Features
Improvements to Kelani Valley Railway – A response from a laymon
BY Dr Janaka Ratnasiri
This piece is written in response to a letter published by a former General Manager of Sri Lanka Railways (SLR) in The Island of 29.10.2020 under the heading “Improvements to Kelani Valley Railway”, highlighting a difference of opinion as to whether the stretch up to Homagama should be elevated or not.
PREVIOUS PROPOSALS FOR IMPROVING THE KV RAILWAY
In response to an Island Editorial titled “Ailing Railways” which appeared on 02.12.2015, the writer wrote a piece proposing a solution to ailing railways which was published in The Island of 08.12.2015. This piece may be accessed via: http://archive.island.lk/index.php?page_cat=news-section&page=news-section&code_title=49. In the Budget for 2016, the government has allocated a sum of LKR 1.5 billion to modernize the Kelani Valley (KV) railway line. The writer proposed that once the KV line is modernized, it could be leased to a private party to provide an upgraded railway service as a public-private venture.
He also said in this piece that “With the increase of frequency of trains, one problem one could envisage is the congestion that could be created due to frequent closure of railway crossings. The solution for this is to build fly-overs at every point where a major highway crosses a railway line. The government could get the assistance of the private sector here too by getting them to build metal flyovers similar to what has been erected at Nugegoda and Dehiwala. They have to just copy what is installed”. However, there was no news that any action was taken to spend this money for improving the KV line.
BROADGUAGING THE KV RAILWAY LINE
In the writer’s piece referred to above, he said that “A few decades ago, the narrow gauge of KV line was broadened to the standard gauge at Sri Lankan Government expense but the service was not improved concurrently. Only the dilapidated aged coaches and power sets operate on this line which run infrequently. According to the railway schedules posted in the Railway Dept. (RD) website, only four trains operate from Avissawella to Fort daily, three in the morning and one in the afternoon, while five trains operate from Fort to Avissawella, three in the morning and two in the evening. It takes about two and half hours to cover the distance of 61 km, which is running at an average speed of 24 km/h.
At such operating conditions, it is not surprising that most passengers, except those travelling on cheap government season tickets, prefer to travel by bus despite they are crowded and the service is poor. The High Level Road (HLR) is almost saturated with buses and there is no room to increase their number plying on this road, without slowing down the existing traffic further. Hence, shifting of bus commuters to railway is necessary. However, even after any modernization of the track envisaged after spending the allocated Rs. 1.5 billion, there is no guarantee that the KV line will be provided with additional rolling stock and a better service to the commuters”. This situation has not improved during the last five years.
CURRENT PROJECT FOR IMPROVING RAILWAYS
Sri Lanka sought a loan from the Asian Development Bank (ADB) in 2016 for assistance to modernize the Colombo Suburban Railways covering stretches from Colombo up to Rambukkana, Kalutara, Negombo and Awissavella. The ADB agreed to lend USD 160 million on concessionary terms and the agreement was signed in July 2016 to undertake feasibility studies and detailed design of the system.
Already a sum of USD 10 million has been mobilized for preliminary work. The segment on the KV line included rehabilitation, capacity upgrade, modernization, and electrification of the KV line between Maradana and Padukka with double tracks in this section. After studying several options, it has been decided to have the section of 20 km from Maradana to Malapalla elevated. The section between Padukka and Avissawella will remain as a single track, following mostly the existing track. (See https://www.csrp.lk/kelani_vallay_line.php?id=3)
Under this programme, the design of infrastructure including railway stations, tracks and other facilities including electrification and communications are underway according to a video clip available in the above site. The preparation of detailed designs and bid documents are expected to be completed in December 2020. A copy of the final feasibility report of the project is available on https://www.csrp.lk/backend/documents/Kelani%20Valley%20Railway%20Final%20Feasibility%20Study%20Report%20-%202019-04-11.pdf.
Further, a detailed socio-economic survey has been conducted to identify affected families living on railway reservation land between Maligawatte and Malapalla and their resettlement is planned including construction of multi-story housing for them, both in Colombo and in Malapalla. The Cabinet approval was granted for the project on 17.10.2017 and to set apart houses built by the Urban Development Authority to resettle the families encroaching the lands to be used for the development of the KV Railway Line.
PROPOSED OPERATION OF THE NEW SYSTEM
According to the above feasibility report, electric multiple units (EMU) will operate during peak hours at seven minutes intervals between Maradana and Makumbura North (a new station) and at 14 minutes intervals between Makumbura North and Padukka. Diesel multiple units (DMU) will operate at 30 min intervals between Padukka and Avissawella until such time this section is electrified. The travel time from Padukka to Maradana during peak hours is estimated to be 64 minutes with stopping at all stations.
