AGP Executive Report

Port City Colombo & FDI: President Anura Kumara Dissanayake met China Harbour Engineering Company (CHEC) leadership, saying IMF-backed policy stability is improving the investment climate and pushing Port City Colombo as a modern economic zone. Airport Infrastructure: Bandaranaike International Airport’s Terminal 2 revival gained momentum after talks with JICA, with hopes construction could restart by November pending approvals. Export Push: Sri Lanka unveiled plans for a National Export Development Plan (2026–2030) targeting $36bn in export earnings by 2030, with ADB support. AI for Governance & Jobs: Labour Minister Anil Jayantha Fernando told the ILO Sri Lanka will adopt an “AI-first” approach to modernise institutions and boost productivity. Banking Scandal: NDB’s alleged Rs.13.2bn internal fraud has triggered restatements and highlighted deep governance and control failures. Road Safety: Seat belt enforcement on expressways will tighten after 19 June, with action against drivers and rear-seat passengers. Public Health: Dengue risk is rising as mosquito larvae density climbs; officials say 80% of breeding sites are in public places, including schools and institutions. Regional Security: Indian Navy patrol INS Sharda completed a Colombo visit, underscoring maritime cooperation. Crime & Deportations: Two alleged organised-crime figures deported from the UAE are now in Sri Lankan custody after airport CID action.

UN Torture Oversight: The UN Subcommittee on Prevention of Torture will return to Sri Lanka from 15–24 June to assess detention safeguards and how authorities have implemented past recommendations. Judicial Independence: The Commonwealth Lawyers Association warns that a proposed constitutional move to extend judges’ retirement age could undermine judicial independence and public confidence, urging against piecemeal changes. Parliament & Courts: Opposition MPs have written to the Speaker and Constitutional Council over prolonged vacancies in the Supreme Court and Court of Appeal, pressing for urgent action. Education Reform: President Anura Kumara Dissanayake has ordered officials to finalise the Education Reform Policy Framework within one month. Labour Governance: Sri Lanka and India discussed labour law reform and knowledge sharing at the ILO, including modernising Sri Lanka’s labour regulatory framework. International Finance & Trade: The ADB announced $4bn in crisis financing for countries hit by the Middle East conflict, with Sri Lanka among those requesting support. Economy & Investment: Cabinet approvals advance Colombo Port City’s growth, including 77 businesses of strategic importance and major planned investment. Human Rights & PTA: ITAK MP Shanakiyan Rasamanickam raised EU GSP+ and freedom-of-expression concerns over continued PTA use, including the detention of Hiphop Sangee. Public Services: PM says education will be protected in any crisis, highlighting smart-board and internet expansion. Aviation & Safety: SriLankan Airlines Flight UL606 returned safely to Colombo after a lightning strike.

UN Torture Oversight: The UN Subcommittee on Prevention of Torture will return to Sri Lanka from 15–24 June to check detention safeguards, including how Sri Lanka’s national preventive mechanism is working since the last 2019 visit. Legal Accountability: A fresh debate is swirling around detention under the Prevention of Terrorism Act, with claims of restricted access and deteriorating health for detainees, including Suresh Sallay, ahead of the UN mission. Environment & Trade Controls: The government says it will tighten rules on plastic imports and prevent clinical waste entry, with customs and environment agencies discussing biosecurity steps including animal quarantine centres. Infrastructure Push: Sri Lanka will resume construction of the main airport terminal (second passenger terminal at BIA) in November, targeting completion within 30 months. Indigenous Rights: PM Harini Amarasuriya met Vedda leader Uru Warige Wannila Aththo and promised faster legal measures to protect traditional land rights, plus relief follow-ups after Cyclone Ditwah. Corruption Probe Demand: The Joint Opposition has asked CIABOC chief Neal Iddawela for dialogue over allegations involving senior officials and CIABOC director-general conduct. Fiscal Pressure: CMTA warns a used-vehicle import concession could cost the Treasury around Rs. 40bn this year unless the depreciation rule is changed.

