Ministry of Economic Development clarifies Tourism Authority restructuring

A wide publicity has been given to the events unfolding at the Sri Lanka Tourism regarding the resignation of Dr Nalaka Godahewa, from Sri Lanka Tourism Promotion Bureau, Sri Lanka Institute of Tourism and Hotel Management and Sri Lanka Convention Bureau and the performance of the Board of Investment.

These media reports have given the impression that organizations are unable to preform due to the interference by the Ministry of Economic Development and on promotional matters due to Treasury involvements.

The Ministry of Economic Development denies this completely and wishes to make the following clarifications to enable public to come to informed conclusions. As regards to, Sri Lanka Tourism, following the recent meeting of Sri Lanka Tourism Promotion Bureau, had with the Committee on Public Enterprises (COPE), Basil Rajapaksa, Minister of Economic Development summoned Chairman and all members of the Board of all four organizations involving tourism and the ministry officials who attended the COPE meeting.

The Minister, while expressing his concerns over the performance of the organizations and issues continue to come up at the COPE meetings, explained to the participants that all organizations must strictly work according to the government vision and strategy of the industry. While the Minister in his various briefings and more explicitly in the Tourism Development Strategy 2011-2016, which was prepared by the ministry with the participation of the relevant organizations, has explained the strategy of the government towards the development of tourism.

The Minister explained that the government strategy is to promote Sri Lanka as a model tourism destination to improve the global image of Sri Lanka by creating a conducive tourism environment and improving domestic tourism, benefiting from country's natural, cultural and historical diversity and ensure to cater 2.5 million tourist arrivals by 2016.

The strategy comprises the promotion of a safe and clean environment in the country with special emphasis on popular tourist locations, the promotion of tourism products representing country's bio diversity.

Promotion of web page contacts improving direct connectivity through increased flight operations by Srilankan and other international airlines and expanding road connectivity linking the tourism to the rest of the economy, developing a gift industry, expansion of SME based products, popularizing local fruits, vegetable and other consumables among tourists, event promotions throughout the year based on Sri Lankan cultural and religious festivals, attracting international events and internationally known hotel chains.

The strategy also promotes facilities to local tourists at affordable prices to increase the turnover of tourism industry beyond the targeted 2.5 million foreign tourists.

The ministry considers that these integrated components are vital to promote tourism. In this regard, the development of zoological and botanical gardens, wildlife parks, cultural triangle, and expansion of common facilities at major cities have been done by the government.

Further, long standing issues pertaining to granting licences, visa processing matters were solved by the ministry to assist the industry.

The Minister also expressed his desire to see that the big players in the industry themselves take a lead in promotional activities similar to apparel and tea.

Minister at this meeting also emphasized the need for a strict administrative and financial discipline in the organizations coming under the purview of the ministry, to ensure that the ministry is not subject to undue criticism. The minister explained that since a number of private sector corporate personalities and trade representatives are in the Board, he expects best practices and corporate approach in management. He explained that his expectation is that the Board members discuss issues sufficiently, develop corporate plans and strategies and give leadership to effective implementation in a pragmatic manner within the overall strategy of theg overnment ensuring good governance. The minister also responded to various concerns raised by several members of the boards, including administrative matters such as filling vacant positions which have to be done in terms of accepted procedures. The minister also decided to meet the Board regularly to improve the formal interactions and performance of the organizations which most of the Board members thought was a good step.

Few days after this meeting, the minister decided to reconstitute the organizations and requested Dr. Nalaka Godahewa, Chairman, to resign from the Tourism Promotion Bureau, Sri Lanka Institute of Tourism and Hotel Management and Sri Lanka Convention Bureau. Consequently, he sent his resignation.

The Minister also appointed Chandra Mohotti as Chairman, Sri Lanka Institute of Tourism and Hotel Management, Bashwara Senanka Gunaratna as Chairman, Sri Lanka Tourism Promotion Bureau and Neil Rupasinghe as Chairman, Sri Lanka Convention Bureau.

Dr. Nalaka Godahewa will continue as Chairman of the Sri Lanka Tourism Development Authority. The resignation of the chairman was not due to his inability to work with the ministry or due to a tussle between secretary and chairman as implied in media reports in which case he should have resigned from Sri Lanka Tourism Development Authority as well.

