Oct 02, 2008 (LBO) – The Sri Lanka Ports Authority (SLPA) is considering hedging its yen loans after suffering losses owing to currency fluctuations, its acting chairman Priyath Bandu Wickrema said. The SLPA is heavily overstaffed because successive governments have recruited supporters to gain votes.
“Itâ€™s a big problem. We’re discussing with the central bank to hedge or convert yen loans to dollar loans.”
The yen loans were taken in the 1980s to modernise Colombo port and build new terminals which have made the harbour south Asia’s container transhipment hub.
Wickrema said the losses came owing to appreciation of the yen as the loans were taken at a time when the Japanese currency was much weaker.
SLPA officials said the authority had received a hedging proposal from a financial organisation which it was evaluating.
Officials said the SLPA wants to ‘lock in’ protection against exchange rate fluctuations.
The SLPA made a loss of 2.7 billion rupees last year.
The loss was also partly because of salary arrears given to its huge workforce.
The SLPA paid in 2007 the entire retroactive salary increase given in January 2006.