Online Safety: Parliament will debate the Online Safety (Repeal) Bill on June 23, from 11am to 5pm, after party leaders’ decision—an issue that has drawn opposition from civil groups and some media bodies. Aviation Reform: The Cabinet has approved a committee to strategically review and restructure SriLankan Airlines, with the IFC appointed as transaction advisor, aiming to make the carrier financially sustainable and cut the state’s long-term fiscal burden. Digital Payments: SLT-MOBITEL mCash has integrated GovPay, letting users pay government services via mobile—covering traffic fines and thousands of public services through #111# registration and the mCash app. Public Finance: A Rs. 20bn supplementary estimate was passed in Parliament without a vote, framed as a reallocation within approved borrowing limits to provide relief linked to the Middle East conflict’s economic impact. Economy & Industry: Sri Lanka launched a new National Mineral Policy to overhaul the sector after decades of opaque licensing and alleged misuse, with a push for transparency and value-added processing. Human Rights: A UN torture-prevention delegation will revisit Sri Lanka from June 15–24 to assess detention safeguards and meet officials, the HRCSL, and civil society. Sports Diplomacy: FIFA has agreed to support an international-standard stadium in Negombo (Kadolkale), following legal steps tied to BOI land, alongside the launch of the FIFA World Cup Fan Zone in Colombo.

Judiciary & Rule of Law: Parliament heard that Sri Lanka faces a backlog of 1.1 million court cases, with the Justice Minister saying judiciary shortcomings will be addressed soon, as MPs pressed on judge vacancies in the Supreme Court and Court of Appeal. Human Rights Oversight: The UN torture prevention body (SPT) will return to Sri Lanka from 15–24 June after seven years to assess detention safeguards and how earlier recommendations are being implemented. Easter Attacks Accountability: In the Court of Appeal, former SIS chief Suresh Sallay’s counsel argued that senior police officers allegedly failed to prevent the 2019 Easter attacks, while investigations against Sallay are being challenged. Health & Public Safety: Dengue warnings intensified as health authorities reported thousands of premises with mosquito larvae during a nationwide eradication drive, warning of an epidemic risk if action isn’t stepped up. State Capacity & Economy: Sri Lanka is among countries seeking urgent ADB support, with the bank mobilising $4 billion to cushion Middle East-driven pressures on fuel, food, and trade. Aviation Restructuring: A high-powered committee has been appointed to restructure SriLankan Airlines, chaired by Dr. Hans Wijayasuriya. Diplomacy & Courts: The Commonwealth Lawyers’ Association backed BASL against a proposed constitutional change to raise apex court judges’ retirement age, warning it could undermine judicial independence. Energy Planning: The government told Parliament it has forecast El Niño could reduce 127 GWh from the national grid and is preparing alternatives.

Judiciary & Rule of Law: The government says it has not yet secured Cabinet approval to raise the retirement age of Superior Court judges, as protests and legal groups warn the move could deepen disunity in the courts. Counter-Terror & Accountability: Sri Lanka’s Easter Sunday 2019 probe remains politically charged, with renewed focus on who truly masterminded the attacks and how foreign investigations are being used in the local narrative. Anti-Corruption Drive: CIABOC reports 32 arrests for bribery and corruption in the first four months of 2026, spanning education, law enforcement, judiciary, and local government. Public Finance & Debt Reporting: An Auditor General review flags foreign loan balances of Rs. 518.3 bn kept outside the government’s Statement of Financial Position, raising questions on how assets and liabilities are recorded. FX & Export Controls: The Central Bank tightens rules on when exporters must convert remaining foreign currency proceeds into rupees, aiming to improve liquidity and reduce dollar mismatches. Climate Preparedness: President Anura Kumara Dissanayake chairs readiness talks for El Niño impacts, focusing on food security, water, and energy supply. International Cooperation: Sri Lanka seeks deeper France–EU partnership as AFD marks 20 years of operations, with emphasis on water, urban development, renewables, and climate adaptation. Labour & Rights: Sri Lanka engages the ILO on implementing labour reforms, including steps linked to Convention 190 on workplace violence and harassment.

