Features
Challenges in meeting President’s target
Development of renewable energy projects II –
By Dr Janaka Ratnasiri
The comments made by the President at the meeting he had on 15.12.2020 to discuss the development of renewable energy (RE) projects were highlighted in recent media reports, as described in the writer’s earlier write-up which appeared in The Island of 28.12.2020 under the same heading. However, there was no reference in these reports to any feedback that would have been made by officials present. The purpose of this write-up is to discuss likely issues that would have been of concern to institution officials and the challenges they may have to face in meeting the President’s target.
FEARS OF DESTABILIZING THE SYSTEM
The first challenge is to change the mindset of professionals concerned. Energy experts both within the Ceylon Electricity Board (CEB) and outside have been saying for years that connecting too many of RE plants such as wind and solar power systems to the grid will cause its destabilization, not being able to maintain the voltage and the frequency within permitted limits. The output of these RE supplies keep fluctuating momentarily, hourly and diurnally and the problem is how to balance the supply and load under such dynamic conditions. It was also said that excess harmonics generated during conversion of direct current (DC) output from solar systems or from DC wind turbines into alternating current (AC) for feeding into the grid could degrade the quality of the supply.
According to a website on RE systems, “Impacts caused by high penetration levels of intermittent renewable distributed generation can be complex and severe and may include voltage increase, voltage fluctuation, interaction with voltage regulation and control equipment, reverse power flows, temporary overvoltage, power quality and protection concerns, and current and voltage unbalance, among others. The uncertainty and intermittency of wind and solar generation are major complications that must be addressed before the full potential of these renewables can be reached”. These challenges require advanced control strategies to solve the problems effectively.
PROBLEMS ASSOCIATED WITH RENEWABLE ENERGY SYSTEMS
One problem associated with RE systems is that they are not considered dispatchable, which means that their output is not available as and when necessary, unlike in the case of thermal power plants. Wind power output is available only when wind blows which keeps changing in a stochastic manner hourly, diurnally and seasonally. In Sri Lanka, wind is generally strong during the second half of the year than in the first half. In the case of solar panels, their output is available only during the daytime peaking at noon and declining with the increasing solar angle. Even during daytime, the output would drop if there is cloud cover or rainfall. If there is extended periods of bad weather, a consumer has to depend on some back-up power.
According to the CEB Chairman’s Review given in its 2018 Annual Report, “a study on Integration of Renewable Based Generation into Sri Lankan Grid 2020-2030 was conducted during the year (2018) with the objective of investigating the main challenges faced in renewable energy-based generation and determining the optimum level of renewable energy generation”. However, there is no report of this study available in the CEB’s website.
STORAGE SYSTEMS FOR RENEWABLE ENERGY PLANTS
In order to make use of solar energy that is generated during the day, at night time, it is necessary to store the electricity by suitable means. This also applies to wind energy to even out the fluctuating output into a steady output. If the system is connected to the grid, energy generated by solar systems during the day or by wind systems when the wind blows can be fed into the grid and the grid provides the electricity to the consumer during night time or when there is no wind blowing. Hence, there is no need for a separate storage facility with grid-connected systems.
For large scale solar systems, one method of storage is to make use of exiting hydro power reservoirs by saving the water which would have been used for generating an equivalent amount of energy generated by solar panels during the day, and using the water saved during night time. This does not require any additional expenditure on building extra facilities. Another is to build pump-storage facilities comprising two sets of reservoirs at two elevations connected via a penstock with a generator/pump system at the bottom. Already one such system is being planned at Aranayaka.
Any surplus energy generated during the day from solar panels or when wind blows is made use of to pump water from the lower reservoir to the upper reservoir. At night time or when there is no wind, the pumped water is allowed to flow down the penstock driving the pump in the reverse mode to generate electricity. In the West, such pump-storage systems have been used for many decades for peaking purposes. One good example is the system installed at the Niagara Falls.
HYDROGEN SYSTEMS FOR STORAGE
Another method available is to feed the solar panel output to a set of electrolyzers, which are available commercially today, to generate hydrogen by splitting water. Hydrogen generated is stored and fed to a bank of fuel-cells to generate electricity in the form of direct current (DC) and later inverted to AC. After filtering out harmonics, this steady output is fed to the grid as and when necessary, day or night, using the stored hydrogen which makes it dispatchable. Each solar or wind or hybrid energy park that is being planned could be supplemented by such hydrogen storage system accompanied by a bank of fuel cells, enabling the output from these RE parks dispatchable.
