Features
Matters COPE overlooked
Norochcholai coal-fired power plant probe:
By Dr Janaka Ratnasiri
The Chairman of the Committee on Public Enterprises (COPE) has said at a meeting of COPE, held on Tuesday, (24th) in Parliament, that the entire country is affected by the Norochcholai coal power plant (CPP). This was reported in several print media, including The Island of 26.11.2020. He has further said that the Central Environmental Authority (CEA) must also be involved in assessing its impacts as issues created by the power plant, for example air pollution, has an impact on the entire country, without leaving it in the hands of the Environmental Authority of the Provincial Council of the North Western Province (NWP) alone.
FLY ASH FROM COAL POWER PLANTS
The three CPPs at Norochcholai were burning a little over 2 Mt of coal, annually, during 2016 – 2019, as reported in the CEB Annual Statistical Digests. Assuming that the ash content, in coal, is 16%, which is the maximum permissible limit, the three CPPs generate about 300,000 t of ash, annually. Out of this, about 20% is collected at the bottom as bottom ash and the rest is directed into the stacks. After getting filtered in the stack, the balance is released into the atmosphere as fly ash. Therefore, over the life time of a CPP, they jointly will release over 8 Mt of fly ash.
The Chairman has said that about 6.58 Mt of fly-ash is already stored in the premises. He also said that LKR 26 million was spent annually to spray water on the fly-ash to prevent their dispersion. In response to many complaints received from the public of loss of livelihood among farmers and fishermen, due to deposition of ash on agriculture land and sea, the CEB is planning to construct a wind barrier 1,200 m long and 15 m high to prevent wind blowing away the fly ash into neighbouring areas, at a cost of Rs. 724 million, which was approved by the Cabinet on 19.01.2018. There have been complaints from the CEB staff, at the plant site itself, of increased respiratory ailments among them due to high levels of air pollution within the premises. A public-interest organization has, in fact, filed a law suit against the CEB, demanding measures to be taken to reduce pollution by the CPP.
Coal ash is said to contain many toxic heavy metals, such as mercury, arsenic, chromium, cobalt, zinc as well as radio-active material, according to overseas literature. With nearly a decade of existence, the CEB has not made any effort to get the coal and ash analyzed to find out the actual amounts of these toxic metals present in them and how they depend on the source of coal. Adequate analytical facilities are available in the country for this purpose. What is lacking is a drive.
MERCURY IN FLY ASH
In view of the heavy mercury pollution caused by an industry which had released mercury compounds into the Bay of Minamata in Japan many years ago, and the subsequent adverse impacts it caused on the health of people who consumed fish caught from the Bay, the Minamata Convention on Mercury was adopted in October 2013 and entered into force on the 16th August 2017, with a view to phase out Mercury emissions world-wide. It is interesting to note that it had taken over 10 
years for the UN to take this preventive measure since first detection of neurological diseases among the affected people. Sri Lanka is a Party to this Convention and is therefore obliged to comply with it. The Parties agreed to collect data on the prevalence of Mercury in their countries and its impacts, to begin with.
In response, a local study was undertaken within the fishing community in Puttalam. The study revealed the presence of high levels of Mercury in women’s hair, attributed to regular consumption of fish containing high concentrations of Mercury (Sri Lanka J. Aquat. Sci. 23(2) (2018): 179-186) released by the CPP. Among the harmful effects that can be passed from the mother to the foetus include neurological impairment, IQ loss, and damage to the kidneys and cardiovascular system. At high levels of mercury exposure this can lead to brain damage, mental retardation, blindness, seizures and the inability to speak.
Another global study undertaken for the same purpose, found that in Puttalam, the Mercury content in the hair of women living near the lagoon was significantly elevated, with a mean of 2.74ppm ± 2.8ppm. Of great concern is that 50% of the women had a level that exceeded 2 ppm Hg and 13% exceeded 4 ppm Hg. “Of all women who participated in the sampling, 77% had a body burden of mercury exceeding the 1ppm reference level”. (https://ipen.org/sites/default/files/documents/ipen-mercury-sids-v1_5-en-web.pdf). Regrettably, the COPE members appeared to be unaware of this problem, even though it was given publicity in local media recently.
