Cabinet Decisions

Infrastructure and Housing Development Project in Puttalam

The Cabinet has approved to a Memorandum submitted by President Mahinda Rajapaksa as the Finance and Planning Minister to implement an infrastructure and housing development project in Puttalam district.

The International Development Association (IDA) of the World Bank has agreed to provide a loan of US$ 32 million interest free but with a service charge of 0.75% per annum. It is repayable in twenty years inclusive of a grace period of 10 years for the implementation of the project.

The total cost of the project is US$34.2 million of which US$ 2.2 million will be provided by the Government.

Project would finance housing, drinking water, roads and sanitary for 20,600 families in Kalpitiya, Mundal, Puttalam and Vanathavilluwa Divisions of Puttalam district representing 15,450 Internally Displaced Families (IDP) and 5150 non-IDP families.

The Project has two main components. In the first phase US$ 15.9 million is allocated for the Infrastructure developments which include the construction of 100 kilometres of roads, Development of 34 water supply schemes, Provision of sanitary facilities and environmental mitigation.

In the second phase housing assistance will be provided for the reconstruction of 7,885 houses through transfer of cash grants to selected eligible beneficiaries with an estimated cost of US$ 16.1 million.

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Establishment of ‘Jathika Isura’ for proper management of Government owned assets

The Cabinet has approved to a memorandum submitted by President Mahinda Rajapaksa as the Finance and Planning Minister for the establishment of ‘Jathika Isura’- Wealth Corporation which will act as a Government investment management institution for proper management of Government assets. This has been proposed in the 2007 budget proposals.

The basis for the proposal is that the management of Government owned lands, assets and Government stakes in various privatised enterprises which takes place without proper coordination and investment skills.

Establishing of ‘Jathika Isura’ will provide institutional structure and skills required for the proper management of above assets properties through enhancement of income.

Accordingly, the Cabinet approval is given to establish ‘Jathika Isura’ as a fully Government owned company under Company Act with an initial capital of Rs. 100 million allocated from the treasury for the establishment of the institute.

This institute will be supervised under the Finance Ministry through which is expected to enhance the savings of rural people and uplift their living standards.

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Amendments to the Industrial Development Act No. 36 of 1969

The Cabinet has approved to a memorandum submitted by Rural Industries and Self Employment Promotion Minister S.B. Nawinna to amend the Industrial Development Act No. 36 of 1969, under which the Industrial Development Board of Ceylon has been established.

Accordingly the approval was granted for the following amendments to the Section 17 of the Industrial Development Act No. 36 of 1969 to ensure that the Industrial Development Board of Ceylon operates in the most suitable manner to help achieve best results:

17(1) The Board shall consists of nine members of whom, Six members including one member, being an officer of the Ministry in charge of the subject, shall be appointed by the Minister.

One member, being an officer of the General Treasury, shall be appointed by the Minister in consultation with the Finance Minister.

One member, being an officer of the Export Development Board shall be appointed by the Minister in consultation with the Minister in Charge of the subject of the Export Development Board of Sri Lanka.

One Member being an officer of the Central Bank of Sri Lanka shall be appointed by the Minister in consultation with the Finance Minister.

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Smallholder plantation entrepreneurship development programme

The Cabinet has approved to a Memorandum submitted by Plantations Industries Minister D. M. Jayaratne to implement the Small Holder plantation Entrepreneurship Development programme commencing from 2007 by spending US$ 40.2 million (approximately) over a period of seven years which will comprise of contributions from foreign grants, private sector and the Government.

Out of the total estimated cost of this project US$ 22.5 million will be a loan from IFAD.

The Project will be co-financed by the United States Agency for International Development (USAID) US$ 5.5 million and the Wellassa Rubber Development Company US$ 5.2 million which will be in the form of grant funds. The balance funding of US$ 7.0 million will be by the Government.

Rs. 266.25 million has been allocated by the Treasury for this project for 2007.

This project is carried out in two components. Under the first stage the Mid Country Land Development Programme it is expected to develop 3000 hectares of land in Hadabima and Mahaveli settlement areas and 3800 hectares of land will be cultivated with rubber under the Moneragala Rubber Development Programme which comes in the latter part of the project.

The objectives of the programme are to improve income levels of smallholder tea and rubber growers by way of developing land and to increase profit through improved post harvest handling, storage, processing and marketing products.

It is also expected to develop and expand rural finance and credit services and reduced poverty and improve living standards of women.

