Features
The # 1 Sri Lankan Hotel Company in 2023
CONFESSIONS OF A GLOBAL GYPSY
Dr. Chandana (Chandi) Jayawardena DPhil
President – Chandi J. Associates Inc. Consulting, Canada
Founder & Administrator – Global Hospitality Forum
chandij@sympatico.ca
Acknowledgement
I thank Mr. Gemunu Goonewardena, Chairman of the Tourist Hotels Classification Committee from 2018 to 2022, and Non-Executive Director of the Board of Aitken Spence Hotel Holding PLC, for his assistance to me in collecting current data.
Hotels Rooms in Sri Lanka in 2023
All types of accommodation are available in Sri Lanka for tourism, including hotels classified by the Sri Lanka Tourism Development Authority (SLTDA), unclassified accommodation, bungalows etc. The total capacity is now over 48,000 rooms in 3,657 units. This is including the upcoming 2023 opening of the largest hotel in Sri Lanka – the 800-room Cinnamon Life Colombo. With that, the total number of classified hotels (one to five star) rooms in Sri Lanka will soon reach 15,642 in 160 hotels.
In 2023, five hotel companies operated over half of the room stock in Sri Lanka, which are within their 56 (generally, larger) hotels as indicated in the table below. The other half of the rooms are within the balance 104 (generally, smaller) hotels. A small number of rooms in bungalows managed by a few of these companies were not considered for this calculation.
All three top Sri Lankan hotel companies – Cinnamon, Heritance and Jetwing entered the hotel industry around the same period, 50 years ago. With the opening of Life in 2023, in terms of total room capacity, the Cinnamon brand of John Keells Group will surpass Heritance and associated brands (including 500-room RIU partnership) of Aitken Spence Group.
With a successful operation of 10 hotels in three other countries (The Maldives, India and Oman) Aitken Spence Group will continue to compete aggressively in terms of the total number of hotels and rooms operated by a Sri Lankan company. Their main achievements include opening the first five-star resort hotel in Sri Lanka in 1982 – Triton and a decade later opening multi-award-winning, iconic hotel – Kandalama. The company with the largest number of hotels in Sri Lanka – Jetwing operates a chain of 20 hotels with different and interesting themes. The rest of this article focuses on the # 1 Sri Lankan Hotel company — Cinnamon.
Cinnamon Hotel Brand in 2023
Over the last five decades, John Keells Group operated their hotel management company under different names. In 1970s as Walkers Tours Hotels, in 1980s as Hotel Management & Marketing Services Limited, and in 1990s as John Keells Hotels. In the year 2005, they rebranded their hotel chain as Cinnamon. In 2023, Cinnamon is the largest hotel company in Sri Lanka. They also have four hotels in the Maldives.
With the opening of their 16th hotel – Cinnamon Life, the hotel company will have a room stock of 3,288 in Sri Lanka and The Maldives. Both in terms of the quality of the hotels and the quantity of the room stock, Cinnamon is arguably the greatest hotel company in Sri Lanka, today.
Cinnamon Hotel’s most ambitious project – Cinnamon Life Colombo is the first integrated resort in Sri Lanka and the largest private investment in the country. Sri Lankan-British architect, Cecil Balmond designed the resort while Hyundai Engineering & Construction is the main contractor. The construction of the resort began nine years ago. This 47-floor complex, includes 800 five-star hotel rooms, a retail and entertainment complex, large conference venues, a 30-storey office tower and two separate residential towers with 427 luxury apartments. Cinnamon Life Complex promises vibrant, innovative, futuristic and unique elements. It is expected to be an icon that will redefine Colombo’s skyline.
My Connections with Walkers Tours/John Keells from 1973 to 1993
By early 1970s, Walkers Tours & Travels Limited (later rebranded Walkers Tours) became the leading tour operator in Ceylon. It was founded in 1969. Soon, they represented two of the largest European tour operators, from West Germany and Denmark, who were actively promoting tourism in Sri Lanka.
