What Happened, What Mattered and What Comes Next
THE WEEK IN A MINUTE
Sri Lanka’s political and economic landscape during the week was dominated by the judiciary’s examination of the Government’s proposed Protection of the State from Terrorism Act (PSTA), mounting concerns over proposed legislation to combat organised crime, and continuing anti-corruption investigations involving prominent political figures.
Meanwhile, questions over public expenditure, delayed capital investment, the proposed closure or merger of State institutions, and plans to purchase new vehicles for the public service highlighted the tension between fiscal discipline and administrative reform.
Economic concerns persisted as food inflation remained elevated, wheat flour prices became the subject of a dispute between manufacturers and regulators, and fresh IMF forecasts of economic contraction in several Gulf countries raised questions about the future of Sri Lanka’s migrant-worker remittances. Tourism revenue, meanwhile, recorded a second consecutive monthly increase.
Developments in aviation, ports, tourism and industrial policy offered some positive signals, although the cancellation of a major Colombo Port logistics project highlighted the importance of transparent investment frameworks. In sport, Sri Lanka produced a remarkable ODI victory against England and celebrated two gold medals at the Asian Para Games.
In Depth
POLITICS, GOVERNANCE AND ACCOUNTABILITY
The Bribery Commission arrested Sanjaya Samarasinghe, private secretary to SLPP MP Namal Rajapaksa. Namal Rajapaksa and former Krrish Group director Janaki Siriwardhana were further remanded until November 6 over an alleged bribery case connected to the Krrish Group.
Separately, Colombo Magistrate’s Court rejected a bail application by remanded MP Chamara Sampath Dassanayake and his personal secretary in a bribery case, ordering their continued remand until November 6.
Sugeeshwara Bandara, former personal secretary to ex-President Gotabaya Rajapaksa, was also further remanded until October 28 in a case concerning the alleged misappropriation of funds from the President’s Office.
Reports indicated that the Government was pursuing international legal avenues to secure Basil Rajapaksa’s return. The Colombo Fort Magistrate’s Court directed investigators to initiate proceedings to obtain an INTERPOL Red Notice against him.
Former President Gotabaya Rajapaksa’s motion seeking permission to travel abroad for medical treatment was rejected by the Fort Magistrate because of an issue concerning the date stated in the motion.
The Parliamentary Select Committee investigating the release of 323 containers without proper inspection received an extension until December 21. Meanwhile, a committee of 13 MPs was established to oversee implementation of the National Anti-Corruption Action Plan for 2025–29.
State-sector restructuring and public expenditure
President Anura Kumara Dissanayake announced that the Finance Ministry had appointed a committee to examine the closure or merger of 34 State institutions considered unnecessary or inefficient.
The President also announced plans to purchase 1,750 vehicles for the public service. Separately, Cabinet approved purchasing 200 Tata single-cab vehicles for the Sri Lanka Police through Diesel and Motor Engineering (DIMO).
The Government also approved transferring the SAARC Cultural Centre premises at Nawimana, Matara, to the Education Ministry for the establishment of the Ocean University of Sri Lanka.
LAW, HUMAN RIGHTS AND JUDICIARY
The Supreme Court heard the petitions on October 20th and 21stchallenging the constitutionality of the proposed Protection of the State from Terrorism Bill (PSTA).
President’s Counsel Eraj de Silva argued that the Bill could undermine fundamental rights, restrict judicial independence and suppress dissent. He maintained that it should receive approval through a referendum in addition to a two-thirds parliamentary majority.
The Court of Appeal rejected petitions by parties, including Buddhist monks led by Ven. Bengamuwe Nalaka Thero, seeking permission to intervene in former State Intelligence Service chief Suresh Sallay’s writ petition challenging his arrest and detention under the Prevention of Terrorism Act. The court also rejected other intervening petitions seeking to make submissions in the case.
Separately, the Human Rights Commission of Sri Lanka called for the withdrawal and substantial revision of the proposed Prevention of Organised Crime Bill. It warned that the legislation could be more draconian than the PTA and incompatible with constitutional fundamental rights and international human rights obligations.
Former Bar Association of Sri Lanka President Saliya Pieris PC also warned that the proposed law could expose ordinary citizens to arbitrary arrests and prolonged detention, questioning whether its safeguards adequately prevent the misuse of police powers.
