Features
Aitken Spence breaks into hotels
by Charitha. P. de Silva
At about this time (1972) Mrs B’s government introduced tax incentives to encourage the building of hotels. I had already indicated to the directors and executives that our expansion would be confined to activities that gave employment and earned foreign exchange. This was based on my belief that all governments regardless of their political hue would support such activities. I had also made it clear that we would not go into a particularly lucrative source of income, construction, and other government tenders. This was because I was well aware that tenders involved bribery.
One thing I had repeatedly stressed to my staff was that we had to be scrupulously honest in all our dealings, even if it meant loss of business opportunities. This attitude became particularly relevant when the head of Printing, Stanley Wickramaratne, told us that we were losing business because it was customary in the printing trade that kickbacks had to be given to the purchasing departments of our clients. He claimed that we would not be able to survive if we did not do what every other Printer was doing.
I was totally against it because I realized that giving kickbacks would inevitably lead to the corruption of our own employees as kickbacks were cash transactions and receipts were never given for them; and in the course of time some or all of the kickbacks would find their way into the pockets of those of our employees that had to make the payments. It is because of principles such as this that Aitken Spence soon gained a reputation for honesty that was to be a source of protection for me throughout my career.
It also clearly established that Honesty was a guiding principle in our company. It is my view after a career of over 50 years in the private sector that the integrity of a company is determined by the integrity of the top man. If the top man is bent the whole organization will gradually become corrupt.
Michael (Mack), who was a man full of ideas, came up with the proposal that we should build a seaside hotel. Even though we had no experience in this area we studied the feasibility of diversifying in this direction. The tax incentives given by the government made it a very attractive proposition. When we decided to go ahead with it, Michael came up with the idea that we should build our first hotel on his land in Uswetakeiyawa. Browns already had a hotel in that area, so that the proposition seemed reasonable.
However, I was aware that water was not readily available there. In fact, the Rasaratnams (Susheela’s cousins) were selling water on a regular basis in bowsers from a well they had on their property in Hendala. I insisted that we get reports on the availability of water before we embarked on the project. I also wrote a cautionary memorandum on the pros and cons of a hotel project, pointing out that some factors outside our control such as an outbreak of disease could keep tourists away. At that stage nobody anticipated the disastrous effects of terrorism that later affected tourism for many years from 1983 onwards.
On the grounds that lack of water was an insurmountable drawback we decided that Hendala was not where we should site our first hotel. Michael would have been bitterly disappointed but should have realized that there was a serious conflict of interest in promoting the use of his own land. It was significant (and unfortunate) that his close friend Norman (Gunawardene) supported his proposal despite its drawbacks. Fortunately, the others went along with me.
I instructed (Ratna) Sivaratnam who was Michael’s lieutenant in the hotel project to scour the Southern beaches up to 50 miles from Colombo looking for suitable sites. Within a few weeks he came back with about four possible locations from Wadduwa down to Beruwela. All the directors piled into two cars and drove down one Saturday to examine all the sites. When we got to Beruwala, the tide was out and the beach looked gorgeous. We picked on that site and at Michael’s urging chose Geoffrey Bawa to be the architect. I suggested that the name of the hotel should be Neptune (Roman God of the Sea) to which all agreed.
We built Neptune over a period of three years starting from 1974. We built it in stages, first the central block, then the one on the right and finally that on the left. This was in order not to put too great a strain on our cash flow. The first two blocks had been two storied but when it came to the third, Bawa decided to make it three stories. However, when I visited it in its early stages I could not see it, lacking visual imagination. I sent for him, sat him opposite me and told him with some concern that I could not see signs of his brilliance.
Being very much a layman I protested to him saying that it would look odd, being asymmetric. He smiled gently and told me not to worry, and assured me that nobody would notice it because you could not look at both blocks together! He was absolutely right. Bawa’s brilliance was easily discernible. One feature of the design was the swimming pool was right alongside the dining area. He had originally designed a separate kiddy’s pool some distance away from the main pool. I prevailed on him to design the main pool so that kids could swim in shallow water under the eyes of their parents.
He did so with a maximum depth of four feet. The four-foot depth suited me too (I could never swim in deep water). It was a great success. When it came to furnishing the suite at the corner of the right wing, I was so happy with the project that I told Bawa to do whatever he wanted. He was delighted to be given a free hand and went to town putting in a four-poster bed and antique furniture. It was later my favourite room even though I resisted the temptation to take advantage of the tradition in many hotels that the Chairman had the best room reserved for himself.
