Features
Power Blackout Committee Report:Recommendations run counter to President’s policy
By Dr. Janaka Ratnasiri
The Minister of Power, four days after assuming duties, had to face an island-wide power blackout which commenced around 12.30 pm on the 17th August and lasted up to 7-8 hours. The following day, he appointed a committee, comprising Ministry officials and power experts, to investigate the matter and submit a report within a week.
COMMITTEE APPOINTED
BY THE MINISTER
The Committee comprised two administrative officers, including an Additional Secretary to the Ministry of Power, serving as the Chairman, a Retired Professor of Mechanical Engineering, an Engineer who is a Chairman of a Corporation, two Senior Lecturers in Electrical Engineering, one senior official from the Ceylon Electricity Board (CEB) and one senior official from the Ministry of Power responsible for Renewable Energy Development. The Director General of the Public Utilities Commission of Sri Lanka (PUCSL) was also nominated but did not serve as there was a separate investigation being undertaken by the PUCSL. With two members from the Ministry, including one in the Chair, and another from CEB, the Committee cannot be considered as independent.
The Committee had met on the 18th and submitted an interim Report, to the Minister, on the 24th, which was also tabled at the Cabinet meeting held on the 26th. The Report was also made available at a press briefing held by the Ministry and the contents herein are taken from this Report. According to the Report, the Committee had visited the Kerawalapitiya Grid Substation (GSS) where the initial fault occurred claimed to be due to a human error, Lakvijaya Power Station (LVPS) at Norochcholai, Protection Branch of the CEB and the System Control Center of the CEB at Pelawatta, and had interviewed the staff on duty at these stations with a view to elicit information on the following.
The key reasons for the nationwide power interruption on the 17th August 2020 at 12:30 pm onwards.
Whether the CEB has taken precautionary actions and measures to prevent recurrence of interruptions that had been encountered in the recent past for which recommendations have been extended by similar committees that could have influenced the present incident.
Recommendations for remedial measures that need to be taken by the CEB to prevent recurrence of the same and similar incident.
Whether the CEB has taken the best professional practicing measures in handling the incident and the conditions that led to it employing proper planning, operational and administrative elements and had any constraint encountered CEB’s intended professional actions.
Whether the CEB had encountered similar incidents in the past and how the situation had been then handled.
Whether the CEB could have handled the situation judiciously to minimize the implication and how this could be avoided in the future.
PRELIMINARY FINDINGS OF THE
REPORT
The Committee, in its Interim Report ,has given a set of preliminary findings, among which are the following:
Routine maintenance work on the 220 kV isolators of the Bus Coupler Bay had been carried out on the day of the incident by the Electrical Superintendent-In-Charge at Kerawalapitiya GSS, who apparently has been attending routine maintenance work at the Kerawalapitiya GSS for the past five years. The power in the Bus Bar 01 had been turned OFF for the maintenance, while the power of the Bus Bar 02 was ON. The Earth Switch 01 at Bus Bar 01 side had been OFF while the Earth Switch 02 at Bus Bar 02 side had been ON as shown in Fig. 1.2(a) at the time of incident.
Under normal operations the Earth Switch and the relevant isolator are interlocked, so that the isolator cannot be turned ON while the Earth Switch is turned ON. However, during maintenance, this interlock had been bypassed, so that isolator can be turned ON even with the Earth Switch is turned ON. At the end of the maintenance work of the 220 kV Bus Coupler Bay, while the interlock is bypassed, the Isolator on the Bus Bar 02 side had been turned ON as shown in Fig. 1.2(b), creating a 3 Phase to Ground fault.
The key reason for the nationwide power interruption on the 17th August 2020 is due to the 3 Phase to Ground busbar fault due to incorrect operation of the Bus Bar 2 Isolator of the Bus Coupler Bay by the Electrical Superintendent -in-Charge at the Kerawalapitiya Grid Substation busbar at 12:30 Hrs.
Kerawalapitiya Grid substation tripping was due to not following the correct maintenance procedure by the relevant officials including the Electrical Superintendent. The Committee also observed that there was no written maintenance protocol for this maintenance job in-line with the current best practiced maintenance protocols.
The Committee is of the view that due to the Kerawalapitiya Grid substation tripping, the system frequency has increased beyond the current setting of the rate of frequency tripping relay of the Lak Vijaya Power Station (LVPS). As a result, the generator-transformer circuits breakers of all three units of the LVPS which made LVPS unavailable to the grid, subsequently the system failed in cascade.
CEB’s recent failure to avoid a country-wide blackout and the longer duration taken to restore power to Colombo City in particular, indicates significant lapses in implementation of critical measures outlined in the previous Expert Committee Reports.
AUTHOR’S COMMENTS ON THIS
PROCEDURE
The cardinal mistake done by the Electrical Superintendent (ES) during the maintenance work was that he had disabled the interlocking system which prevents switching on the 220 kV line to the GSS while it is earthed, which is a protective mechanism incorporated into the system to prevent blunders by maintenance staff as happened. It is certainly not an “Ath Wereddak” as claimed by a senior official of the CEB. As a result, the ES was able to connect the high voltage line to the substation already earthed which created the havoc.