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MoU between Agricultural Development and Agrarian Services Ministry of Sri Lanka and the Agriculture Ministry of Chile on Phytosanitary Matters

The Cabinet has approved to a note to the Cabinet submitted by Agricultural Development and Agrarian Services Minister Maithreepala Sirisena to sign a Memorandum of Understanding between Agricultural Development and Agrarian Services Ministry of Sri Lanka and the Agriculture Ministry of Chile on Phytosanitary Matters to promote agricultural trade between two countries and to obtain training for the officials of the Agriculture Department on sanitary and phytosanitary systems which is well developed in Chile.

Sri Lanka exports fruits and spices in large quantities to Chile. Even though the open economic policies are implemented in both countries, authorities in Chile have reported that trade balance is not in favour of Sri Lanka to rectify the situation and for further development bilateral cooperation, it was decided to sign an agreement on the application of sanitary and phytosanitary measures of the World Trade Organisation / Sanitary and Phytosanitary System (WTO/SPS) and to promote trade of plant, plant products and related food products.

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Tariff revisions under bilateral and regional trade agreements and other tariff revisions

The Cabinet has approved to a memorandum submitted by President Mahinda Rajapaksa as the Finance and Planning Minister for Tariff Revisions under bilateral and regional trade agreements and other tariff revisions.

Tariff concessions on selected imported goods agreed under SAFTA and the Pakistan -Sri Lanka Free Trade Agreement have to be implemented by issuing a Revenue Protection Order (RPO). It has been decided to implement all the tariff changes in one PRO to give effect to tariff revisions under the Free Trade Agreements and other relevant tariff revisions.

Approval has been granted:

(a) to issue PRO to implement tariff revisions, (b) to present to Parliament for approval of tariff and other tax revisions and (c) to issue and PRO to implement tariff revisions to be made on 12.06.2007 under the Pakistan-Sri Lanka Free Trade Agreement and present it to the approval of Parliament.

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National Action Plan for Improving Early Childhood Care and Development and Adult Literacy

The Cabinet has approved to a memorandum submitted by Education Minister A. D. Susil Premajayantha to implement the National Action Plan improving early childhood care and development and adult literacy with the aim of achieving the national objectives by year 2010.

Two main areas targeted under the National Action Plans are Early Childhood Care / Education and Youth / Adult literacy. Obtaining the support of other related Ministries and Departments, as also, from the international and multilateral organizations (Governmental and Non Governmental) when implementing the National Action Plan is also an important factor in this process. Hence, the Cabinet has granted approval for the preparation of integrated Action Plans by relevant Ministries, Agencies, using the Macro Level Plans of the project as the base.

Provincial, District, Divisional and Village level committees will be established to implement the action plan. Coordination and Monitoring of Implementation of above action plans will be done by the Ministry of Education, in collaboration with all stakeholders and the use of modern information technologies.

On the Cabinet approval, a Presidential Task Force will be established - headed by H.E. the President - to direct and monitor all aspects of the action plans.

According to the goals of the Dakar Framework for Education for all, adopted at the World Education Forum convened by UNESCO in April it is deemed very important to implement National Action Plans for the education sector.

Compensation to victims of train accidents occurred on 22.12.1996, 18.08.2001 and 13.01.2002 The Cabinet has approved to a memorandum submitted by Transport Minister Dullas Alahapperuma to increase the compensation paid to the victims of train accidents occurred on 22.12.1996, 18.08.2001 and 13.01.2002.

A large number of court cases have been filed against the above mentioned three train accidents. The Attorney General has suggested that it would be appropriate to increase the amount of compensation payable to all categories by 50%.

Therefore the Cabinet has approved to make available, a sum of Rupees Eleven Million Three Hundred and Seventy Four Thousand Five Hundred, from the treasury as required for the payment of these compensations.

The rail accident at Kollupitiya on 22.12.1996 killed one person and injuring seventeen others and the accident have occurred due to the fault of the driver. On 18.08.2001, due to the train accident that occurred due to derailment of train No. 16, between Alawwa and Ambepussa, fourteen people died and 28 sustained injuries and cause was the maintenance lapses of the department. The derailment of train No. 30, an intercity express, at Kiriwallapitiya, Rambukkana on 13.01.2002 caused death to fifteen passengers and 127 sustained injuries. The accident occurred due to the fault of the driver.

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A Special Task Force for purchasing of paddy

The Cabinet has approved to a memorandum submitted by Agriculture Development and Agrarian Services Minister Maithreepala Sirisena to establish a Special Task Force representing several ministries for coordination and supervision of activities of paddy and rice sector directly affecting paddy purchases.