MANUFACTURE OF BRICKS FROM COAL ASH
The COPE has, however, shown concern about the accumulation of high volume of ash at the CPP. CEB officials have responded by saying that efforts are being made to use coal ash in the manufacture of bricks and the matter had ended there. What the CEB officials did not tell the COPE was that bricks are already being manufactured and used in construction work. For example, the headquarters building of the Sri Lanka Association for the Advancement of Science (SLAAS) was constructed recently using these bricks. See http://www.ft.lk/columns/Built-from-ash-A-building-that-houses-Sri-Lankan-science-speaks-silently/4-703849.
The question is how safe is coal fly ash for the manufacture of bricks used in the construction of dwellings. The reason is because fly ash contains high amounts of radioactive nuclides which can get distributed country-wide if bricks are made out of coal ash. In a study undertaken by the Nuclear Science Department of the Colombo University, coal and ash sampled from the Norochcholai plant were found to contain radionuclides of Uranium, Thorium and Potassium, according to a paper presented at the Annual Session of SLAAS in 2013. The radio-activity of these substances is given in the Table, according to which coal from South Africa was found to contain Uranium and Thorium levels significantly above the global averages.
It is desirable if the CEB, therefore, undertakes two studies before they start manufacturing these bricks on a large scale. One is to determine the concentrations of radio-active nuclides present in coal and coal ash, with samples originating from different countries. The second is to carry out a survey on the ambient radio activity in buildings constructed with bricks manufactured from fly ash. The CEB could outsource these studies to institutions generally undertaking such assignments. It is important that the findings of these studies are made public.
DISPERSION OF EMISSIONS FROM COAL POWER PLANTS
The COPE Chairman has said at the COPE meeting that air pollution from the Norochcholai CPP has an impact on the entire country. In a CPP, various gaseous emissions, such as Sulphur Dioxide (SO2), Nitrogen Dioxide (NO2), Particulate Matter (PM) and Carbon Dioxide (CO2) are generated during combustion of coal. These are first sent through filters to capture the excessive amounts of SO2 and PM and the balance released into air. The captured particulate matter is stored as fly ash. This filtering equipment fitted in the stacks include a Flue Gas Desulphurization (FGD) unit to reduce SO2 emissions and Electrostatic Precipitators (ESP) or Fabric Filters to reduce PM emissions. However, they can reduce only a certain fraction of emissions and their efficiency declines with time, particularly under coastal environments. It is also reported that these pieces of equipment sometimes breakdown resulting in the entire pollutants generated getting released into air.
The emissions released into the atmosphere get dispersed within the airshed covering the North Western and North Central Provinces, the extent and quantity depending on the wind pattern which varies hourly, daily and seasonally. During the SE monsoon period, prevailing winds blow interior and the possibility
of emissions reaching the Western and Eastern Provinces cannot be ruled out. These emissions, after getting transported over a certain distance depending on the wind regime, get deposited back on the ground adding to their concentration at ground level generally referred to as the Ambient Air Quality (AAQ).
EMISSION STANDARDS AND MONITORING
The CEA has published Regulations in the Gazette announcing stack emission standards (SES) for power plants and also on AAQ standards. In respect of stack emissions, the regulations say that “any person who fails to comply with the above regulations, shall be liable to an offence under the National Environmental Act, No. 47 of 1980”.
The Regulations on SES were published in the Gazette Notification dated 05.06.2019 specifying maximum permissible levels of SO2, NO2, PM and smoke. These values are given in the SES in units of mg/Nm3 (Normal cubic metres). Their conversion in to other useful forms such as parts per million (ppm) or mg/GJ or mg/kWh needs certain assumptions to be made on the fuel quality and plant efficiency. The CEB claims that they monitor the stack emissions on all pollutants regularly using remotely operated sensors but this information is not made public.
The Regulations on AAQ Standards were published in the Gazette Notification, dated 15.08.2008, specifying maximum permissible concentrations of several pollutants including Carbon Monoxide (CO), Ozone (O3), SO2, NO2, PM2.5 and PM10 present in ambient air. The last two refer to particulates with diameter 2.5 micro metres and 10 micro metres, respectively. The measurements are to be averaged over periods of 1 hour, 8 hours and 24 hours and carried out according to methods specified in the Regulations.