The whole project, our first venture into hotels was a total success. We made profits from day one,
more or less. Our German tour operators were delighted with it and wanted us to build another seaside hotel. We first had to find another site. Once again we piled into two cars and visited the three or four sites that Sivaratnam had identified. When we got as far as Ahungalla we found a wide beach of golden sand. There was no doubt about its beauty. However, when it came to purchasing the land we were faced with a great difficulty. The land had to be purchased in small blocks and the title was what was called ‘Village Title”, in other words no real title.
The entire fifteen acres that we wanted were purchased over a number of years, and we signed about 150 deeds! This eventually created a problem when it came to the valuation of the land. Aitken Spence had bought the land after painful negotiations with a large number of individuals. As was to be expected we had to pay premium prices for the last few blocks that we purchased.
For the Ahungalla project we floated a separate company, Ahungalla Hotels Ltd. and we transferred the land to that company. The project was being financed by the National Development Bank whose Chairman was my cousin, C.A. Coorey. (Chanda Coorey was a brilliant [First in Chemistry] former Civil Servant who had been the Secretary to the Treasury and a director of the Asian Development Bank in his time. He and the legendary Baku Mahadeva had vied with each other for first place in class throughout their school careers at Royal College.)
According to the agreement with the NDB the price at which the land would be transferred by Aitken Spence to Ahugalla Hotels Ltd. was to be based on a valuation done by the best-known Valuer at that time. This was all a part of our agreement with the NDB. When his valuation was eventually given to the NDB Chairman, Chanda Coorey, he refused to accept it. What had happened was that the General Manager of the NDB, V.K. Wickremesinghe had advised him that the price was too high. VKW was not a Valuer, and I can only surmise that he was advised by his brother S.K. Wickremesinghe who was the Chairman of Chemical Industries Co. Ltd. and Chemanex. S.K. was buying land further down South for a hotel project and must have known something about land prices in those regions. However, he probably bought the land for his project in one transaction with one seller, which was vastly different to what we were compelled to do with over 150 sellers over a number of years with the price escalating with each purchase.
Be that as it may, here was I confronted by a refusal on the part of the NDB to honour their agreement with us. I tried to speak on the telephone to Chanda, with whom I was on very good terms, but he was not prepared to discuss the matter. I thereupon wrote a very strong letter to the Chairman (Chanda) with open copies to the other directors, who included strong men like Dr H.N.S. Karunatilleke, Governor of the Central Bank. I complained that the NDB that was a Development Bank was, in the quest for greater profits, behaving in a way that not even a commercial bank would stoop to. Chanda had to eventually increase the price paid for the land though he did not accept the exact figure given by the Valuer, whose name I cannot recall.
I remember being amused when Chanda, on a tour of Triton (son of Neptune) during its construction, remarked that the corridors designed by Bawa were wider than they needed to be. Chanda was as unimaginative as I was when confronted with Bawa’s brilliance (and apparent extravagance). The Triton turned out to be an architectural tour de force. It was a truly beautiful bit of work, and I was very proud of it. One of its beautiful features was the view of the pool and the sea that you saw, as one sheet of water, when you stepped down from your car in the porch.
None of us dared to question Bawa when it came to matters of design. He was a genius and we all knew it. However, I had occasion to question one of his concepts. One day Michael Mack (who was in charge of Hotels and Tourism) came to me and told me that Geoffrey was going to construct a bronze statue of Triton on the edge of the large swimming pool. It was to be a centaur, half horse, half man. I knew that Triton was not half horse but half fish. I told him to tell that to Geoffrey. He came back to me and told me that Geoffrey had said that according to his encyclopedia it was half horse.
I was not prepared to look foolish for all posterity, and told him to bring me the encyclopedia. That was the last I heard about the centaur, but Goeffrey’s brilliance can be gauged by what he replaced it with. He placed a genuine padda boat on the edge of the pool, and how appropriate it was! The bar alongside the pool was given the same padda boat theme.
While I was very proud of both Neptune and Triton, I did not have the usual ‘Soft Opening’ for either. The reason was simple. We could have only a limited number of invitees, and for every person I invited I would probably make ten enemies – those who were not invited. What I did was to invite those whom I wanted to invite, for weekends with their children included. I think that made us more friends and fewer enemies.
On one occasion Andrew Joseph who was with the UN suggested that I should invite the Secretary-General, Dr Kurt Waldheim, down to Neptune. I did so, and it was a tremendous success. Waldheim was a charming man and so was his wife. Susheela was her serene, composed self and would have made a great impression on Kurt. Andrew was totally delighted with the arrangements. His own standing with Kurt would no doubt have had a boost, though he was such an accomplished person that he did not need it. Susheela and I had a great regard for him, and visited him in different parts of the world, such as Djakarta and New York, while he went steadily up the UN tree. He was one of the most versatile men I have known with a great sense of humour that could set a party alight (as he did on one occasion at our home)
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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