There is much interest among developed countries to develop hydrogen energy systems. European Union has set out plans which could require up to € 470 billion (USD 570 billion) of investment in green hydrogen by 2050. Germany alone is targeting 5,000 MW of electrolysis capacity by 2030. Japan, a front-runner along with South Korea, is looking to sharply increase a target to import 300,000 tonnes a year of hydrogen in 2030. U.S. President Joe Biden wants to fund research into technology, including large-scale electrolyzers, to help make green hydrogen costs match conventional hydrogen within a decade. (https://energy.economictimes.indiatimes.com/news/renewable/explainer-why-green-hydrogen-is-finally-getting-its-day-in-the-sun/79672523).
PROPOSAL FOR ROOF-TOP SOLAR INSTALLATIONS
The 2021 Budget Speech states that a capacity of 500 MW will be added to the grid, by providing solar panels each generating 5 kW, to 100,000 houses of low-income families. At the meeting the President had on 15.12.2020 with the two Ministers and Ministry officials, he has said that the Government would bear the cost of LKR. 800,000 per house for installing solar cell panels under this project. This means the expenditure on this project will be about LKR 80 billion. The question arises who will be responsible for implementing this project? The SLSEA Act grants powers to it for “entertainment of applications for carrying on of on-grid and off-grid renewable energy projects”. It also has powers for “the development of guidelines on renewable energy projects and disseminating them among prospective investors”. Hence, the SLSEA may be assigned the task of coordinating the project.
The purchase of 100,000 roof-top panels and getting them installed is a challenge by itself. There is a large number of local companies, numbering about 200, involved in supplying and installing roof-top solar panels. The government should call for expressions of interest (EOI) from these companies to undertake this assignment requesting information on their track record and proof of their ability and competency. Next, bids need to be invited from selected companies after announcing detailed specifications for the panels.
It is important to specify in the bid document itself the limiting values for key parameters with tolerances that need to be met by the panel offered, without just saying that panels offered should conform to international standards, as normally done by the CEB. The evaluation of the bids would be much simpler and faster then. It is best if the supply is distributed among as many vendors as possible, after agreeing on a fixed price, to expedite the implementation of the project and avoid complaints from unsuccessful bidders.
POOR PLANNING FOR RENEWABLE ENERGY PROJECTS
Though the Cabinet of Ministers since 2016 has been taking decisions to introduce RE projects including solar power systems at both domestic level and utility scale, their follow up by the two implementing agencies, viz. SLSEA and the CEB has been rather slow, possibly due to divided responsibility. According to the SLSEA Act, any RE project needs the approval of the SLSEA before commencing any work.
The Electricity Act also requires accepting projects selected only after calling for tenders except those recommended by the SLSEA. The misinterpretation of the Electricity has resulted in projects recommended by the SLSEA getting held up by the CEB for extended periods. The CEB’s draft LTGE Plan for 2020-39 prepared in May 2019, plans to add only 165 MW of mini-hydro systems, 555 MW of wind systems, 880 MW of solar systems and 55 MW of biomass systems up to 2030. Even the SLSEA has failed to come out with a plan to develop RE systems in an optimal manner as highlighted in the Writer’s article in the Island of 28.12.2020.
This is despite the fact that the previous Cabinet decisions had wanted about 2,000 MW of solar power added within a shorter time frame, comprising 1000 MW of roof-top systems and 1000 MW of utility systems. As mentioned in the previous article, even the SLSEA has failed to come up with a plan to develop RE systems though it is a requirement given in its Act. So, another challenge is to get the CEB and SLSEA to enhance their plans for RE generation and fall in line with the Government policy. If they do not comply, the solution is not closing down of the PUCSL as highlighted in writer’s article in The Island of 25.12.2020. (See https://island.lk/cabinet-discussion-on-public-utilities-commission/)
INCOMPATIBILITY OF NEW COAL POWER PLANTS WITH INCREASED RE SHARE
One problem possibly encountered in increasing the RE share is the incorporation of several new coal power plants in the system by 2030. This increases the share of fossil fuel share leaving only a small fraction to be filled by RE systems. For example, the draft Plan for 2020-39 shows the demand in 2030 as 31,740 GWh, out of which 20,640 GWh (65%) will be from fossil fuels and 11,100 GWh (35%) from RE sources. Out of the 20,640 GWh expected from fossil fuel plants, 7,721 GWh (24%) will be from the two new coal power plants to be built at Norochcholai (600 MW) and Trincomalee (300 MW). Another 4,781 GWh (15%) will be from the existing coal power plant at Norochcholai.
