Features
Development of renewable energy projects: President’s concerns
BY Dr Janaka Ratnasiri
Proceedings of a meeting held by the President on 15.12.2020 with the Power Minister, Renewable Energy Minister, officials of the two ministries as well as officials of institutions coming under the two ministries to discuss issues pertaining to the development of renewable energy (RE) were shown in newscasts of TV channels as well as reported in the print media recently. The purpose of this write-up is to elaborate on some issues raised by him.
PRESIDENT’S CONCERNS
According to a report in The Island of 16.12.2020, the President has said that “he is exploring the possibility of rapidly adding power from renewable energy sources, such as wind and solar, to the national grid, and that many countries are turning to renewable energy sources for power generation. As per the “Saubhagyaye Dekma” Policy Statement, by 2030 the government expects to meet 70% of the total electricity demand from renewable energy sources”. He has further said that “the generation of renewable energy should be carried out expeditiously in a systematic manner with short-term as well as long-term objectives”. He was also heard saying that officials should be sincere and honest in this exercise.
REALIZING THE PRESIDENT’S TARGET
It may be recalled that the President first announced his target of achieving 70% of energy consumed for generation of electricity from renewable sources by 2030 at a meeting he had with the same audience on September 14th, more than three months ago. This was given in a press release issued by the President’s Media Division on the same day. See the website http://www.pmdnews.lk/70-of-electricity-demand-will-be-generated-using-renewable-energy-by-2030/.
In this press release, the President has emphasized that institutes with the authority to approve Development Projects should have feasibility reports stand by and the approval process should be expedited and that the Government has made the promotion of renewable energy a top priority. The President advised the Secretary to the President to issue a gazette calling for all the institutes to assist in this endeavour. But it appears that the President’s instructions have not been carried out.
The President would have convened the meeting on the 15th, probably because there has been no follow up on his announcement initiated during the last three months. Though he said once at a public meeting where officials were present, to take his word as a circular, things do not happen that way in the system. To give effect to the President’s target, the Secretary to the Ministry of Power, being the Cabinet Ministry, has to prepare a Cabinet paper seeking approval of the Cabinet for amending the Cabinet approved Guidelines for Electricity Industry by changing the target given in it from 50% to 70% as decided by the President.
This amended Guidelines document has to be presented to the Cabinet by the Minister and once approved, it has to be communicated to the Public Utilities Commission of Sri Lanka (PUCSL), who will in turn direct the Ceylon Electricity Board (CEB) to prepare its Generation Plan to conform with the amended Guidelines. The writer’s understanding is that this process has not happened to date, for which the Secretary to the Ministry of Power should take the responsibility. Incidentally, the PUCSL was a notable absentee at the President’s meeting.
After the President made this announcement in September, the writer published an article in The Island of 02.11.2020 under the heading “Will CEB make an effort to comply?” referring to the President’s target. In this article he wrote “Being a matter concerning RE share in power generation, the relevant Cabinet paper will have to be presented to the Cabinet by the Power Minister. The general practice is for the Secretary to the Ministry to draft the paper in concurrence with the Minister. The question is how long the Power Ministry will take to attend to this” (https://island.lk/will-ceb-make-an-effort-to-comply/).
It appears that the Secretary to the Ministry of Power has failed to take any action towards incorporating the President’s target into the Guidelines to the Electricity Industry during the last three months which is a pre-requisite for adding RE systems into the grid. Hence the first thing the President should do to see that “generation of renewable energy should be carried out expeditiously” is to have a more efficient and dynamic person as Secretary who can take decisions independently. If he had a Secretary like that, the PUCSL by now would have directed the CEB to revise its Generation Plan to conform to President’s target.
RENEWABLE ENERGY SHARE IN THE POWER SECTOR
The CEB’s Statistical Digest for 2019 reports the total electricity generation in 2019 as 15,922 GWh, of which major hydro had contributed 3,784 GWh (23.8%), coal, 5,361 (33.7%), petroleum oil, 5,061 GWh (31.5%), Mini hydro, 1,011 GWh (6.3%) and other RE sources including wind and solar adding to 750 GWh (4.7%). This gives the RE share in the power sector as 35% in 2019. The challenge is to raise this share to 70% by 2030. According to the CEB’s draft Generation Plan for 2020-39, to meet the demand in 2030, approximately 31,700 GWh of electrical energy need to be generated. This means 70% of this amount or 22,000 GWh of electricity will have to be generated from RE sources in 2030. With the 2018 RE generation standing approximately at 5,545 GWh, this has to be quadrupled by 2030 by adding 16,400 GWh units of RE. However, this is subject to output from the major hydropower plants which varies with the rainfall. For example, in 2018, this share was 45% with the major hydro contribution of 5149 GWh and the shortfall was about 15,000 GWh.