As regards, the letter sent by the Secretary, Ministry of Economic Development to the Chairman of Sri Lanka Tourism Development Authority, the Ministry wishes to state that the letter was sent to gather information to prepare for the next COPE meeting. The letter, which is in the public domain now with this reply which appeared in a Sunday newspaper before even reaching the relevant officials, requested information that would require to address the questions, issues and concerns raised at COPE meeting.The formulation of the letter by the officials who attended the COPE meeting is to gather information as they think such information would be useful for their response. These are issues in fact raised by the Auditor General in his reports to which the Ministry now required to respond. Hon. Minister too instructed all concerns raised by COPE should be clarified properly as incumbent Minister needs to put the record straight. The Ministry wishes to assure that the letter is not pointing out at any individual officer in the Sri Lanka Tourism Authority.

Further, the correspondence of this nature takes place with the incumbent Head of the Institution regardless of whether such issues have occurred during his term of office or before he assumed the office. Similar letters have been sent to other organizations as well requesting incumbent heads to give reasons as to what actions that they have taken and if not why, on matters raised by the COPE.

Therefore, the Ministry wishes to clarify that the letter sent to the present Chairman of the Sri Lanka Tourism Development Authority, is only a usual practice in such correspondence and has nothing to do with his involvement in the matter raised therein. The role of the Secretary to the Ministry and his officials is to interface with relevant agencies coming under the purview of the Ministry under the direction and guidance of the Hon. Minister. The Ministry is duty bound to perform its oversight responsibilities and accountability functions.

The Secretary to the Ministry is the Chief Accounting Officer and all heads of agencies need to cooperate with him in the discharge of these responsibilities. The Heads of organizations need to work together with the Minister and through the Ministry Secretary and officials. Therefore, the Ministry wishes to state that there was no personal animosity, or other motives behind in collecting such information as implied in the media reports. The Ministry regrets to note the manner in which the Secretary to the Ministry has been dragged on to these issues to tarnish the image of the Ministry.

As regards the Board of Investment, the Ministry of Economic Development wishes to clarify that the investment promotions and approvals are not constraint by the Treasury. Only aspect the Treasury gets involve is the processing of requests involving concessions under Strategic Investment Law. All such proposals have been duly processed by the Ministry of Economic Development with the concurrence of the Ministry of Finance and Planning as required by the Law and no delay has occurred what so ever.

The papers sent by BOI to obtain Cabinet approval of the Ministers are scrutinized by the Ministry on the guidance and advice provided by the Hon. Minister and submitted to the Cabinet of Ministers, unless the Minister has deferred them or requested for revision generally, such requests are processed expeditiously. After all, line ministry Secretary is required to take full responsibility of factual content of cabinet papers and other documents.

All investment approvals are undertaken by the BOI within their laws and the concessions are granted under respective legislations. It is misleading to attribute that BOI performance has been adversely affected by the Treasury. The ministry officials and sometimes the Hon. Minister himself get involve in solving procedural issues and other complexities associated with other line agencies. Further, the Treasury is represented at the BOI Board by a Deputy Secretary to the Treasury, to improve Treasury coordination in such work. In addition, the Commissioner General of Inland Revenue and the Director General of Customs are also present at BOI Board meetings to address matters coming under the purview of the Ministry of Finance.

The Treasury gets involved directly only on the large projects which involve many stakeholders in the Government and referred to the Ministry by the Government to coordinate the approval. The Treasury has coordinated many such large projects in infrastructure, hotels and industries approved in recent times successfully.

As regards promotional aspects are concerned, Government has been on record that Sri Lanka's promotional activities should be carried out by a collective arrangement in which the Sri Lanka Tourism, Export Development Board, Department of Commerce, Sri Lanka Tea Board, Srilankan Airline and the BOI must work together considering the cost involved and the fact that coherent promotional strategy is necessary for an effective promotional campaign.

Minister of Economic Development has also emphasized that the promotional activities should be directed towards emerging economies and there are greater potentials to attract tourism, trade and investment from South Asia, Middle East, East Asia, Russia and Far East in addition to its traditional markets in Western Europe and USA.

It is in this context, that the BOI has been requested to spearhead this task. Further, the BOI had been requested to effectively provide support services to the investors who are already here in its export processing zones and elsewhere. On the direction of Hon. Minister, BOI has appointed Country Directors to coordinate and facilitate investors from respective countries. The Hon. Minister has also requested additional investments should be sought from them in addition to facilitating new investors coming from abroad. As many investors who have shown keen interest in exploring Sri Lanka's investment potentials,

Minister has further requested the officials to work out a wide range of investment proposals that can be presented to investors to make such promotions more focused.