Confusing policy on heavy vehicle imports

Three years after its financial crisis, Sri Lanka is allowing commercial vehicle imports but importers say they cannot open letters of credit at banks to do the same.

The government assured to allow such vehicle imports along with construction equipment, and electric vehicle makers, starting September.

Heavy vehicles including buses, trucks, and tankers can now be imported, according to a government notification issued by President Ranil Wickremesinghe, who is also the finance minister.

One such importer told the Business Times on Monday that when they went to the bank to open a letter of credit (LC), it was rejected by them saying that the Central Bank Import Controller has requested them not to open LC for buses and trucks imports.

Another vehicle importer who was in a foreign country ordering such vehicles to be imported to Sri Lanka was frustrated saying he is said to lose a considerable amount of money because of this inconsistent policy. He added that over the years most of the policy decisions on the motor trade have been taken by the Government without consulting the industry, which is crippling the sector.

After the socio-economic unrest that unravelled a fiscal crisis in the country, Sri Lanka banned imports of all automobiles in the nation to conserve its finances.

The Ceylon Motor Traders Association (CMTA) expressed reservations about the new policy allowing the import of buses up to 10 years old, as opposed to the previous limit of five years by the government when the announcement initially came two weeks ago.

“This change in age restriction could lead to very lower purchasing prices for these buses initially. However, the resulting outflow for vehicle repairs and spare parts can reverse this benefit in the coming years. Such shortterm policy measures should be reconsidered and investigated,” the CMTA said at the time. Buses with a 10-year age or more typically have covered approximately 1 million km, which equates to around 100,000 km per year,” The association said in a media release raising concerns of the environmental and safety impacts of buses that are 10-years of age and their road worthiness, especially if they are not properly tested beforehand.