Features
More on inconsistencies and conflicts among Acts
Closure of Public utilities Commission – II
By Dr Janaka Ratnasiri
This is further to the writer’s piece on the same title appearing in The Island of 07.12.2020. See https://island.lk/closure-of-public-utilities-commission-cutting-off-the-nose-to-spite-the-face/.
LETTER FROM PRESIDENT’S SECRETARY
The organization under scrutiny, the Public Utilities Commission of Sri Lanka (PUCSL), was established in 2002 through an Act of Parliament No. 35 of 2002, mainly for the purpose of regulating the utilities industries in the country. Initially, the electricity and water service industries came under the Act. Later, through a resolution passed in the Parliament, the Petroleum Industry was also included.
The Commission comprises five members appointed by the Minister on the recommendation of the Constitutional Council. However, any member could be removed for any alleged unbecoming reason, only after the Minister submitting a report to Parliament, including the complaint against the member, as well as the member’s representations, and the majority accepting the recommendation for the removal of the member. Under such a background for the removal of a Commission member, it is unlikely that the President’s Secretary has the powers to close down the Commission altogether.
Further, it appears that in instructing to close down the PUCSL, natural justice has not been exercised, which requires that a person, or an institute, is given adequate notice, receive a fair and unbiased hearing, before a decision is made against the person/institute. If the Government felt that the PUCSL was responsible for the alleged delays in building power plants and implementing generation plans, the logical action the Government should have taken was to appoint a competent and unbiased committee to examine the allegations and make recommendations, after giving a hearing to the PUCSL’s explanations.
Even if the allegations are found valid, the correct course of follow-up action would have been to either remove the Chairman, or the Director General, if they are found responsible, or amend the Act, and certainly not close down the Commission. If the government still feels that the PUCSL is not wanted, an Act needs to be passed in Parliament to repeal the original PUCSL Act. The writer believes the President’s Secretary is well aware of this procedure. Further, in an hour-long interview given by him to a TV Channel on Sunday (6th) which went past midnight, he described how he takes decisions on important national issues. In that context, it is very unlikely that the alleged letter was issued by him.
Perhaps, the response of the government Parliamentarians, claiming that the letter was a fake, when the matter was taken up by a member in the Opposition, may have some truth. According to media reports, their attempts to contact the Secretary to the Treasury to verify the authenticity of the letter ended up with no success. If the letter is indeed a fake, the government should find out who originated it and prosecute him for dis-reputing the government.
RELATIONSHIP BETWEEN THE PUCSL AND THE CEB
Nevertheless, it is necessary to clarify certain matters pertaining to these two organizations, the PUCSL and the CEB, irrespective whether the letter is a fake or not. This is because there is a burning issue between them as evidenced from the remarks made in the Budget Speech and by the CEB Chairman, described in the writer’s previous article. Hence this write-up is published.
In the first half of the last century, electricity was available only in Municipal and Urban Council areas, and they themselves generated the electricity and distributed it within their own jurisdiction areas under the general supervision of the Department of Government Electrical Undertakings. With the development of the Laxapana Hydropower Complex, beginning 1950, and building of a national grid to transmit the electricity generated to the rest of the country, the Ceylon Electricity Board (CEB) was established under Parliament Act No. 17 of 1969. The CEB has been granted powers to generate, transmit and distribute electricity in bulk or otherwise, under Article 11 of this Act.
The Public Utilities Commission of Sri Lanka (PUCSL) was established mainly for the purpose of regulating the utilities industries in the country, including the electricity industry. In order to give effect to this provision in this Act, the Sri Lanka Electricity Act, No. 20 of 2009 was passed for the purpose of regulating the electricity industry. By Article 2(1) of the Act, the administration of the provisions of this Act was vested in the PUCSL and the Commission shall exercise, perform and discharge all the powers, functions and duties as are conferred on or assigned to it under this Act.
Among the functions vested in the PUCSL under Article 3(1) of the Electricity Act No. 20 are the following:
to act as the economic, technical and safety regulator for the electricity industry in Sri Lanka,
to advise the Government on all matters concerning the generation, transmission, distribution, supply and use of electricity in Sri Lanka; and
to approve such technical and operational codes and standards as are required from time to time to be developed by licensees;
It should be noted that the PUCSL serves as the regulator, not only for the electricity sector, but also for the water services and petroleum industries. Having such a regulator is an internationally accepted practice and it enhances the confidence among overseas parties to invest in these industries and the credit-worthiness of regulated industries. Any attempts to close down the PUCSL is therefore a very shortsighted measure, to say the least.