Other legal and human-rights developments
A tense situation developed at Vihara Mahadevi Park after police announced that they had obtained a court order to remove Buddhist monks conducting a satyagraha demanding the release of Ven. Galagoda Aththe Gnanasara Thera. The Colombo Chief Magistrate refused lawyers’ requests to withdraw the order.
Former President Maithripala Sirisena blamed officials at the Presidential Secretariat for a technical error in the process of granting a presidential pardon to Gnanasara Thera, claiming the mistake contributed to the monk’s return to prison.
The Acting Commissioner General of Prisons issued an Extraordinary Gazette specifying procedures to be followed when removing the robes of Buddhist monks entering prison.
In another development, Gampaha Magistrate Bandula Gunaratne referred a file to the President of the Court of Appeal to initiate proceedings against the Inspector General of Police over alleged contempt of court, following non-compliance with court orders in two drug-related cases.
The Criminal Investigation Department launched a fresh line of investigation into the 2019 Easter Sunday attacks, seeking to question three convicted individuals who reportedly told court that others connected to the attacks remained at large.
LAW ENFORCEMENT AND PUBLIC SECURITY
The Sri Lanka Navy and Coast Guard seized sacks suspected of containing narcotics at Thalalla beach in Galle on October 24. Subsequent findings indicated that the consignment included 200 packets of ICE and 275 packets of heroin, weighing a combined 475 kilograms.
Separately, Customs’ Narcotics Control Unit seized narcotics, including Kush and cannabis, valued at more than Rs.67 million at the Central Mail Exchange.
The Cabinet Spokesman disclosed that law enforcement agencies had seized more than 3,500 firearms between January 2025 and October 2026, alongside thousands of kilograms of heroin, crystal methamphetamine, cocaine and other narcotics.
Public Security Minister Ananda Wijepala told Parliament on October 23 that special operations were being conducted with international law enforcement agencies to bring back organised-crime and drug-trafficking masterminds operating overseas.
Sri Lanka has detained 66 Indian fishing trawlers so far this year, Chief Government Whip Nalinda Jayatissa told Parliament.
In a separate incident, a restaurant owner was killed in a shooting in Moratuwa.
ECONOMY, INFLATION AND PUBLIC FINANCE
National Consumer Price Index data showed that year-on-year inflation remained at 8.1% in September, unchanged from August. Food inflation, however, increased from 6.6% to 6.9%.
Wheat flour prices became a particular source of controversy. Manufacturers increased the price by Rs.13 per kilogram, but the Consumer Affairs Authority said it had not approved the increase and was conducting raids against traders charging the new price.
Capital expenditure and budget accountability
Sri Lanka had spent only approximately Rs.385 billion of the Rs.1.38 trillion allocated for capital expenditure during the year. The substantial underspending has renewed scrutiny of procurement delays and bottlenecks in implementing public investment projects.
Opposition Leader Sajith Premadasa challenged the Government to disclose the implementation status of the 2026 Budget before presenting the proposed 2027 Budget, arguing that Parliament should be informed about expenditure and the delivery of promised development programmes.
The Government approved the publication of a draft bill establishing a formal legal framework for public-private partnerships (PPPs), which will subsequently be presented to Parliament.
Cabinet also approved a new credit-risk assessment methodology for financial institutions, aligned with the Public Debt Management Act.
The Inland Revenue Department and Excise Department signed an agreement to share intelligence to prevent tax evasion and money laundering.
International economic risks
The IMF’s October 2026 World Economic Outlook, released during the IMF-World Bank Group Annual Meetings in Bangkok this month, projected sharp recessions this year in Kuwait, Qatar, Bahrain, the United Arab Emirates and Saudi Arabia.
The forecasts are particularly relevant to Sri Lanka because migrant-worker remittances constitute a critical source of foreign exchange. Economic contraction in Gulf economies could affect employment opportunities, wages and remittance flows.
EMPLOYMENT, INDUSTRY AND BANKING
Opposition Leader Sajith Premadasa warned that a possible relocation of HSBC Global Service Centre operations from Sri Lanka to the Philippines could cost the country thousands of jobs.
Sri Lanka plans to increase the share of land allocated for industrial development from 0.03% to at least 1% by 2030, while attempting to maintain environmental sustainability.