The Special Task Force will be comprised the secretaries of the following ministries, 1. Ministry of Agriculture Development and Agrarian Services, 2. Ministry of Finance, 3. Ministry of Trade, Marketing Development, Cooperative and Consumer Services, 4. Ministry of Nation Building and Estate Infrastructure Development, 5. Ministry of Education,

6. Ministry of Rural Industries and Self Employment Promotion, 7. Ministry of Irrigation and Water Management.

The Secretary of the Ministry of Agriculture Development and Agrarian Services shall function as the Chairman of the Special Task Force.

The Special Task Force shall meet every week and make a broad review of the paddy purchasing programme and activities directly related to such process with a view to take suitable decisions and finally implementing such decisions.

The stakeholder institutions should act on a common objective and proper vision to carry out the market process and paddy purchasing programmes so that ultimately a fair price would be granted to the paddy producer.

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Enhancement of production targets and training facilities of Horticulture Crop Training and Development Institute in Bibile

The Cabinet has approved to a memorandum submitted Agriculture Development and Agrarian Service Minister Maithreepala Sirisena for the enhancement of production and training facilities of the Horticulture Crop Training and Development Institute in Bibile.

The Cabinet has approved to utilize the financial provision of Rupees thirteen million allocated for the purpose in the budget 2007 during this year and to provide an allocation of Rupees five million in the budget for year 2008 to complete the project.

The Horticultural Training and Development Institute in Bibile is the provincial training institute for agriculture. It conducts, particularly to the farmer community of the province, short-term and one year training courses. There is an increasing demand for agricultural training both for current agricultural practitioners and educated youth who would be future agricultural practitioners.

Moneragala district in particular is among the poorest regions of this country. There is much scope and potential for agriculture development in the district and it is very essential to provide the necessary training and other facilities to the farmer communities.

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Construction of a new science laboratory at the Paddy Research and Training Institute, Batalagoda

The Cabinet has approved to a memorandum submitted by Agriculture Development and Agrarian Services Minister Maithreepala Sirisena for the construction of a new science laboratory at the Paddy Research and Training Institute, Batalagoda.

On the approval the project will be implemented for the construction of a new science laboratory with the required machinery and the accessories for the paddy research development institute.

The forty million rupees provided in the 2007 budget for the purpose will be utilized and the Cabinet of Ministers have granted approval for another allocation of a sum of forty million rupees in the budget for the year 2008 to complete the project.

Generation of a new technology is an essential factor to meet the challenges in the paddy cultivation sector. As a result of the investment made in paddy cultivation during the past periods Sri Lanka has been able to reach almost self-sufficient level in rice. The productivity should be enhanced to increase the yield and the production costs should be reduced.

Hence, optimum contribution of research attracted to various sectors is an essential factor in this process.

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Construction of Bus Stand at Homagama

The Cabinet has approved to a memorandum submitted by Urban Development and Sacred Area Development Minister Dinesh Gunawardena for the construction of bus stand in Homagama town and to assign the engineering facilities with ancillary facilities to Sri Lanka Land Reclamation and Development Cooperation on design and build basis.

To initiate the master plan for the Homagama Town Centre Development it has been decided to construct the bus stand and ancillary facilities. A low lying land in an extent of 12 acres, which is been vested with Urban Development Authority (UDA) has been identified for the Homagama Town Centre Development Programme.

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Advisory Board of the Financial Intelligence Unit

The Cabinet has approved to a memorandum submitted by President Mahinda Rajapaksa as the Finance and Planning Minister to appoint the Governor of the Central Bank as the Chairman of the Advisory Board of the Financial Intelligence Unit (FIU) to look after policy matters of the same.

The Cabinet of Ministers has also granted approval to allow the members of the Advisory Board representing Ministries/Institutions to continue with the Advisory Board in the future.

On approval the Governor of the Central Bank will select and appoint a suitable person as the CEO of the FIU subject to the approval of the Monetary Board as the present CEO has given a notice to resign from the post.

The FIU was established subsequent to the ratification of the Financial Transactions Reporting Act by Parliament on 18 January 2006. The purpose of establishment of the FIU is to take necessary action to curtail illegal financial transactions that are taking place by way of money laundering.

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Milk Production Development Project - 2007 System C

The Cabinet has approved to a memorandum submitted by Agriculture Development and Agrarian Services Minister Maithreepala Sirisena to implement the milk production development project for the year 2007.

The project is jointly implemented by the Mahaweli Authority of Sri Lanka and MILCO Co., Ltd. To ensure the completion of the project as scheduled the ministry has signed a Memorandum of Understanding with both parties mentioned above early this year.