PERMISSION TO GENERATE, TRANSMIT AND DISTRIBUTE ELECTRICITY
Under the Article 9(2) of the Electricity Act No. 20, “No person other than the Ceylon Electricity Board, (CEB) shall be eligible to apply for the issue of a transmission licence”, while the CEB, a local authority or a company incorporated in Sri Lanka is eligible to apply for a transmission or a distribution licence. When a Chinese Company was planning to build a transmission line from its power plant being built at Hambantota to their industrial estate, they had to do it jointly with the CEB to circumvent this restriction.
In the past, generation licences have been issued to several independent power producers (IPP) for operating thermal power plants and to a large number of IPPs for operating renewable energy power plants. Whereas, only one company, a subsidiary of the CEB has been issued a distribution licence. It may be recalled that prior to the establishment of the CEB, generation and distribution functions, within the municipal and urban councils were handled solely by the respective local bodies.
Under the Article 13(3) of the Act, “a person shall not be granted both a transmission licence and (a) a generation licence; or(b) a distribution licence, while the Article 13(4) says “a person shall not be granted both a generation licence and a distribution licence”.
What this means is that both the PUCSL and the CEB were acting in violation of the Electricity Act No. 20, because the CEB was issued licences by the PUCSL for generation, transmission and distribution of electricity, disregarding the provisions in the Act.
In the Amended Electricity Act No. 31 of 2013, the Article 9 of the original Act was amended to “exempt any person or category of persons from the requirement of obtaining a licence for the generation or distribution of electricity, where such person engages in community-based electricity generating project on a non-commercial basis. However, as described before, under the CEB Act 79 of 1979, the CEB has the powers to generate, transmission and distribute electricity in bulk or otherwise.
So, there appears to be a conflict between the CEB Act and the Electricity Act No. 20. Neither the Electricity Act 20 of 2009 nor the Electricity (Amended) Act No. 31 of 2013 has repealed the CEB Act. Hence, the provisions of the CEB Act with regard to its powers to generate, transmit and distribute electricity still remain valid.
REFORMING THE POWER SECTOR
In order to comply with the provisions of the Electricity Act, it is necessary to have separate entities for undertaking the three functions – generation, transmission and distribution. For this purpose, a draft bill titled Electricity Reforms Bill was presented to the Parliament in 2002, outlining sector reforms comprising restructuring of the electricity industry by breaking the Ceylon Electricity Board (CEB) and Lanka Electricity Company (LECO) into several independent state-owned companies to carry out generation, transmission, and distribution functions.
The Bill when presented to the Parliament brought in strong protests from many quarters including CEB trade unions and other trade unions as well as from several political parties. They saw this Bill as an initial step towards privatizing the CEB and consequently loss of employment for its staff. Once the government gave the workers an assurance that the companies formed will hold 51% share by the government and that the workers’ rights will be safeguarded, the protests died down and the Bill was passed in March 2002.
It was gazetted as Electricity Reforms Act No. 28 of 2002 on 13 December 2002. However, the necessary order to give effect to the Act was not gazetted by the Minister and as a result the Act was left in abeyance, until it was repealed by Article 63(1) of the Electricity Act No. 20 of 2009.
However, considering the need to unbundle the CEB, including compliance with the Electricity Act and also to make its administration more flexible, the writer published an article in The Island of 07.12.2020, highlighting the advantages that could accrue by unbundling the CEB as recommended by several international consultants. The article is accessible via the link: https://island.lk/power-sector-reforms-urgent-need-to-revisit-them/.
CEB’S LONG-TERM GENERATION EXPANSION PLAN
In Article 13 of the Sri Lanka Electricity (Amended) Act No. 31 of 2013, the Section 43 of the principal enactment was amended and the following section is substituted: (2) A transmission licensee shall, based on the future demand forecast as specified in the Least Cost Long Term Generation Expansion (LCLTGE) Plan prepared by such licensee and as amended after considering the submissions of the distribution and generation licensees and approved by the Commission, submit proposals to proceed with the procuring of any new generation plant or for the expansion of the generation capacity of an existing plant, to the Commission for its written approval.
