Features
Electricity tariff: Rational approach needed
By Eng Parakrama Jayasinghe
parajayasinghe@gmail.com
The Ceylon Electricity Board (CEB) and the Ministry of Power and Energy have called for a further 66% increase in the electricity tariff, citing an increased cost of generation in the year 2023. This coming on top of the 75% increase already granted in august 2022 can hardly be logical or warranted. While the previous increase may be justified due to lack of any attempts by the CEB to seek a revision of tariff for many years since the last tariff declaration in 2014, a further claim for tariff cannot be accepted unless the claim and the supporting documentation are clearly evaluated and verified.
The Electricity Act of 2009 and the subsequent amendments as well as the PUCSL Act provide clear guidelines on the procedure to be adopted for such an evaluation process. Accordingly, the PUCSL (Public Utilites Commission of Sri Lanka) has called for public comments on the proposed increase in tariff by public announcements, which is part of the set down procedure. There is no provision in either of the above Acts to bypass this procedure. As such, attempts by the Minister and the Cabinet of Ministers to bypass this procedure and declare increased tariff as well as to back date such an increase is illegal.
The comments below are provided for the PUCSL to consider carefully the data provided by the CEB in support of their claim of increased costs and the lack of justification of the assumptions made.
The following comments take precedence in addressing the sales and generation forecasts, as it is the fundamental issue which would support or debunk the claim for a tariff increase.
Basis for claim for increased
cost of generation
It is pertinent to note that the calculations offered in support of the proposed increase in tariff purportedly to dig the CEB out of the financial hole that they dug for themselves over the years, needs to be evaluated carefully. The data submitted by the CEB cannot be accepted without independent review by those with wider and in-depth insights to the national economic issues, not merely limited to the ill-conceived forecasts of the Utility.
Predictions from CEB Generation Requirements for 202
Many different numbers have been quoted by the CEB on the forecast demand for electricity in the year 2023 as noted below as per the submission by CEB.
However, the PUCSL has published the actual demand for electricity for the year 2022 as 13301.12 GWh which with the transmission and distribution loss of 9.7% requires a generation of only 14578.02 GWh. As such the forecast of an increase of 16,520 GWh even excluding the power cuts which is 13% increase over the demand in 2022 is highly questionable in view of the continually depressed state of Sri Lanka Economy.
As the CEB is fond of declaring, there is a direct correlation between the Electricity Demand and the GDP growth as shown in the graph below. (See Figure 1)
The slight gain of 3.6% seen in year 2021 has been more than offset by the 9.3 % contraction of the GDP in 2022. This is expected to reduce further by 4.2 % in the year 2023. The equivalent reduction in electricity demand in 2023 Vs 2022 already seen over the first few weeks is shown below. (See Figure 2)
The CEB has proven time and again its inability to correctly forecast the generation needs as proven in the several LTEGP plans and shown below.
Such assumptions make one wonder if these planners are living in Sri Lanka or in some mythical land. This is not surprising considering the kind of assumptions made in preparing their latest long-term generation plan. This document submitted for review to the PUCSL in July is based on the dollar parity and other financial parameters prevailing in December 2021. Obviously, the financial tsunami which submerged Sri Lanka in March 2022 has escaped their attention.
As such, the CEB projection of an electricity demand of over 16520 GWH leading to an estimated cost of Rs 722 Billion for the year 2023 is highly overrated. Hence the call for the 66% escalation of the consumer tariff is clearly not acceptable.
In contrast, the PUCSL has recommended the reality of downturn in demand seen during the year 2022, needs to be accepted as the reality for the year 2023 as well driven by both the continued downturn in the economy coupled with the reduced demand electricity caused by the already heavy tariff imposed in August 2022. These are data readily available and cannot be ignored.
The Power Cuts Cannot be avoided.