Parliament Oversight Push: A U.S. congressional delegation is in Colombo to help Sri Lanka set up a Parliamentary Budget Office, training MPs and staff on independent, nonpartisan fiscal analysis and budget scrutiny. Corruption Crackdown: CIABOC says 32 state officials were arrested for bribery/corruption in the first four months of 2026, spanning education, law enforcement, judiciary, local government and environmental agencies. Detention Under Fire: The Communist Party says former intelligence chief Suresh Sallay has been held 95 days under the PTA and alleges mistreatment and procedural irregularities, renewing calls for civil rights and due process. Food Security Risk: The World Food Programme warns the Iran war is driving up food and fuel costs and could push millions into severe hunger, including Sri Lanka. Climate Preparedness: President Anura Kumara Dissanayake chaired an El Niño preparedness meeting focused on water, food security and energy impacts. Energy Transition: Government says it has completed procurement for 160MW battery storage and is moving ahead with more storage to boost renewables by 2030. Public Health Alert: Dengue cases have surged past 5,000 in 10 days, raising fears of hospital overload. Coastal Access & Environment: Dehiwala beach access roads were formally named, alongside plans for safer sea-bathing pools and steps to prevent coastal encroachment. Fisheries Logistics: Japan donated six refrigerated trucks to Ceylon Fisheries Corporation to cut post-harvest losses and improve cold-chain distribution.

Easter Sunday Accountability: Sri Lanka’s Public Security Minister Ananda Wijepala told Parliament that retired Major General Tuan Suresh Sallay “conspired with and strategically directed” Islamic extremists in the 2019 Easter Sunday bombings, citing meetings with plot-linked contacts three weeks before the attacks; Sallay denies involvement and has been detained under the PTA. Public Finance & Oversight: Leader of the House Bimal Ratnayake said the “Rebuilding Sri Lanka Fund” is only a named Treasury account (DST) and that donations can’t be used without Parliament approval, as the government moves to enact the enabling Act. Parliamentary Diplomacy: The National Assembly appointed directors for new Parliamentary Friendship Groups, including Sri Lanka’s Henry Parra and other country-designates. Trade Policy: Sri Lanka’s pathway to joining RCEP continues, with officials saying Cabinet committees and responses to the bloc’s questionnaire are underway. Disaster & Safety: Reports link Sri Lanka’s rising drowning deaths to extreme weather and river conditions, with experts warning of monsoon-era currents and erosion. Security/Detention Scrutiny: Lawyers and activists continue pushing for urgent medical care and clearer safeguards around Sallay’s detention.

IMF Review: The IMF cut Sri Lanka’s 2026 growth forecast to 3% and lowered end-2026 reserve projections to $8.645bn, citing higher fuel costs, weaker tourism receipts and balance-of-payments pressure from the Middle East conflict and Cyclone Ditwah, while allowing temporary fiscal easing and approving an SDR 508m disbursement. Public Finance & Tax: Cabinet approved drafting a Bill to amend the Customs Ordinance, following customs restructuring recommendations; separately, the Inland Revenue (Amendment) Act No. 11 of 2026 raises capital gains tax rates (to 15% for individuals/partnerships and up to 30% for trusts and similar entities) and strengthens compliance and enforcement. Trade Rules: CBSL issued updated rules requiring exporters to repatriate and convert residual export earnings into rupees within set timelines, tightening controls on foreign currency handling. Governance for Disability Access: Sri Lanka began a national audit on accessibility and sanitation in government institutions for persons with disabilities, with budget allocation of Rs. 1bn for improvements. Local Development: Cabinet approved Rs. 150m for 26 public sanitation projects under the Clean Sri Lanka Program. Tourism Watch: May tourist arrivals hit a record 145,745 (+10% YoY), though early June arrivals softened. Regional Diplomacy/Industry: Sri Lanka is sending a delegation to the China–South Asia Expo in Kunming to boost South-South trade, and will inaugurate the country’s first boat launching ramp to support marine manufacturing.

Easter Probe & Political Pressure: Sri Lanka’s government warned that anyone trying to threaten officials or obstruct the Easter Sunday terror investigation will face legal action, as Cabinet Spokesperson Nalinda Jayatissa linked recent unrest to foreign travel bans and alleged interference around the probe. Detained Ex-Intelligence Chief’s Health: Suresh Sallay’s wife Manori made an urgent appeal to President Anura Kumara Dissanayake, saying his detention is being extended despite worsening health and alleging medical neglect and torture amid a hunger strike. Central Bank Rules: The CBSL issued an Extraordinary Gazette on “Repatriation of Export Proceeds into Sri Lanka Rules No. 2 of 2026,” tightening timelines for exporters to convert export earnings into rupees after permitted payments. Public Services Under Strain: The Government Physiotherapy Officers Association said recruitment delays have crippled physiotherapy services in some hospitals, forcing patients to seek private care. Governance & Economy Debate: A fresh parliamentary push argued the public sector must be revived for modern needs, while critics warn of inefficiency and weak performance management. Regional & External Links: Sri Lanka also issued congratulations to India’s PM Modi on his milestone as longest-serving continuously elected premier, recalling India’s support during Sri Lanka’s 2022 crisis. Security & Crime: Separate reports flagged drug trafficking arrests involving Sri Lankans abroad, underscoring cross-border enforcement pressures.