Each coach could accommodate 200 passengers, but only 40 seating capacity will be provided in each coach. Seats are fitted longitudinally leaving more room for standing passengers. Each EMU will comprise 10 or 12 coaches, with capacity of 2,000 and 2,400 passengers respectively. So, most passengers will have to keep standing during their entire travel. There is provision to operate express trains with stops only at a few major stations.
For the regular traveler, a more desirable option is to have a combination of coaches with longitudinal seats and transverse seats. With the latter, seating capacity will be increased but overall capacity reduced. The coaches with transverse seats could be offered at a higher fare in a different class. Passengers may not mind paying extra fare if they are assured seating for over an hour-long ride from Padukka to Maradana.
The EMUs will be powered by electricity supplied through an overhead catenary system (OCS) operating at 25 kV connected by a pantograph to the coaches using rails as the return path. The project proposes to feed power to the OCS system from the 132 kV grid substations at Pannipitiya and Kosgama. During day time, the national grid has adequate capacity to feed the EMU operations. However, one risk factor is the unexpected power failures in the national grid encountered occasionally, in which event the EMUs will get stranded until power is restored. Perhaps the CEB may be asked to give priority to these two GSSs when restoring power.
IMPROVEMENTS TO THE TRACK UP TO AVISSAWELLA
The original KV line was built mostly following the contour of the highlands and hence comprised many bends with short radius of curvature. This is unlike the HLR built in late forties by American contractors which was mostly a cut and fill exercise. If one examines the present trace of the KV line up to Makumbura, there are several places where the track could be straightened. According to the Final Feasibility Report, the curves at many of the places seem to have been straightened or curves realigned with larger radii of curvature.
In addition, straightening the stretch between Hokandara Road crossing and Athurugiriya Road crossing will avoid several bends and reduce the distance from 1.83 km to 1.56 km. Further straightening the stretch between the Malabe Road crossing and Makumbura will reduce the distance from 1.56 km to 0.85 km, resulting in an overall reduction of about one km distance.
The stretch between Padukka and Avissawella is supposed to follow the existing track. The railway line between Kosgama and Avissawella crosses the A4 highway at four places. Since it is expected to run trains at 30 min intervals during peak time in this stretch in one direction or at every 15 min if both directions are considered, there will be congestion on the highway unless fly overs are built at these crossings. Alternatively, the track could be re-laid to avoid the crossings altogether.
There is also the ambiguity with regard to the section to be elevated. The Final Feasibility Report says it is up to Kottawa in some places and as Makumbura North in other places. The project website gives it as Malapalla. The former GM says that the railway line to be elevated is up to Homagama.
OPERATION AND MAINTENANCE OF THE NEW LINE
Once the new system is built by the foreign contractors, it has to be operated and managed by a competent organization. Being the owner of the project, SLR may want to do that, particularly because all trains operating in Sri Lanka are required to be driven and guarded by SLR staff according to the law. However, the question is are they the most suitable for the job? The archaic rules and regulations, the attitude of staff, lack of interest in passenger care, low level of maintenance and neglect of existing tracks, dominance of trade unions in operative matters would necessitate the government to rethink on who should be entrusted with the task of operating and managing the new system.
The SLR is dominated by Mechanical Engineers. Their inability to operate and maintain electronically controlled trains was amply demonstrated in the case of the 10 Locomotives from Alstom of France imported in 2000. After a short spell of operation, they developed various problems and efforts made to get them attended to by the manufacturers were not successful. Though the manufacturer trained the SLR staff in maintenance and gave them maintenance kits, it was reported that they did not have the background knowledge to assimilate the training given and as a result most of the locomotives had to be taken off service (Ceylon Today, 08.02.2014). Although SLR found these locomotives unsuitable here, India entered into a contract with Alstom to manufacture 800 locomotives in India, delivering 100 units annually.
It is therefore imperative that the new train system be leased to a private party to operate jointly with SLR drivers and guards, and the private party given the full responsibility for its operation and management including maintenance. The private party could be even a foreign company having the experience in managing similar railway systems in their own countries. This could be tried out at least initially until such time a local company staff are trained and ready to take over.
PLANS FOE FUTURE EXTENSION OF KV LINE
The former GM speaks about “the new infrastructure provided should be able to be utilized for any future extensions beyond Avissawella”. The website of the Colombo Suburban Railway Project (https://www.csrp.lk/about-us.php) has described several new railway lines to be built in the foreseeable future. One is the construction of a railway line from Kurunegala to Habarana via Dambulla, a distance of 81 km, for which the Feasibility Study has been completed. Another is the extension of KV line from Padukka to Nonagama via Ingiriya, Ratnapura and Embilipitiya to link with the Southern railway line. It is noteworthy that this trace bypasses Avissawella.