This means by 2030, 12,502 GWh (39%) of the demand will be met from coal while another 8,140 GWh (26%) will be from oil or jointly 20,640 GWh (65%) from fossil fuels. If 70% of total demand is to be met from renewables, then only 30% could be generated from fossil fuels. This means that the RE contribution has to be 48,160 GWh if the fossil fuel contribution is to be maintained at 20,640 GWh, making the total supply to be 68,800 GWh, which is more than double the forecasted demand in 2030. In order to make achieving of 70% share from RE sources feasible, it is therefore imperative to limit the fossil fuel contribution to 9,520 GWh in order to maintain the total supply at 31,740 GWh.
The easiest way to achieve this target is to stop building the two new coal power plants at Norochcholai and at Trincomalee, and retire the 20-year-old existing coal plant at Norochcholai. Hence, building new coal power plants is not compatible with President’s target on RE share of 70% in electricity generation. The President should therefore give a clear directive to CEB to discontinue planning of new coal power plants disregarding what its Unions say.
It is reported in the media that a former Army Officer has been appointed as Vice-Chairman of CEB to help CEB “to achieve President Gotabaya Rajapaksa’s of goal promoting renewable energy and providing electricity at a minimal cost” (Island of 22.12.2020). Perhaps the new Vice-Chairman will keep those within CEB who oppose President’s move at bay, including the trade unions.
IMPROVING RESEARCH CAPABILITY OF CEB
According to the CEB Act of 1969, CEB has powers to conduct research into matters affecting the generation, distribution, transmission, supply and use of electricity (Article 12h). However, CEB’s Annual Reports do not refer to any research being done within the CEB. Students in the Physical Science stream having the highest scores at GCE (A level) examination get admitted to engineering courses and those who follow electrical engineering ending up in institutions like CEB.
It is a pity that the CEB management does not make use of this talented graduates to undertake research to seek solutions to such problems such as integrating RE systems into the grid, develop new storage systems and to provide other research and development support for RE systems. In 2019, the CEB has spent about LKR 97 Billion on importing fuel for thermal power plants (SD 2019).
With the introduction of large scale RE systems, part of this expenditure could be saved which could be utilized to set up a Research and Development (R&D) Division in CEB as provided for in its Act.
Perhaps, a senior academic with research experience in RE systems could be invited to set up the R&D Division and provide him with a team of young engineers comprising both electrical and ICT engineers with aptitude for research to undertake studies on how to make the grid smart as described above.
THE WAY FORWARD
If the full potential of the country’s RE resources is exploited, it will be possible to achieve the entire electricity generation from RE sources. It will also save hundreds of Billions of Rupees annually on importing fuel required for operating thermal power plants. However, there are many problems to surmount before this could be achieved. Among these are the following:
a. Change the mindset of senior officials controlling the power sector that changing from fossil fuels to RE sources to meet the base load requirements is technically feasible.
b. Discontinue building new coal power plants and retire the existing coal power plant by 2030 as their presence will exceed the 30% share from fossil fuels.
c. Introduce mechanisms for energy storage at utility scale through utilizing existing hydro power reservoirs or building pump-storage systems or adding large batteries or adding electrolyzer-fuel cell systems which are commercially available now.
d. Set up a R&D Division within CEB to seek solutions for problems associated with integration of utility scale RE systems into the grid.
e. Entertain investors directly for RE projects on build, own, operate and transfer (BOOT) basis by providing efficient, clear and transparent mechanism for accepting proposals and guaranteeing security of their investments.
f. Publish a set of guidelines prepared jointly by SLSEA, CEB and PUCSL for accepting and approving candidate RE projects proposed by investors on BOOT basis.
CONCLUSION
It is important for decision makers to take a wholistic view of the power sector in the country and take evidence-based decisions rather than taking a piecemeal approach. It is not possible to build more coal power plants on one hand and fix targets for increased RE share on the other. While the President wants more renewable energy projects, the Ministry and CEB want more coal power plants. The President should decide on his priorities. If his priority is to have more renewable energy share by 2030, then he should get CEB to give up building more coal power plants. He cannot have both. It is his biggest challenge.
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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