A young lawyer, Sriyantha (Simon) Senaratne was appointed as the Managing Director of Walkers Tours in 1971. When Walkers Tours was acquired by John Keells Group of companies in 1972, he continued in that position for seven more years. As a part of the vision of the Managing Director, Walkers Tours entered the hotel industry in 1973 with a unique project in a remote area — Habarana, and soon became the leader in hotel management in Sri Lanka.
Prior to my departure from Sri Lanka to pursue my global career in early 1994, for the first two decades of this iconic hotel company, I was connected with them in various capacities. My direct and indirect roles with them included serving tourist groups and representatives of Walkers Tours as a waiter, barman, cook, trainee chef, executive chef, food & beverage manager, hotel manager, operations manager of the corporate office of the hotel company, and finally as the general manager of their two largest hotels in the 1980s. In later years, while working for other companies in Sri Lanka such as Le Galadari Meridien and Mount Lavinia Hotel, my teams depended largely on tourist traffic from Walkers Tours.
I am most thankful to Walkers Tours/John Keells Group for giving me valuable opportunities. They allowed me to experience at a young age, various senior operational positions and leadership tasks during the early years of my career in the hotel industry. My direct and indirect connections with this largest group of companies in Sri Lanka over a period of 20 years, can be summarized as:
1973 – Bentota Beach Hotel
First, I was associated with operational people and tour guides attached to Walkers Tours in 1973 while working as a trainee waiter, barman and cook on one of my Ceylon Hotel School (CHS) internships. It was at what was then the best resort hotel in Sri Lanka – Bentota Beach Hotel. Soon after my graduation from CHS in 1974 I was recruited by Bentota Beach as the Trainee Executive Chef. In that role for a year, I associated with more Walkers Tours groups and Resident Managers and Tour Managers.
Bentota Beach was a popular meeting place for many young hoteliers from over a dozen of new hotels in Bentota and Beruwala. In 1975 at a hotelier’s party, I met Jayantha Silva who had been recruited to manage the first hotel to be operated by Walkers Tours – Hotel Swanee.
1975 – Coral Gardens Hotel
After a year, I was transferred with the promotion of Executive Chef (and Assistant Manager) of the sister hotel of Bentota Beach Hotel – Coral Gardens. There, I took my relationships with Walkers tour leaders to a new level. On most days, we catered for an additional 150 to 200 tourists who visited Coral Gardens Hotel only for lunch during their island-wide round trip with Walkers Tours. In consultation with the tour leaders, I planned standard, three-course lunch menus that could be prepared and served quickly, after their glass-bottom boat excursions to see beautiful coral gardens, Hikkaduwa was famous for.
I met an innovative and ambitious, young hotelier — Bobby Adams for the first time in 1975, two weeks prior to his departure from Coral Gardens, when I succeeded him. Bobby who was the Assistant Manager of Coral Gardens Hotel was joining Walkers Tours to open The Village, Habarana – the first hotel to be built by Walkers Tours. Just before Bobby opened The Village in 1976 as its Manager, Bobby called me from Habarana, “Chandi, why don’t you join me as the Executive Chef at The Village?” he asked. However, at that point, I did not accept his offer. A few years later, I worked for Bobby twice. When I married in 1980, he was my best-man. When I was 27, I became his deputy at John Keells. Bobby was the first Director – Operations for hotels at their corporate office.
1977 – One Week Tour with Walkers Tours
In the summer of 1977, Walkers Tours decided to organize a one-week-long coach tour around Sri Lanka for representatives from all hotels in Sri Lanka providing rooms to their clients. As the Assistant Manager and Executive Chef, I represented Coral Gardens Hotel in this tour. It turned out to be a fun-filled, thank you tour. It was a great, public relations initiative by Walkers Tours with their hotel industry partners.
Most members of the top team of Walkers Tours joined this trip. They included Sri Lankan travel trade legends such as Norman Impett and Nevil Arnolda. They were both Directors of Walkers Tours. I also got to be better acquainted with prominent, younger members of Walkers Tours family, such as Bobby Jordan and Jansi Ponniah, who joined the trip. They both were very friendly, efficient, dynamic and well-connected with the hotel industry.