According to the Environment Impact Assessment (EIA) of the original CPP project, at least two permanent AAQ monitoring stations need to be installed in Puttalam area, and data displayed in public places. The writer believes this has not been done. The CEB has assigned a contract to the Industrial Technology Institute (ITI) in 2018 to monitor AAQ around Puttalam using ITI’s new mobile facility. ITI had done the AAQ measurements covering all seasons (Personal communication), but the data is not available in public domain, despite the condition laid down in the EIA. The COPE Chairman should have inquired as to whether the CPP complies with these two sets of standards, SES and AAQ and if not, the reasons.
AUTHORIY FOR PROJECT APPROVAL
The COPE Chairman also has directed the CEA to get involved in overseeing the operation of the Norochcholai CPP without leaving it in the hands of the Environment Authority of NWPC. This Authority has wide powers according to its statute, according to which all prescribed projects that are being undertaken in the NWP by any Government or private institution or an individual will be required to obtain approval under this Statute for such prescribed projects. It is noteworthy that out of all Provincial Councils, only the NW Provincial Council has established its own Environmental Authority.
In the event the Minister assigns a different project approving agency, such agency will have to grant approval for a project only with the concurrence of the Provincial Authority. Hence, it is a question whether NWP Environment Authority (EA) will listen to CEA, because it is not bound to do it according to its statute. The CEB Chairman has said at the COPE meeting that the EIA study for the new CPP would be done jointly by CEA and EA of NWP. Actually, there is no need to spend millions of Rupees on EIA studies when it is obvious that a CPP causes heavy pollution while clean alternative options are available.
What generally happens in an EIA is that various measures are pledged to minimize impacts on which the EIA is approved, but there is no guarantee the pledges are kept once the project is implemented. Sometimes, projects are given approval subject to certain conditions, but these conditions are not published, which tantamount to giving an open approval. What is important is to select projects that do not intrinsically generate pollution.
One would expect such a powerful body like EA of NCP to maintain a website giving information on projects being considered by the Authority, projects that have been granted approval. Also, in the case of Norochcholai CPP, the environment data being collected by the CPP should also need to be posted in the website for the information of the public. But the Writer found no such site when searched in the Google. The data are not even posted in the CEB website which posts all other data such as generation and sales data promptly in its website.
CEB’S FUTURE PLANS FOR POWER GENERATION
The Cabinet, on 22.01.2020, granted approval for the construction of two 300 MW CPPs as an extension to the existing CPP at Norochcholai, together with construction of two 300 MW combined cycle gas turbine (CCGT) power plants operating with natural gas, one jointly by CEB and India/Japan, and the other with funding from the Asian Development Bank (ADB). The CEB Chairman, however, confirmed only the construction of two CPPs at the COPE meeting and not the construction of two 300 MW gas power plants already approved by the Cabinet. He said that according to the long-term plan of the Norochcholai CPP, a 300 MW (coal) plant was to be added to the complex by 2023 and a further 300 MW (coal) plant by 2026. According to the CEB Draft Plan for 2020-39, two more 300 MW CPPs are to be built within this decade.
Though the Cabinet had granted approval for building CPPs in January, later the Cabinet granted approval again for including the first CPP as a project to be carried out urgently as a post-COVID activity. This means that the CPP could be selected and purchased without going through the normal procurement procedure, despite the fact that the cost of a 300 MW CPP could exceed LKR 80 billion. Naturally, everyone is eyeing to take control of this purchase because of the many benefits amounting to millions if not billions of Rupees that would get transacted. Building a CPP has no relation to COVID for it to be included as a post-COVID activity. It is only an unethical way of circumventing the tender procedure. It is surprising why the learned COPE members did not see through this unethical practice and question the CEB Chairman.
Gas power plants (GPP) are also included in the CEB’s latest long-term plan for 2020-39, meaning they are acceptable as low-cost options to be added to the grid. In addition to the two-gas fired 300 MW GPPs approved by the Cabinet at the January meeting, the Cabinet has earlier granted approval for building a 300 MW GPP on BOOT basis at Kerawalapitiya by Lakdhanavi for which proposals were called in 2016 November and the award finalized now.
