely turbulent year for the industry. The events of September 11 adversely affected the economies of Sri Lanka's major trading partners. This, together with the terrorist attack at the Bandaranaike International Airport were the primary factors which resulted in the Sri Lankan economy recording a negative growth of 1.4%.

Hence the apparel industry faced a reduction in orders and lower unit prices. For the first time in 12 years, the export turnover dropped from the levels of the immediately preceding year. The turnover in 2001 of $ 2.4 billion, compared poorly with that of $ 2.7 billion in the previous year.

This trend continued in the first half of 2002 with a decline of 20% over the corresponding period of the previous year. We, along with other Associations in the trade, are taking steps to reduce the impact of this adverse scenario. The crisis in the apparel export industry must not be ignored. We appreciate the concern of the government and make an appeal to give the industry whatever relief it can offer.

We appreciate the bold and visionary steps taken by the government in commencing negotiations to obtain duty concessions on the import of garments from Sri Lanka by the United States of America and the European Union. These negotiations should be continued without disruption and concluded successfully to ensure the survival of the industry after 2005.

Our Association invested in a quota monitoring unit, so that those engaged in the trade could have access to an up-to-date record of the quota movement of factories and trading houses. We, together with the other associations, made representations to the Textile Quota Board, to assist in the effective management and monitoring of quota allocation, distribution and utilisation.

Immediately after the terrorist attack on the Airport, our Association with other apparel associations, successfully negotiated the suspension of the cess that was levied on exports of quota and non-quota apparel.

As a member of the Ceylon Shippers' Council, we actively participated in fruitful discussions with various governmental and other authorities to effectively reduce, within a short time, this exorbitant risk premia. This encouraged vessels to call once again at the Port of Colombo.

The government has taken positive steps to amend obsolete laws, particularly with regard to the termination of employment and overtime limitations.

This will make the industry globally competitive.

It is also imperative that the cost of production is controlled. The government should critically examine the ever-increasing cost of utilities and services if this industry is to remain globally competitive.

We appreciate the efforts of the Board of Investment of Sri Lanka (BoI) in implementing the program for the harmonisation of the non BoI sector with that of the BoI."

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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