Digital Governance: Sri Lanka’s Cabinet has approved drafting a Digital Economy Bill to build a stronger legal and institutional framework for the National Digital Policy, with focus on areas like AI and regulation. Public Service Digitisation: Concessionary railway season tickets for government officials will be fully digitised from July via the Pravesha platform, with institutions registering online and staff applying through apps/portals. Anti-Corruption: A court sentenced former deputy minister Sarana Gunawardena to 16 years for graft-related kickbacks over vehicle and building rentals, continuing the post-Rajapaksa crackdown. PTA and Human Rights: Women parliamentarians urged faster, coordinated action in the Anuradhapura child abuse case, while lawyers’ groups renewed calls for medical care and PTA safeguards in the Suresh Sallay detention controversy. Parliament Oversight: The Committee on Public Finance is set to scrutinise the Treasury’s USD 2.5m cyber fraud case, after lawmakers demanded clarifications and a fuller response from the Central Bank. Maritime Security: Australia and Sri Lanka launched Operation Disi Rela 3, with ATVs and drones donated to the Coast Guard and joint patrols across key coastal areas. Climate/Industry: Sri Lanka set a 13% industrial emissions cut target as part of climate plans toward renewables and carbon neutrality. Health: Authorities inspected 70,000+ premises in a dengue control drive, with legal action planned where breeding sites were found.

Domestic Labour Policy: Kuwait has updated its domestic worker recruitment rules, allowing hiring from 10 countries (including Sri Lanka) while banning recruitment from 27 others, with applications routed through governorate service centres. Human Rights & Justice: Sri Lanka’s Women Parliamentarians’ Caucus has urged authorities to keep the Anuradhapura child abuse investigations strictly aligned with court orders, speed up forensic/medical reports, and reduce repeated trauma across multiple proceedings. Environment & Wildlife: The government says it has cleared three long-blocked elephant corridors—Wetahirakanda, Hadapanagala and Koholankala—aiming to cut human-elephant conflict and set up “Elephant Enrichment Zones.” Public Finance & Banking: CBSL reports the financial system stayed resilient in 1Q 2026, but warns systemic risks are building as the credit-to-GDP gap moves further positive and lending conditions tighten. Financial Sector Moves: Commercial Bank opened a new Port City Colombo branch, while Amana Takaful added two independent non-executive directors. Sports (Sri Lanka-linked): West Indies named a 15-member T20 squad for matches vs Sri Lanka in Jamaica; meanwhile, Sri Lanka’s emerging players posted 302/8 on day one of an unofficial Test against West Indies Academy.

Easter Sunday Justice & Custody: Former SIS chief Maj. Gen. (Ret.) Suresh Sallay has been admitted to Colombo’s National Hospital amid growing claims of ill-treatment, as his hunger strike and a wider dispute over his CID detention intensify; police deny mistreatment and the case remains tied to the Easter Sunday investigation. Rule of Law Pushback: Saliya Pieris (former BASL chief) renewed criticism of PTA/ICCPR Act/Emergency-style laws, arguing they enable prolonged detention and a culture of torture, and that custody decisions must rest with judges. Debt Row: A Sri Lanka Human Rights Centre statement challenges figures cited in a debt-payment report, saying the USD 8.094m figure is accounting totals and that foreign debt rose by USD 788m and domestic debt by Rs. 490bn in early 2026. Macroeconomic Pressure: Central Bank data shows foreigners sold about US$14.7m in government securities in the week to June 4, with continued rupee weakness despite a 100 bps rate hike. Governance & Oversight: UNP questions why a Freedom of Information request about CID travel costs to London remains unanswered for months. Public Health: Dengue cases climbed to 35,228, up 30–40%, prompting a nationwide mosquito-control drive with police and armed forces support. Local Administration: Customs says vehicle imports haven’t fallen as expected after a surcharge, with imports still a major share of Customs revenue.