Though the requirement that procuring of any new generation plant or expansion of generation capacity should be based on the LCLTGE Plan prepared by the CEB has been incorporated into the Act, the concept of a LCLTGE Plan itself is highly flawed, as described in the writer’s previous article. Hence, the Act itself is placed on an unsound footing when it specifies that compliance with the Plan is necessary to proceed with a project to build a new power plant. The other reason is that the Plan is updated once in two or three years and the requirements specified in the Plan with respect to the type of plants and their capacities keep changing. Hence, it is difficult to ensure compliance with such a Plan.
In the proposed amendments to the Acts in the Electricity Sector, priority needs to be given to exclude the reference to the compliance of any new power project with the CEB’s LCLTGE Plan for reasons given above.
SRI LANKA SUSTAINABLE ENERGY AUTHORITY’S ROLE
The Sri Lanka Sustainable Energy Authority (SLSEA) was established under the SLSEA Act No. 35 of 2007, with the objective to “(a) identify, assess and develop renewable energy resources with a view to enhancing energy security and thereby derive economic and social benefits to the country and (b) develop a conducive environment for encouraging and promoting investments for renewable energy (RE) development in the country”. The idea was to promote the generation of electricity through renewable energy projects. However, there are many barriers put in against this.
The Act specifies that no person shall engage in or carry on an on-grid (Article 16) or off-grid (Article 23) renewable energy project .. except under the authority of a permit issued by the Authority, and the person who is desirous of engaging in and carrying on an on-grid renewable energy project shall make an application to the Director-General for the same in the prescribed form together with the prescribed fee and the prescribed documents. The fee for issuing the application form, the writer understands, is LKR 100,000 irrespective of the size or the type of the project.
Further, the SLSEA Act says that “a permit issued on approval of an application .. shall be valid for a period of twenty (20) years, provided that the developer commences the project and begins to generate electricity within two years of being issued with the permit. At the end of the period of twenty years, the Board may .. extend the period, of validity of the permit by a further period, not exceeding twenty (20) more years. Does this mean that after the lapse of 40 years, the 100 MW wind power plant being commissioned today (8th) at a cost of USD 150 million, will have to be sold for scrap?
Then there is another problem faced by an investor of an RE project. According to the SLSEA Act, he has to obtain a permit upon payment of a fee, from the SLSEA to commence the project. But the Electricity Act No. 31 says that he has to obtain a generation permit from the PUCSL for the same project. Then, at the end of the project, he has to get the approval of the CEB to get the project output connected to the grid and sell power to the CEB. In the past, several projects permitted by the SLSEA have been delayed for years by the CEA citing various excuses which would discourage the private sector to invest on renewable energy projects in Sri Lanka. In any case, what is the necessity to have so many permits for a single project?
PROPOSED AMENDMENTS TO ELECTRICITY SECTOR ACTS
The 2021 Budget has made a proposal “to amend the Public Utilities Commission Act and the Ceylon Electricity Board Act to allow the rapid implementation of projects”. There are actually five (5) Parliamentary Acts that govern the development of the electricity sector in the country. These are CEB Act No. 29 of 1979, PUCSL Act No. 35 of 2002, SLSEA Act No. 35 of 2007, Electricity Act No. 20 of 2009 and Electricity (Amendment) Act No. 31 of 2013.
Naturally, there will be conflicts and inconsistencies among them, making decision making and implementation difficult. Limited space does not allow the writer to list these deficiencies one by one. A few, described briefly in this write up above, are summarized below.
Conflict in the CEB’s power to generate, transmit and distribute electricity
Removal of the compliance with the CEB’s Least Cost Long Term Generation Expansion Plan
Multitude of permits required for undertaking renewable energy projects
Community RE projects exempted a permit under Elect. Act No. 31 but not under the SLSEA Act.
Need to unbundle the CEB for greater efficiency and ease in operations
In addition, often the Power Purchase Agreements (PPA) are referred to the Attorney General which causes further delays in granting approvals for the projects and sometimes denial for not conforming to the Act.
CONCLUSION
It is desirable if a competent committee comprising representatives from the Ministry of Power, Ministry of Renewable Energy, Ministry of Finance, Legal Draftsman’s Dept, PUCSL, CEB, SLSEA as well as representatives from the IPP industry, Renewable Energy Industry and an independent academic be appointed to examine these Acts and make recommendations necessary to streamline the project approval process and improve the general efficiency of the system for rapid utilization of RE sources in the electricity sector ultimately leading to realization of the President’s target of achieving 70% of electricity generation by 2030 from renewable sources.
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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