The unpalatable truth of the severe shortage of forex to pay for coal and oil imports cannot be ignored. Any amount of increase of tariff in rupees is not going to solve this problem. As such some degree of power cuts will be inevitable until the rains set in after April. This will further reduce the actual generation using the expensive coal and oil and thereby the total cost to the CEB. While each unit generated with coal at Rs 70.00 and oil at Rs 120.00 means a loss of Rs 41.00 and Rs 91.00 respectively, all the RE based power generation would result in a substantial surplus.
Even though the use of coal with whatever funds allocated cannot be avoided in the dry months of the year to limit the number of hours of power cuts, no such justification can be made for continued use of oi for power generation. It may be recalled that Sri Lanka managed to do without any oil on a number of days in the past year aided by good rain fall.
The consumers will however reluctantly accept the reality and discomfort of the extended power cuts, if they recognise that the authorities are taking reliable action to prevent such being a continued problem over the years. This is what is not happening now by the continued over dependence on imported fossil fuels, the cost of which is totally outside the control of Sri Lanka and is a severe drain on the forex reserves and the economy. There is no longer any question that any type of resources available abundantly in Sri Lanka are much cheaper and more importantly does not drain the scarce forex.
Of course, in contrast, there are attempts already underway to bridge the generation deficit using Emergency Power running on oil at an enormous cost. This option which also requires dollars to import the oil in addition to rupees to pay the generation companies is fraught with the danger of reactivating the dreaded fuel queues an experience best forgotten. The gain made by the introduction of the QR system for which the Minister should be congratulated, will fly out of the window.
Recent history has shown that we can do without oil for power generation, even if it means the continued power cuts, provided that positive action is taken to ensure the rapid expansion of renewable resource based power generation, particularly roof top solar PV to remove such power cuts at the earliest possible date.
We have demonstrated this possibility on many days during 2022, one example of which is shown below. (See Figure 3)
This is a trend that should have been accepted as the way forward by planning for alternative sources even during the dry months such as the rapidly growing Solar PV on rooftops, which are implementable in a very short time with no cost to the state or the CEB and does not require continued drain on Dollars.
The CEB and the Ministry lacked the perspicacity and the vision or the mere competence to understand this reality. They were also obdurate to reject the many proposals made by those who have the vision and the ability to accelerate this change. The consumers cannot be burdened with the unnecessary expenditure on continued use of oil, both in rupee terms and forex. The standard ruse of awarding contracts for use of emergency power is being repeated this year as well and cannot be allowed.
The installation of rooftop Solar PV is the fastest option and has shown remarkable progress over the years presently at 700 MW. There would be even more interest by consumers to increase this penetration which can and should be promoted most aggressively leading to further reduction in the demand. While the CEB has made some relaxation of the barriers for this industry in recent times and have declared various targets, there is still no concerted effort to make use of the opportunity which will make significant impacts in a short time. The Ministry, which can play an even bigger role by policy level interventions, does not seem to understand this opportunity.
Role of Demand Side Management and Energy Conservation
The importance of reducing the demand by avoiding waste of energy as well as other means of efficient use of electricity cannot be overemphasised. The Ministry and the Sustainable Energy Authority have abdicated their responsibility in this regard. The mere replacement of all incandescent bulbs and even the CFL bulbs presently in use, can result in a reduction of demand of over 782 GWh annually. The SLSEA has adequate data and experience in making much greater impact, instead of watching from the sidelines.
The market price of LEDS is about Rs 1,000 whereas the fair price should be below Rs 300, which the state has failed to establish. Other countries including India have provided consumers with LED bulbs at prices well below the cost to encourage this change. (See Figure 4)
What is the demand to be expected in year 2023?
The charts below which appeared in the media few weeks back, are most revealing. (See Figure 5)
Figure 5
The need for a cost reflective consumer tariff.
There is no argument on this requirement.
The provisions of the Electricity Act are quite clear on the procedure for processing any requests by the Utility for tariff revisions. The PUCSL is obliged to follow such procedure and award any justifiable claims, after following such procedures. No one including the Cabinet or the President has the legal right to bypass such procedures. However, the PUCSL is not obliged to accept any cost declared by the transmission licensee, unless it is proven to be the Least Economic Cost of generation using efficient use of resources and systems as provided in the Clauses 3 (1) d, 4(1)a , and 4(1)d of the Electricity Act No 20 of 2009 and subsequent amendments.