The Parliamentary Sectoral Oversight Committee on Economic Development and International Relations called for the speedy implementation of the Microfinance and Credit Regulatory Authority Act to strengthen oversight of lending institutions and protect borrowers from excessive interest rates.
Official data showed that growth in new active bank credit cards continued in July and August after slowing in June.
Fitch Ratings recalibrated its Sri Lanka National Rating scale to reflect changes in the relative creditworthiness of domestic issuers.
The Asian Development Bank approved US$100 million in financing to support reforms and investments aimed at strengthening social protection, economic inclusion, and resilience of poor and elderly people.
TOURISM, AVIATION AND PORT DEVELOPMENT
Tourism foreign-exchange revenue rose for a second consecutive month in September, increasing 1.5% year-on-year to US$185.6 million, according to Central Bank data citing tourism promotion authority figures.
British Airways recommenced services between London Gatwick and Colombo after a ten-year absence, operating three flights a week.
Galadari Hotels announced that its landmark Colombo city hotel would reopen as the Radisson Blu Hotel Galadari Colombo during the fourth quarter of 2026.
Sri Lanka reportedly agreed to pay US$21.9 million to settle investments associated with a proposed China Merchants-backed logistics hub at the Colombo Port after the parties agreed to abandon the project. The original initiative had been granted extensive tax concessions and exclusive operating rights.
The Sri Lanka Ports Authority will now seek a private partner through competitive bidding to develop a new logistics hub, following cancellation of the earlier US$380 million joint venture.
TRANSPORT, ADMINISTRATION AND PUBLIC SERVICES
The Department of Motor Traffic expects to clear a backlog of 634,000 driving-licence cards by April 2027. Three new printing machines are expected to increase production capacity, although procurement and administrative delays remain concerns.
The Government is planning to introduce mandatory vehicle roadworthiness testing in early 2027, in addition to existing emissions testing. The Department of Motor Traffic is considering inspections at intervals of approximately 5,000 kilometers or three months.
The Justice Ministry set January 31, 2027, as the deadline for establishing a system to issue Government Analyst reports within three months.
The Department of Prisons reported that the prison population had fallen by approximately 6,000 inmates following the expedited release of Government Analyst reports. Faster reporting has enabled more suspects to obtain bail, reducing the number held in custody.
EDUCATION AND HEALTH
Cabinet approved drafting legislation to amend the Ayurveda Act to improve the efficiency of the Ayurvedic sector, strengthen regulation, facilitate export licences for indigenous medicines and achieve sectoral development targets.
Cabinet also approved continuing the Suraksha student insurance scheme, with additional benefits, until August 31, 2027.
SPORTS ADMINISTRATION AND INTERNATIONAL ACHIEVEMENTS
The Government temporarily suspended the registration of the National Sports Association for Automobile Sports and appointed the Secretary to the Ministry of Youth Affairs and Sports as Competent Authority until new office-bearers are elected under the amended constitution.
Separate Extraordinary Gazette notifications temporarily suspended the registrations of the Cycling Federation of Sri Lanka and Sri Lanka Badminton.
Sri Lanka’s sporting achievements provided a welcome contrast. Pradeep Somasiri won gold in the men’s 1,500 meters T46 event at the Asian Para Games in Aichi-Nagoya, Japan. Janani Dhananjana also won gold in the women’s long jump T47 event.
In cricket, Sri Lanka defeated England by two wickets in the Pakistan ODI Tri-Series after chasing 430 runs, the highest successful ODI chase in Sri Lanka’s history and the second-highest in international ODI cricket. England scored 429 for four, while Sri Lanka reached 430 for eight in 49.5 overs.
Sri Lanka Cricket announced that England’s women’s team would tour Sri Lanka in January 2027 for ODI and T20 international series in Kandy and Dambulla.
APPOINTMENTS, FOREIGN AFFAIRS AND OTHER DEVELOPMENTS
Senior Professor Ven. Gallelle Sumanasiri Thero was appointed Chancellor of Sabaragamuwa University of Sri Lanka.
Major General Sampath Fernando was appointed Chief of Staff of the Sri Lanka Army.
Two Sri Lankan women were found dead in separate incidents in Kuwait, according to local media reports. Kuwaiti authorities are investigating both deaths.
