Sheltering the nation through 10 year horizon development

The Ten-Year Horizon Development Framework emphasizes the importance of sheltering the nation through an adoption of new parameters based on criteria such as population density, land suitability and environmental sustainability, stated the Central Bank of Sri Lanka Annual Report 2007.

Therefore, housing development should take into account changing lifestyle of people, demand for amenities, nature of livelihood and other determinates. Adoption of vertical development approach in urban areas and retaining dispersal developments in rural areas is needed. The participation of both the public and private sector is also equally important for the smooth implementation of housing programmes, while minimizing cross-cutting issues. Meanwhile, the development strategy of the housing sector highlights the need of a well functioning mortgage finance system including a secondary mortgage finance system including a secondary mortgage market, which can cater to the housing needs of the public.

Several key issues remained as challenges for the development of the housing sector. A lack of coordination and consistence between facilitating agencies is one of the bottlenecks faced by the housing sector. The shortage of suitable lands for residential purpose in urban areas, rapid escalation of the value of lands in major cities and suburbs, blocking out and selling lands by private developers without proper utilities, poor maintenance of urban housing schemes and burden on the government to maintain them and a lack of skilled labour in the construction sector constrained the development of the housing sector, the report stated.

The Urban Development Authority (UDA) initiated several mega projects throughout the country with special attention to the backward regions of the country. In 2007, major projects implemented included the Greater Hambantota Development, Greater Dambulla Development, greater Galle Development; Trincomalee Metro Development would act as catalysts for urban development in these regions while facilitating the rural development of the surrounding areas. Total expenditure on urban development projects amounted to Rs. 984 billion in 2007, the report noted.

- CdSFitch Assigns ‘F1(lka)’ National Short-term Rating to People’s Leasing Co.’s Proposed Debenture Issue

Fitch Ratings Lanka yesterday assigned a National Short-term rating of ‘F1(lka)’ to Sri Lanka-based People’s Leasing Company (PLC) Limited’s proposed 12 month debenture issue of up to LKR200 million.

A ‘F1(lka)’ National Short-term rating indicates the strongest capacity for timely payment of financial commitments relative to other issuers or issues in the same country. Where the creditworthiness is particularly strong, a "+" is added to the assigned rating within the ‘F1(lka)’ category.

The assigned rating reflects its good access to borrowings from local banks and the availability of committed undrawn credit lines of approximately LKR651m as at 10 June 2008 - a function of PLC being one of the larger, more established specialised leasing companies in the country. Fitch also derives comfort from the fact that People’s Bank (Sri Lanka) (‘A-(lka)’ (A minus)/Positive Outlook) owns 100% of PLC’s equity.

The rating is constrained by PLC’s inability, as a non-bank financial institution, to access the Central Bank of Sri Lanka’s discount window. The above rating is also credit linked to PLC’s national long-term rating of ‘A-(lka)’ (A minus)/Stable Outlook, and could be affected by changes to the latter, as well as an adverse shift in the maturities of PLC’s interest bearing assets and liabilities.

Established in 1996, PLC is a wholly-owned subsidiary of People’s Bank, and enjoys a market share of around 10% of the leasing industry.

People’s Bank owns 1.78% of the shares in Fitch Ratings Lanka Limited. No shareholder, other than Fitch Ratings Limited of the UK, is involved in the day-to-day operations of, or credit rating reviews undertaken by Fitch Ratings Lanka Limited.

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