The PUCSL has already initiated this process and should be allowed to continue same. The outcome will determine if an increase in consumer tariff is justifiable, taking into account the national interests in addition to maintaining the state monopoly utility in a viable state.
The acceptability of the predicted demand forecast
The information made available in public media point to many doubtful deals on import of coal and oil. It is clear that there is no transparency in these deals, which is also leading to greater cost of generation being forced on the consumers. The Auditor Generals reports themselves provide the evidence.
However, this kind of corrupt practices are perpetuated mainly due to the continued dependence on imported fossil fuels. While Sri Lanka cannot completely avoid their use in the short term, the reality is that none of the RE sources, the feasibility of such is without question, are either devoid of use of any fuels such as Solar and Wind, or only require the use of locally available fuels such as fuel wood and agricultural waste, which also do not open the path for corrupt practices. This reality is being ignored continually placing the country in continued economic problems as well and the financial pressure on consumers.
Even in the present dire circumstances when much greater transparency and due diligence are required, they seem to be totally lacking. The PUCSL has already published some data on the unacceptability of the fuel costs submitted by the CEB. The ministry which is expected to over see these transactions has failed completely in their duty to the consumers, raising doubts of their own complicity in such corrupt practices.
CEB Proposed Tariff Structure
This may be a moot point, if the above issues on the need for a tariff adjustment based on a false prediction of demand forecast are resolved. As stated above there are many ways where by the demand can be maintained at 2022 level or even lower for the year 2023. If such is the case the PUCSL has already demonstrated that the income levels of CEB after the tariff increase in Aug 2022 are adequate to cover the reasonable costs of the CEB. It is known by data over many years and supported by many reports by the Auditor General and other agencies that there are many ways the accountability and efficiency of the CEB can be improved. These could lead to substantial surplus of income for the CEB to cover their past dues and be profitable.
While the long-delayed tariff adjustment did make some changes in the level of tariff for different strata of consumers, it has now reduced the purported, heavy subsidies on the lower end consumers and religious institutions. This will be and incentive for such consumers to engage in energy conservation and even to install roof top solar systems. These are some positive outcomes of the last tariff revision which is now in place.
The level of tariff payable by each segment is a national issue and the concept of an average paid by all segments is not acceptable, in the light of the huge difference in cost of generation. Sri Lanka as a whole paid for the installation of the large number of major hydro system using national funds. Such costs have now been recovered many time over. As such the benefits should accrue to the vast majority of the low-end consumers, up to a reasonable limit of consumption. This is already reflected in the last revision and there is no call for any further changes.
It is already stated the increased cost if any, are due to the use on now vastly increased cost of fossil fuels. The increased generation in the margin if any, are to serve the high-end consumers. As such if any such cost recovery is needed such costs should be recovered from those consumers only. The present arguments on competitiveness of industries vis a vis the neighboring countries due to cost of electricity has been debunked, with Sri Lanka even now subsidizing the industries and commercial establishments.
The declared commitment that access to clean energy at affordable prices is an SDG Goal (Goal No 7) ratified by Sri Lanka, is being ignored. Sri Lankan economy is driven by the SMEs and individuals and it is they who should receive such affordable energy to contribute more to the economy. As stated above they have already paid for such low-cost systems and have all the rights to enjoy the benefits. As such the notion that they are being subsidized cannot be accepted.
Who should decide the Electricity Tariff?
It must be accepted that the decision on final consumer tariff must necessarily be a national economic issue and thus cannot be left to the Public Utilities Commission of Sri Lanka or even the Ministry of Power, both of which address it from a narrow financial view point pertaining to the institutions under them only. Neither of them is competent to do so and have proved to be a total failure over many years subjecting the national economy to such grave crisis in many ways.
At least now, there should be a pragmatic approach by competent individuals and agencies with the necessary back ground and insights and the ability to appreciate the wider impact on the national economy.
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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