The total committed solar power systems as announced by the government from time to time amounts to about 1,400 MW and assuming a plant factor of 20% based on the performance of existing systems, they could generate about 2,400 GWh of energy a year. Similarly, the committed wind power systems will add up to 650 MW yielding about 2,000 GWh of energy assuming a plant factor of 35%. Dendro and waste to energy projects could add another 1,300 GWh of energy. This makes a total of 5,700 GWh of RE energy to be generated within a few years’ time beyond the existing plants. This means there will be a shortfall of about 10,000 GWh of RE energy for generating 16,400 GWh by 2030 to meet the President’s target.
One problem here is that the quantities of RE generation from such sources as hydro, wind and solar have hourly, daily, seasonal and annual variations. In particular, the hydro power contribution, both from major and mini, could vary widely depending on whether the year is a dry year or a wet year. If the 70% target is achieved in a wet year, it does not mean the target is achieved in a subsequent dry year. Hence, it is necessary to have a surplus of energy from other sources such as wind and solar to accommodate any drop in the hydro contribution due to adverse weather conditions. This could issue could become prominent in the future under climate change.
CEB’S RESPONSE FOR RENEWABLE ENERGY PROPOSALS
A previous regime launched in 2017 a programme named “Soorya Bala Sangramaya” (SBS) to be implemented in four phases, with a view to accelerate the utilization of solar power in the country. Under Phase I, it aimed to generate 1 GW from one million solar rooftops, each with capacity of 1 kW. Phase II of the programme relates to building 150 solar power plants each with capacity 1 MW to be built by the private sector on build, own and operate (BOO) basis in two stages of 60 and 90 plants each of 1 MW capacity. The entire cost including land acquisition and extension of the grid as well as getting clearances has to be met by the investor and tenders were called in 2017/18. However, there is no information as to how many of these projects were accepted and commenced.
In 2020, another tender was floated inviting investors to build solar power plants with capacities in the range 3-10 MW amounting to a total of 150 MW at specified locations where gid substations are available, under Phase III of SBS programme. Though in 2017 the Cabinet approved building an aggregate of 1,000 MW of large solar power plants under Phase IV of the SBS programme, comprising 800 MW solar park at Pooneryn, 100 MW solar park at Siyambalanduwa, 100 MW solar system on Maduru Oya Reservoir, no firm action has been initiated by the CEB to proceed with these proposals during the last three years. The lack of enthusiasm to develop RE projects is understandable as the fuel, that is, solar radiation and wind, are available freely for RE projects unlike for thermal power plants for which the CEB has spent in 2019 a sum of LKR 50 Billion for oil and LKR 46 Billion for coal (CEB’s SD 2019).
The CEB publishes once in two or three years a Long-Term Generation Expansion (LTGE) Plan incorporating the capacities that need to be added annually for the 20-year period to the future to meet the future demand for electricity and specifying the type of corresponding generation units including their fuels that would generate electricity at least cost. The RE capacities to be added up to 2030 as included in the CEB Plan are 165 MW of mini-hydro systems, 555 MW of wind systems, 880 MW of solar systems and 55 MW of biomass systems. These are far below the capacities already approved by the Cabinet from time to time for installation in the short term which means that the CEB’s Plan does not fall in line with the government requirements. The CEB is not even responding to requests made by PUCSL to revise its Generation Plan to conform with the Cabinet approved present Guidelines which says that minimum of 50% of electricity has to be met from RE sources. Obviously, this calls for a change in management of the CEB.
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Sri Lanka commenced its RE programme in early seventies, about 50 years ago, when it established an integrated RE village at Pattiyapola in the Hambantota District with the assistance from UNDP. Its objective was to provide energy requirements of the village from RE sources including wind, solar and biogas generated from cow-dung amply available in the village. However, with the extension of the grid to the village a few years later, the project was abandoned.
The availability of international funding for the development of solar-home systems and the large number of sites suitable for setting up of mini-hydro systems associated with waterways in the Central, Sabaragamuwa and Uva Provinces, prompted the expansion of the RE systems in the country in an ad-hoc manner.