According to media reports, however, the Attorney General’s Department is trying to hold it back citing some shortcomings in the tender documents issued 4 years ago, but the Minister of Power wants to pursue it despite AG’s objections. Had this tender evaluated within a year as indicated in the tender documents without CEB dragging it for 4 years, the country would have had the benefit of a 300 MW of clean energy supply by now. The COPE should have inquired about this long delay from the CEB.
PROBLEMS ASOCIATED WITH COAL POWER PLANTS
A CPP is more complex than a CCGT plant and requires several days of waiting for a plant to be energized after an unannounced shut down, whereas a CCGT Plant could be energized within a matter of a few hours. The CEB still depends on Chinese technicians to maintain and operate the Norochcholai CPP even after a decade of its operation. A CPP can function only as a base-load plant whereas a CCGT Plant can function both as a base-load and a peak-load plant. This is another matter that COPE members overlooked.
A CCGT Plant is more compatible for operation with renewable energy sources such as solar and wind power plants with fluctuating outputs than a CPP which cannot respond to such fluctuating supplies. Unlike a CPP, a GPP does not generate even a gram of ash, any SO2 and no particulates. Even the NO2 generated and warm water released from a GPP are much less that that from a CPP.
It is surprising therefore that none of the leaned members of COPE questioned the CEB Chairman, why CEB wants to pursue building more coal power plants when they cause so much pollution as described earlier and pose problems in operation and maintenance in preference to a natural gas power plant which does not cause any such pollution and easier to operate. Currently, there are three CCGT Plants being operated and maintained by Sri Lankans for decades. Obviously, the COPE members appeared to have not done their homework before coming to the meeting.
The other important aspect of a GPP is that CO2 emitted by a GPP is only about half that of CO2 emitted by a similar capacity CPP. Hence, shifting from coal power to gas power is an acceptable means of mitigating carbon emissions as quired under the Paris Agreement. In a paper the Writer submitted to the 2019 National Energy Symposium, he showed that by shifting from CEB’s coal power-based Base Case Plan for 2015-34 to a no-coal case given in the 2018-37 Plan, the amount of CO2 emitted during 2021 – 2030 period could be reduced by 25%, which is more than the reductions targeted from all sectors.
Further, shifting from coal power to gas power altogether will help in achieving the President’s target of meeting 70% of energy consumed in generating electricity from renewable sources by 2030, as announced at a meeting he had on 14.09.2020 with the Power Minister, Renewable Energy State Minister and officials of the two Ministries and institutions coming under them. This is because the fossil fuel share will get reduced significantly with GPPs compared to that with CPPs.
CONCLUSION
Though the COPE had a meeting specially for looking into the affairs of the Norochcholai CPP, members appeared to have probed into matters seen on the surface instead of looking deep into its affairs. In particular, COPE has overlooked the following aspects of the Norochcholai CPP.
1. Whether the stack emissions from the plant conform to the National Emission Standards for Power Plants, violation of which is a punishable offence, and why the data are not made public.
2. Whether the AAQ measurements made by the CPP conform to the National AAQ Standards, and why the data collected are not made public.
3. Whether the CEB is aware of loss of livelihood for many in Norochcholai caused by deposition of ash on agriculture land and sea, and whether any compensation was paid for them.
4. Whether the CEB is aware of high levels of Mercury found in hair of women living around Puttalam Lagoon and why no action has been taken in this regard.
5. Whether the CEB has got the coal and ash from the CPP analyzed for their toxic heavy metals and radio-nuclides present in them, and if not why.
6. Whether the CEB is aware of the presence of radio-nuclides in coal ash and hence their unsuitability to manufacture bricks for use in house construction.
7. Whether the CEB is aware of the fact that it is difficult to achieve the President’s targets for RE share in power generation (70%) by 2030 by building more coal power plants.
8. Whether the CEB is aware of the fact that by shifting from coal to gas for power generation, the country can easily meet its obligations towards the Paris Agreement on Climate Change.
9. What justification is there for planning to build more coal power plants causing heavy pollution when non-polluting power plants burning alternative clean fuels are available.
10. What justification is there for CEB to take four years to evaluate and make an award of a tender for building a 300 MW GPP operating with gas on BOOT basis.
11. What justification is there for the CEB to include building a coal power plant as a project to be executed urgently as a post-COVID activity which is nothing but an unethical measure to circumvent tendering.
The writer expects the COPE will probe into above matters at its next meeting with the CEB.
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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