A sum of Rs. 90 million has been approved in the 2007 budget to carry out the project and the Cabinet has approved utilizing funds.

By implementing the project, it is expected to generate additional employment avenues, increase marketing facilities, improve nutritious conditions to people and more specially to save much needed foreign exchange through reduction of milk production imports.

The project activities include identification of problems faced by the local farmers who are involved in milk cow rearing and finding solutions for the same, training 1000 milk cow farmers, providing material assistance to build 1,100 cow sheds, distributing 1000 milking cows and providing nutritious animal food, advanced veterinary facilities and marketing facilities for additional productions.

It is expected that nearly 6,000 house holders will be benefited due to this project, the period of which extends up to five years.

The project will be implemented in Dimbulagala, Dehiattakandiya and Mahiyanganaya DS divisions in the districts of Polonnaruwa, Ampara and Badulla.

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A new land for the construction of RDA head office in Battaramulla.

The Cabinet has approved to a memorandum submitted by Urban Development and Sacred Area Development Minister Dinesh Gunawardena for the allocation of a land to the Road Development Authority (RDA) for construction of its Head Office building at Denzil Kobbekaduwa Mawatha in Battaramulla.

The land which was previously provided by the Urban Development Authority (UDA) to Sri Lanka Ramanna Maha Nikaya (SLRMM) will be used for this purpose with the consent of the SLRMM, requesting an alternative block of land for their religious activities stating that the existing surrounding environment of the land is not suitable for their religious activities.

The Chairman of Road Development Authority (RDA) has requested the UDA to allocate the above land to the RDA for construction of its Head Office building and also informed that the land approximately of 77 Perches in Colombo 5 owned by the RDA can be released to the SLRMM in lieu of the land provided for the RDA.

Development of the land should be commenced within six months from the date of handing over the land and completed within two years.

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Proper development project to uplift Mahaweli System ‘B’

The Cabinet has approved to a Memorandum submitted by Agriculture Development and Agrarian Services Minister Maithreepala Sirisena for the implementation of a project for the rehabilitation and consolidated development in System ‘B’.

Objective of this project is to enhance the living standard of about 20,000 families living in System ‘B’. The project has been planned to be completed within six years utilizing existing resources of the Mahaweli Authorities of Sri Lanka.

The total estimated cost for the above project is calculated as Rs.2800 million.

Main components of the project and the cost estimates are as follows:

1. Rehabilitation of 52 Km long main canal, 459 km long distribution canals and filed canals to the extent of 1138 km, rehabilitation of 54 tanks and 255 km long canal roads of Rs.2073 million.

2. Enhancing agricultural and livestock production Rs. 150 million.

3. Strengthening of farmer organizations and training for farmers Rs. 100 million.

4. Provision of drinking water with priority to beneficiaries Rs.200 million.

5. Construction of electric fence to prevent wild elephants and finding solution to environment issues Rs.176 million.

6. Project management administration Rs.101 million.

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Additional Provisions for Mahaweli Consolidated Project

The Cabinet has approved to a memorandum submitted by Agriculture Development and Agrarian Services Minister Maithreepala Sirisena to obtain a provision of rupees 61.6 million from the General Treasury for the payment of arrears plus VAT component to contractors and revise the Total Cost Estimated of the project as Rs. 1335.7 million.

In order to facilitate additional work components within the project, the European Economic Commission has approved additional fund requirement amounting to Rs. 295 million. Since early 2003 payments due to contracts remain in arrears as the project officially ended on 31.12.2002. Furthermore a sum of Rs.15.6 million accumulated as Retention Tax and VAT component on the above contract yet remained unsettled totaling Rs. 61.6 million.

It was later observed that the initial provision was sufficient enough only to cover part of the rehabilitation.

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Statutory Position for Sri Lanka National Book Development Council

The Cabinet has approved to a Memorandum submitted by Education Minister A. D. Susil Premajayantha, Minister to change the Sri Lanka National Book Development Council to a Statutory Council under the Ministry of Education and appoint the necessary staff in a systematic manner.

This change of position of this institute is to provide a more efficient service for book development through a wide role of function.

Sri Lanka National Book Development Council is the only organization which can contribute for the promotion of book culture in this country on the part of the Government. As such it is very essential to provide a statutory position to this council. It is revealed that the functions entrusted to the Council can be properly performed only through such statutory basis.

Improvement of the reading culture in Sri Lanka, sponsoring and assisting for the progress of professional and other organizations engaged in all sectors relevant to book development as well as the import, export and distribution of books are among the objectives of this council.