Flights between Colombo and Dammam, and Colombo and Riyadh, remained suspended through November 1 because of the prevailing regional security situation.
A Skills Development Officer attached to the Ehetuwewa Divisional Secretariat was arrested by the Walana Anti-Vice Unit and Wildlife Department officers on suspicion of shooting the tusker Kavantissa. Two locally made firearms and 24 rounds of ammunition were reportedly recovered.
President Anura Kumara Dissanayake appointed an expert committee to investigate the elephant’s death and recommend standard operating procedures for wild-elephant welfare and a national elephant conservation programme. The committee is expected to submit its final report within 30 days.
WEEK IN NUMBERS
– 8.1%: Year-on-year national inflation in September.
– 6.9%: Year-on-year food inflation in September.
– Rs.385 billion: Capital expenditure reportedly utilised against an allocation of Rs.1.38 trillion.
– 634,000: Driving-licence cards awaiting clearance, with the backlog targeted for resolution by April 2027.
– 475 kg: Heroin and ICE reportedly recovered in the Thalalla beach narcotics seizure.
– Rs.67 million-plus: Value of narcotics seized at the Central Mail Exchange.
– 3,500-plus: Firearms seized by law enforcement between January 2025 and October 2026.
– 66: Indian fishing trawlers detained by Sri Lanka so far this year.
– US$185.6 million: Tourism foreign-exchange revenue in September.
– US$100 million: ADB financing approved for social protection and economic inclusion.
– US$21.9 million: Reported settlement relating to the abandoned Colombo Port logistics project.
– 430 runs: Sri Lanka’s successful ODI chase against England.
WHAT MATTERED
The week of October 18–24 exposed the challenge confronting Sri Lanka: translating political promises into accountable institutions, efficient public administration and sustainable economic progress.
The Supreme Court proceedings on the PSTA and warnings over organised-crime legislation have placed civil liberties and the rule of law firmly in focus. Anti-corruption investigations continue, but their long-term significance will depend on credible outcomes and equal treatment under the law.
Economically, persistent inflation, weak capital-expenditure execution and uncertainty over employment and remittances underline the fragility of the recovery. Tourism and aviation offered encouraging developments, while the proposed re-tendering of the Colombo Port logistics project presents an opportunity to improve investment governance.
The Government’s performance will increasingly be judged not by announcements, committees or legislative proposals, but by implementation: whether public money produces results, whether institutions respect the law, whether investment creates jobs and whether ordinary citizens experience meaningful improvements in their lives.
WHAT COMES NEXT – THE WEEK AHEAD
1. Supreme Court communication on PSTA: The Supreme Court’s examination of the proposed counter-terrorism legislation and the communication to the Speaker of Parliament will be closely watched for its implications for fundamental rights, judicial independence and the Government’s promised legal reforms.
2. Prevention of Organised-crime legislation: The Government will face growing pressure to address human-rights concerns surrounding the proposed Prevention of Organised Crime Bill and demonstrate that its safeguards prevent arbitrary detention and abuse of police powers.
3. Anti-corruption investigations: Developments in cases involving Namal Rajapaksa, Chamara Sampath Dassanayake and other political figures will test the independence and credibility of enforcement institutions.
4. Budget implementation: Parliament will need clearer answers about the low utilisation of capital expenditure and the delivery of projects promised under the 2026 Budget, ahead of the proposed 2027 Budget.
5. Cost-of-living pressures: Wheat flour pricing, food inflation and the regulator’s enforcement response will remain important indicators of household economic pressure.
6. Remittances and employment: The outlook for Gulf economies and concerns about the possible relocation of HSBC operations will test Sri Lanka’s capacity to protect foreign-exchange inflows and retain high-value employment.
7. Colombo Port investment: Attention will turn to the terms of the reported US$21.9 million settlement and the proposed competitive bidding process for a replacement logistics hub.
8. Public-sector reform: The proposed restructuring of 34 State institutions and procurement of new public-service vehicles will require transparent justification and measurable outcomes.
9. Administrative efficiency: Progress on clearing driving-licence backlogs and establishing a three-month turnaround for Government Analyst reports will be important tests of the Government’s capacity to improve public services.
10. Wildlife conservation: The expert committee investigating Kavantissa’s death is expected to submit its report within 30 days, potentially shaping future elephant-conservation policy.
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