The highlight of the tour was spending a couple of days at their then flagship hotel – The Village, Habarana. By then, Walkers Tours had a number of hotel management agreements, was managing Hotel Swanee, and was taking over the management of Hotel Ceysands. They were in the early stages of planning a hotel in Kandy which was called Kandy Walkinn (which years later opened as Hotel Citadel). My friend Bobby Adams was very happy to see me again. Both of us sat at the ‘Don Martin’s bar at The Village and had a long chat over a couple of drinks. Bobby was very convincing. “Chandi, you must join Walkers Tours, now!” he insisted.
1977 – Hotel Ceysands
The day after the one-week coach tour with Walkers Tours, Captain D. A Wickramasinghe (Captain Wicks, who later became my father-in-law), the new General Manager of Hotel Ceysands called and met with me. He explained that Walkers Tours had taken over the Hotel Ceysands management from the owners — Ceylinco Group. After a pause, Captain Wicks said, “Chandana, we are expecting 100% occupancy from the first of November, 1977 for six months. We need a good professional like you to join us at least by the first of October, to organize the kitchen, restaurant and bars within a month.”
Soon after that, I joined Walkers Tours as the Food & Beverage Manager and Executive Chef of Hotel Ceysands. At that time, I met Walkers Tours Managing Director – Sriyantha (Simon) Senaratna, and the Finance Director – Priya Edirisinghe, who handled the hotel expansion projects.
1979 – Swanee
Hotel Swanee wasn’t a well-planned, developed hotel. However, when Walkers Tours took over the hotel in 1975, they wisely invested in major upgrades for the hotel. They hired respected professionals such as Bevis Bawa, to upgrade and maintain the landscaping.
As the first hotel to be managed by Walkers Tours/John Keells, it was also an important learning journey for the group. In 1979 at the age of 25, I was proud to be promoted to be the Manager of Hotel Swanee. John Keells Group Chairman, Mark Bostock was very fond of me and arranged my first overseas training in his country (England) with Trust House Forte.
1980 – An Offer from a new Rival Company
I was surprised when Somaratne Silva invited me to his house in Colombo to discuss the Manger job offer for me to open Sigiriya Village, which was expected to be the main competitor for The Village Habarana. He was such an interesting man.
He talked about his training in the Netherlands, his work experience in hotels there, his recommending Bobby Adams for The Village and his positive observations about my work at Hotel Ceysands and Hotel Swanee. I nearly accepted that job, but eventually decided to continue with John Keells.
1980 – Ambalangoda Rest House
By 1980, Walkers Tours/John Keells was expanding its hospitality business by acquiring some smaller properties with management contracts. The group opened their second hotel in Beruwala — Hotel Bayroo, on a management contract, in the midst of various obstacles created by the village thugs. In addition to managing Hotel Swanee, I was asked to take over the Ambalangoda Rest House, to reorganize and improve its standards and to manage it.
1981 – Hotel Management & Marketing Services Limited
At the beginning of 1981, I was promoted again and was transferred to the John Keells corporate office in Colombo. I was the second in command of Walkers Tours/John Keells’ hotel company — Hotel Management & Marketing Services Limited (HMMS), as the deputy to Bobby Adams.
1981 – Temple Trees
Mainly owing to a personal relationship Bobby Adams had with then Prime Minister, R. Premadasa, the group commenced managing the Prime Minister’s official residence — Temple Trees. I released one of the departmental managers from Hotel Swanee — Fazal Izzadeen to become the Manager of Temple Trees.
1981 – Ceylinco Hotel
In Colombo, we had negotiated to take over the management of Ceylinco Hotel. “Chandi, I would like you to take over the management of Ceylinco Hotel and re-organize it”, Bobby informed me. He knew that I had a personal friendship with the Ceylinco Group Chairman, Lalith Kotalawala, which was useful in taking over Ceylinco Hotel.