In order to regulate and promote the RE industry, the Sri Lanka Sustainable Energy Authority Act, No. 35 was passed in 2007. Though the Board of the Authority comprises 21 members, mostly Secretaries to various Ministries, surprisingly there is no representation of the CEB in its Board. Under the following Articles in the Act, the SLSEA is required to prepare a comprehensive RE Development Plan and have it gazetted after receiving comments from the public and stakeholders.
7. (1) The Director-General shall within six months of the appointed date, cause a survey and a resource assessment to be commenced of all renewable energy resources in the country and prepare a renewable energy resources inventory and a renewable energy resource map in respect of each Development Area.
8. (1) The Director-General shall not later than three years after the appointed date, submit to the Board a comprehensive Renewable Energy Resource Development Plan (hereinafter referred to as “the Plan”) based on the results of the survey and the renewable resource assessment carried out under section 7.
(5) Upon approval of the Plan by the Cabinet of Ministers, the Minister shall cause such Plan to be published in the Gazette and it shall come into operation on the date of such publication or on such later date as may be specified therein.
It is interesting to find out whether such a Plan has indeed been prepared by the SLSEA and gazetted, and if so, the President should be aware of it. Otherwise, it is time its management too is changed if the President wishes to see that “generation of renewable energy should be carried out expeditiously”.
SRI LANKA’S POTENTIAL FOR RE SYSTEMS
Sri Lanka has a large number of reservoirs both ancient and recently built. Those in the North, North Central and Eastern Provinces where the solar insolation is high with area more than 1000 ha add up to more than 50,000 ha. Since solar PV panels require about 1 ha for every 1 MW of installed capacity, installation of solar panels covering at least 10 % of the area of the reservoirs has the potential to install 5,000 MW of capacity generating about 8,800 GWh of electricity annually.
An all-island Wind Energy Resource Atlas of Sri Lanka developed by National Renewable Energy Laboratory (NREL) of USA in 2003, indicates that nearly 5,000 km2 of windy areas with good-to-excellent wind resource potential exist in Sri Lanka. Using a conservative assumption of 5 MW per km2, this windy land could support almost 20,000 MW of potential installed capacity (SLSEA Website). Even if 10% of this amount or 2,000 MW capacity is utilized, it will generate about 5,200 GWh of energy annually.
It is clear therefore that Sri Lanka has the resources to develop more than 14,000 GWh of energy from RE projects, solar and wind alone above what has been already committed. In addition, it is possible to develop modern technologies to utilize biomass energy more efficiently in industries reducing the demand for oil. With these RE resources, the amount required to meet the 70% share in total electricity generation by 2030 could be achieved comfortably. Coordination and cooperation among stakeholder institutes such as the CEB, SLSEA, PUCSL, Irrigation Department and land authorities are prerequisites for realizing this target.
FUNDING FOR RENEWABLE ENERGY PROJECTS
The CEB has not shown any interest in utilizing funding for the development of RE systems offered by foreign sources. Under the International Solar Alliance, India has offered a USD 100 million credit line for the development of solar projects and has assigned a company in India to help Sri Lanka to build a solar park. This is a good opportunity to get one of the two planned solar parks built. Apparently, the CEB has not expressed any willingness to accept this offer.
Under the Paris Agreement, funding is available to developing countries for building RE projects that will save Carbon emissions. However, it is necessary for the host institution to prepare a suitable project proposal and submit it to the Secretariat of the UN Framework Convention on Climate Change (UNFCCC) through the Ministry of Environment, which is the National Focal Point of UNFCCC, to seek the funding. The Writer’s understanding that neither the CEB nor the SLSEA has taken any initiative to prepare a proposal to seek funding for this purpose. The Environment Ministry’s Climate Change Secretariat is partly responsible for this lapse.
CONCLUSION
The President has clearly given his targets for achieving RE share by 2030 as 70% in the power sector. In order to achieve this target, the country has to generate 22,000 GWh from RE sources in 2030. Regrettably, the CEB or the SLSEA has taken only a lackadaisical attitude towards developing RE projects rather than an aggressive approach necessary to meet the President’s target. However, the country has enough RE potential to meet this shortfall comfortably, provided necessary regulatory system is in place and the responsible professionals are enthusiastic in developing them.
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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