IMF & Treasury Cybersecurity: The IMF granted Sri Lanka a waiver after a $2.5m missed external debt payment linked to a Treasury phishing scam, saying the breach was “minor” and corrective steps were taken—raising fresh questions about safeguards at the finance ministry. SOE Performance: Sri Lanka’s state-owned enterprises posted weaker overall profits in 2025 as CEB swung from profit to a Rs. 38.7b loss, dragging the sector’s combined earnings down 17.6% to Rs. 444.4b, while other SOEs improved. Political Debate on Defections: A proposed “crossover ban” anti-defection law is reigniting debate over whether it protects voters’ mandates or simply locks power in party leaderships, with government and opposition trading accusations. Legal/Detention Claims: Opposition-linked criticism continues over the treatment of former SIS chief Suresh Sallay in CID custody, with police rejecting claims of mistreatment and his wife alleging torture and denial of medical care. Education Policy: Prime Minister Harini Amarasuriya says Sri Lanka will introduce a common preschool curriculum by 2027, with stronger provincial supervision and monitoring. Tourism & Infrastructure: Prime and Melwa unveiled the Prime Marina Sales Suite at Port City Colombo, while commentary highlights that Sri Lanka’s tourism push still hinges on fixing the first impression—especially Bandaranaike International Airport. Sports (Sri Lanka-linked): West Indies fast bowler Shamar Joseph will miss the final ODI vs Sri Lanka due to personal reasons; Sri Lanka’s cricket scene also intersects with India’s teen call-up story as Vaibhav Sooryavanshi’s parents may travel with him.

Transport Disruption: Private bus operators in Sri Lanka plan to cut services by about 50% from June 8, prioritising only peak-hour school and office routes after fare and fuel-relief requests were not met. Public Administration: Divisional Secretaries and Assistant Divisional Secretaries say they will boycott all Monday official meetings—physical and online—starting June 8, citing Public Day rules meant to keep officials available for citizens. Higher Education Policy: Sri Lanka’s Ministry of Education has opened a public consultation and online survey to shape a new National Higher Education Policy Framework, with input sought from students, academics and stakeholders. Easter Sunday Custody Row: Police rejected claims of mistreatment in the CID detention of former intelligence chief Suresh Sallay, while opposition figures allege a hunger strike over alleged degrading conditions. Regional Cooperation: Nepal’s PM urged BIMSTEC members, including Sri Lanka, to strengthen connectivity and jointly tackle climate change and natural disasters. Food Security Pressure: WFP warns the Iran conflict is worsening hunger, estimating additional acute food insecurity in Sri Lanka alongside Somalia and Afghanistan.

Custody Rights Clash: Sri Lanka Police rejected claims by former MP Udaya Gammanpila that retired Major General Suresh Sallay is on hunger strike and facing inhumane treatment in CID custody, saying he is handled under standard legal procedures and urging restraint since the matter is before courts. Detention Allegations Escalate: A separate formal complaint to the IGP from Sallay’s wife alleges torture, denial of medical care, and degrading conditions, including confinement in a tiny cell, and warns of worsening health. Rupee & Credit Policy Debate: A commentary argues CBSL’s recent rate hike to curb rupee depreciation and private credit growth was reactive, contrasting it with earlier signals and IMF expectations on credit limits. Cybercrime Safe Havens: Another piece flags a growing pattern of cybercrime arrests involving foreign nationals operating from Colombo apartments, pointing to failures in immigration control and regulatory oversight. Agriculture & Rice Prices: Dudley Sirisena criticises the government’s rice import decision for driving down paddy prices and says guaranteed paddy prices distort cultivation choices. Regional Security/Cooperation: BIMSTEC’s SG says the bloc is set to become a stronger platform for regional cooperation and security. Sports Spillover with Sri Lanka Link: West Indies coach Daren Sammy looks ahead to the 2nd ODI at Sabina Park after a first-match loss to Sri Lanka; meanwhile India’s India A and T20 squads include players touring Sri Lanka and the region.