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Requests for duty, interest waiver for tourism sector: Tourism Min. anticipates Central Bank response next week

23 Jul 2021

  • Ministry urges long-term mechanism for impacted tourism
  • Seeks $ 1.5 b assistance from ADB at concessional rate
By Imsha Iqbal The Ministry of Tourism anticipates a response from the Central Bank of Sri Lanka (CBSL) to its request on providing relief for the pandemic-affected tourism industry of the country by next week, The Morning Business learns. Speaking to us, a spokesperson from the Ministry of Tourism stated that the CBSL has not yet responded to their request for further relief with the prevailing situation. However, the Ministry expects that the Central Bank would provide a response on the matter by next week. “We have discussed the leasing matter because the duration provided for the leasing ends in September,” the spokesperson said, elaborating that the relief included a request on extending this leasing facility for the sector due to the circumstances of Covid. Further, the ministry official said that it was discussed on providing debt relief. However, according to the views of Minister of Tourism Prasanna Ranatunga, he believes that granting relief packages to people who engage in the tourism sector alone does not contribute in stabilising the industry and that a proper mechanism for the long term needs to be implemented. Accordingly, the people who engage in tourism themselves have presented some of their concerns in this regard, he said. In terms of debt, they have requested whether it is possible to write off debts. “We are unsure whether the authority would provide that (request of the individuals in the sector) at this moment, implying the unpredictability of the financial conditions. Therefore, they’ve presented a solution requesting a loan of $ 1.5 billion from Asian Development Bank or the World Bank for a concessional interest rate,” the spokesperson further stated. Thus, the Ministry of Tourism has requested from the Treasury whether the aforesaid solution can be considered in aiding the tourism sector. Last month, at a meeting convened by the Minister of Tourism and attended by State Minister of Money, Capital Market, and State Enterprise Reforms Ajith Nivard Cabraal, CBSL Governor Prof. W.D. Lakshman conveyed that the Government is working towards addressing the crucial conditions that have been faced by those in the tourism industry and looks forward to implementing a formal strategy to rebuild the said industry and make it debt-free. During the meeting, Cabraal had stated that the Government had spent Rs. 165 billion to control the Covid-19 pandemic, while Rs. 168 billion was provided for the Saubhagya Loan Scheme. He had also elaborated on the details of the relief packages that have been provided by the Government in order to ensure the survival of the industry during these hard times. “Approximately, the field of tourism has a debt of almost Rs. 300 billion and with the interest, it will be around Rs. 400 billion. Thus, the debt can be paid off from the said relief,” the Ministry official said, highlighting that the relief would, in fact, be an immense need. The spokesperson further added that with the progress of the vaccination programme, the industry will kick start when the country opens by mid-September for tourism.


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