1981 – Representing Walkers Tours as the Group Executive Chef in Hong Kong
In the midst of my busy schedule with HMMS, Bobby Adams entrusted me, on short notice, with a special assignment in Hong Kong. He wanted me to quickly plan and organize a large Sri Lankan and Maldivian food festival at the Hotel Furama InterContinental, Hong Kong. It was an important, two-week tourism promotional festival, in partnership with a number of organizations. They were represented by well-known leaders of the tourist industry, such as M. Y. M. Thahir of Walkers Tours, Pani Seneviratne of Ceylon Tourist Board, and Ahamed Didi of Universal Resorts, The Maldives.
1985 – The Village & The Lodge
Soon after my return from England in 1985, upon completing my graduate studies in International Hotel Management, I re-joined John Keells Group. I was appointed as the General Manager of their largest two hotels – The Village and The Lodge. I reported to Bobby Adams, and also worked closely on rates and financial aspects with Vivendra Lintotawela, who later became the Chairman of John Keells Holdings. On a day when all 260 rooms in both hotels were occupied, my management team in Habarana led providing hospitality and meals to 1,000 people — 520 guests, 120 tourist drivers and 360 employees.
In The Village, Somaratna Silva had cleverly created a rustic resort with an open concept with individual rooms appearing like small houses in a remote village. In The Lodge, two young Architects — Pheroze Choksy and Ismeth Rahim — continued the open concept, but with more sophistication. The end result was simply a masterpiece of architecture in two sister hotels, blending beautifully with nature, and the seamless delivery of world class hospitality.
John Keells/Walkers Tours, had created two iconic resorts, which were simply a delight for any hotelier to operate. I was fortunate to get that opportunity.
1985 – Habarana Farm
In addition to managing the two resorts in Habarana, I managed a large farm with the assistance of a qualified farm manager who reported to me. The farm cultivated vegetables and fruits to supply both resorts and used kitchen food waste to feed around 35 pigs raised on the farm.
1986 – Keels Food Product Distribution Operation
One day the Managing Director of Walkers Tours, Ken Balendra (later, the first Sri Lankan to be appointed as the Chairman of John Keells Holdings) called me and asked, “Chandana, don’t you have unused cold room facilities at The Lodge?” When I confirmed that we did, he assigned me some additional duties. “Look Chandana, we are commencing a new company – Keells Food Products, initially with mainly meat products. Our vision is to eventually make it the largest such company in Sri Lanka. We would like you to set up the food distribution network for Keells Food Products in the North Central Province.” I immediately hired a Food Distribution Coordinator, bought a large refrigerated van and commenced food distribution.
1986-1989 and 1990-1993
During my three years as the Director of Food & Beverage of the 500-room five-star Le Galadari Meridien Hotel in Colombo from 1986 to 1989, I realized the influence Walkers Tours had with most of the hotels in Sri Lanka. My colleague, Chandra Mohotti, the Director of Room Division of the hotel treated anyone from Walkers Tours as royalty, as their group business was valuable.
During my three years as the General Manager of Mount Lavinia Hotel from 1990 to 1993 we depended heavily on group bookings from Walkers Tours. I enjoyed working with them very closely, especially during the tour group contract negotiations held in Berlin, Milan and London during major travel trade events (ITB, BIT and WTM). After work we all socialized until the early hours in the morning. Those were memorable days.
I left Sri Lanka permanently in early 1994 to focus on my global career. Therefore, I had no direct connections with Walkers Tours/John Keells for nearly 30 years. However, during those three decades, when I visited Sri Lanka over 35 times as a tourist, as a guest of a few of their hotels, I continued to be impressed with the visionary developments, ambitious takeovers, innovative expansions and creative re-branding of the hotel business of Walkers Tours/John Keells.
Many board members and professional hoteliers have contributed to this remarkable journey, having many unprecedented successes. In spite of various macro level challenges such as the 26-year civil war from 1983 to 2009, Walkers Tours/John Keells hotels managed to survive and progress.
How Did Everything Start in 1973?
At the end of the day, it is still important to understand the humble beginnings of this hotel company and appreciate the pioneers who commenced that amazing journey… Continuing next week, with a question-and-answer format with the visionary leader who steered Walkers Tours to enter the hotel industry 50 years ago.
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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