- Troubled importers appeal to Govt.
- Severe shortage in market
- Risk of transportation sector grinding to a halt
By Imesh Ranasinghe
Motor spare part importers want the Government to declare the spare parts industry as an essential service, giving it priority when opening Letters of Credit (LCs) in banks, as the country is running out of motor vehicle replacements, which could impact many industries.
According to a Lanka Motor Spare Parts Dealers Association (LMSPDA) spokesperson, having motor spare parts is crucial for Sri Lanka since the unavailability of replacements would result in most industries coming to a halt.
He said that even when importers provided dollars to the banks for the purchase of spare parts, after buying them at Rs. 260 or Rs. 265 per dollar from the kerb market, the banks were hesitant to accept the payments as it was not an essential service.
Moreover, he said some importers had already stopped importing spare parts due to the lengthy waiting list at the banks, while some suppliers had also stopped supplying to State institutions.
He added that since new motor vehicles were not being imported to Sri Lanka, the old vehicles running on the road needed constant repairing, resulting in increased demand for spare parts.
“When a retailer requests 10 items from importers, they give only a couple of items,” he charged.
The Ceylon Motor Traders Association (CMTA) said that unofficial restrictions by banks had begun to cripple Sri Lanka’s vehicle fleet maintenance, which would have a direct impact on goods and transport as well as the overall economy.
It said that if the transportation sector grinds to a halt, there would be a severe impact on the main revenue lines of the country, such as exports and tourism, which were heavily reliant on the availability of transport.
“Many vehicle owners are resorting to dangerous patch repairs and usage of non-genuine spare parts and used spare parts imported from overseas junkyards. These practices put vehicle users and the public in great danger,” the CMTA said.
A spare part dealer told The Sunday Morning Business that the stock they currently possessed would be sufficient until April and added that many repairs were undertaken without replacing parts due to the scarcity in the market.
He said that most dealers had shifted to the second-hand market from brand new imports, which were also running low on stocks at present.
Due to the dollar crisis in the country, banks have categorised sectors when making foreign payments, with health, education, and essential commodities being given priority. However, the lack of dollars in the banking system has pushed all imports to the waiting list regardless of the sector, ensuring longer processing times.
According to the Central Bank, official foreign reserves stood at $ 2.3 billion at the end of January 2022. The Central Bank has meanwhile informed banks to give priority to foreign payments.