The KV line was first built from Colombo to Yatiyantota via Avissawella during 1900–1902 to serve the plantation community in Sabaragamuwa. It was branched off at Avissawella and extended up to Opanayaka via Ratnapura in 1912 (Wikipedia). Hence, today there is no necessity to retrace the old track to Ratnapura via Avissawella when there is a shorter route available via Ingiriya.
Furthermore, this stretch is heavily encroached and it will be a difficult task to claim it back. Even the Ruwanpura Expressway is planned to traverse via Ingiriya to Ratnapura. However, such investment on building new tracks is justified only if investments are made to acquire the necessary rolling stock to maintain a regular service.
FUNDING OF THE PROJECT
The project feasibility report gives the estimated investment required for the project as USD 1,424 million (M) comprising USD 700 M for track construction, USD 250 M for rolling stock, and USD 300 M for other infrastructure development and feasibility studies. Financial analysis of the project shows that project cash flows are not sufficient to fully recover the investment cost of USD 1.42 billion or LKR 263 billion.
According to the feasibility report, even though the Project cash flows are not sufficient to fully recover the total investment and associated cost of funding, it could recover approximately 21% of the investment cost and related cost of funding under 30-year analysis and it can go up to 27% with 50-year financial evaluation. Recovering the rest of the investment costs and paying the related cost of funding could not be made with project cash flows generated thus the government needs budgetary allocation from common public funds for the same which is the usual case with public sector railway projects in many countries.
On the other hand, the project operational and maintenance costs and replacement costs can easily be recovered with railway tickets and other income of the KV line. Accordingly, the project does not require government subsidies for meeting operating costs. It is also expected to generate wide economic, environmental and social benefits which cannot be monetized directly. It is therefore envisaged that funding could be raised through loans from commercial financial institutions and multilateral agencies in addition to government contributions.
RESERVATIONS EXPRESSED AGAINST THE PROJECT
Some independent consultants, including the former GM, are now questioning the desirability of elevating of the stretch from Maradana to Malapalla. It is surprising why these professionals are now making objections for elevating the track up to Malapalla at this late stage. He seems to be concerned about the high cost of the project, “the return on investment, and the impact of the solution to the country as a whole, in relation to financing of foreign loans”.
The former GM says “I believe there were two main excuses to recommend elevation; one was the acquisition of land or let me mention in a more prudent way, it is relocation of encroachments presently occupying railway land, and the second is the number of level crossings presently at-grade”. He goes to great length explaining how level crossings could be built economically in the event the tracks are laid on the surface including building fly overs and under passes quoting practices in other countries.
One excuse he gives against elevated line is that elevation “requires the provision of escalators and elevators for stations in the elevated sections required to be maintained, and in case they are not maintained, the general public will suffer when they have to climb 7m (the height of two floors of a building) to the station platform”. Escalators are used world over for mass transport of people between different elevations, though the former Railways GM thought they are not good enough for Sri Lanka. That may be the reason why none of our railway stations have any escalators installed.
Some experts are of the view that the electrification of sections on the main and coastal lines should have been given priority rather than developing the KV line. See http://www.themorning.lk/railway-project-on-hold-rs-40-b-dent-on-state-coffers/. The lobby against the project is so strong that they were trying to influence the ADB which certainly does not sound ethical for professionals. A more appropriate course of action would have been to get it sorted out internally (http://www.themorning.lk/after-jica-govt-removes-adb/). It appears that these moves have resulted in getting the project stalled.
CONCLUSION
A loan of USD 160 million from the ADB has enabled the SLR to study modernization of its suburban railway lines including their electrification which has been long overdue. Under this project the KV line up to Makumbura North will be elevated, with double tracks up to Padukka. The track beyond Padukka up to Avissawella will remain single track without electrification but with improvements. Detailed designs are being carried out including resettlement of displaced families. It is expected that the project will be implemented soon despite objections raised by some professionals on frivolous grounds.
It is also important to hand over the operation and management of the new railway to an experienced and competent party until such time the local personnel are trained and ready to take over. With objections raised against the project by certain quarters, it is sincerely hoped that the government will not abort the project, the way the Light Rail Transit project was aborted recently. It is expected the government will be able to secure funding for the project through offers made by foreign ambassadors from friendly countries and various visiting foreign dignitaries for assistance to develop the country.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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