The question which arises is what was the necessity to disable the interlocking system to carry out the routine maintenance? The Report does not seem to have queried the ES on this. If the ES has done such an irresponsible act, deliberately, in any other organization, he would have been interdicted forthwith or at least sent on compulsory leave. But, the CEB Management thought otherwise, possibly for fear of trade union reaction.
The tripping of the 220 kV line at Kerawalapitiya apparently has caused a sudden increase in the system frequency at LVPS, resulting in the three generating units there to trip. A sudden increase in the frequency means that the speed of the generator rotors has increased suddenly. Isn’t there a mechanical device called a governor in the generator which helps in maintaining the rotor speed at a constant value? Is it a characteristic of a coal power plant to allow its rotor speed to vary suddenly in response to a disruption in the line? Was it that this governor did not function properly when this incident took place?
The CEB management should be faulted for not making available to the maintenance personnel proper maintenance manuals. It was alleged that even for the Norochcholai coal plant, the manufacturer never made available to CEB the operation manuals in English. That may be the reason for having Chinese technicians to attend to O&M functions even today. It seems that during the last 6-7 years since commissioning the plant, CEB personnel have not been able to learn the O&M functions from the
Chinese technicians. Though, the CEB staff at Norochcholai are unable to handle the O&M functions of the coal power plant by themselves, Sri Lankan personnel are managing three combined cycle power plants, two at Kelanitissa and one at Kerawalapitiya. This is one more reason why Sri Lanka should not build any more coal power plants.
RECOMMENDATIONS OF
THE REPORT
Among the recommendations made by the Committee are the following among others:
The committee strongly recommends a standard compliant, systematic, foolproof, safe procedures and maintenance protocols to be instated in the CEB during operation and maintenance (O&M). The implementation of these procedures will have to be continuously monitored and supervised by adequately qualified, professionally trained, knowledgeable, experienced and skilled personnel. The committee would like to propose a performance evaluating annual appraisal system which will help to improve the above attributes of the CEB staff.
The committee understands that there is no Operations & Maintenance related risk management mechanism in place. Therefore, it is recommended to establish a risk management mechanism in order to determine the proper mix of preventive measures, mitigation levels, shift or retention of risks and consequent level of robustness of Operations & Maintenance protocols that would indicate the positive impact on the overall system
The committee strongly recommends to implement the 2018-2037 CEB Long Term Generation Expansion Plan, as given in the plan, which clearly specifies the correct blend of technologies for the future requirements of the Sri Lankan power system to improve the system stability and reliability.
The committee recommends to review the existing protection strategy for frequency instability.
2018-2037 LONG-TERM GENERATION
EXPANSION PLAN
The first two recommendations are in order. One would expect that an organization like the CEB has already following proper standard procedures for O&M. But if they are lacking, priority needs to be given for the training of staff adequately. It has been alleged in the media that all foreign training programmes are given to engineering staff while the middle level technical staff who actually carry out the O&M work are given only local training. Perhaps, there is a case here and if it is true, it should be rectified.
Since the Committee has made a strong recommendation that the CEB’s 2018-2037 Long-Term Generation Plan be implemented, it is necessary to examine what this plan is. The CEB prepares biennially a long-term generation expansion (LTGE) plan outlining the least cost options of generation plants that need to be added to the system annually for the next 20 years to meet the forecasted demand. The latest plan is in respect of the period 2020 – 2039 but it is still in the draft form yet to be approved by the PUCSL as required by Sri Lanka Electricity Act No. 31 of 2013.
The CEB 2018-2037 LTGE Plan released in June 2018 provided for adding 2,700 MW of coal power capacity between 2023 and 2035 and 1,500 MW of natural gas capacity between 2019 and 2036, along with several gas turbines and diesel power plants as well as a large number of small renewable energy plants comprising mini-hydro, solar, wind and biomass systems, under Base Case scenario. However, the PUCSL did not approve this plan but recommended an alternative plan incorporating natural gas power plants in place of coal power plants included in the CEB Plan.
The CEB refused to accept this recommendation, particularly with objections raised by its Engineers’ Union (EU), and the dispute between the PUCSL and the CEB kept dragging for over a year, and the matter was finally referred to the President who gave a directive to the PUCSL to approve the CEB Plan, fearing disruption to the power supply in the country after the CEB EU threatened to resort to industrial action if their demand for coal power plants is not acceded to. This is something not expected from a body of professionals and unheard in other countries.
Also, the LTGE Plan is highly flawed. It is supposed to determine which power technology will be the cheapest in 20 years hence based on current prices. With the cost of generation depending on plant capital cost and fuel prices both of which could vary widely within a span of 20 years, it is futile to make forecasts now as to which technology is the cheapest in 20 years hence and to adopt it. Although the CEB 2018-2037 Plan has recommended building 2,700 MW of coal power plants on grounds that coal power is the cheapest option, a report by World Bank Group study on Sri Lanka Energy Infrastructure Sector Assessment Programme (InfraSAP) released in February 2019, says in p. 18 that “coal ceases to be the least cost source of power generation, as cost of power from LNG and NCRE could potentially be lower than US cents 9 / kWh” which is the estimated coal power price.
It is therefore obvious that the 2018-2037 Plan is not a plan approved after considering engineering and economic aspects properly but approved on political grounds. Hence, the Committee’s strong recommendation to implement such a flawed plan is an attempt to take the power sector development in the country along a wrong path. It is not surprising that the Committee has made such a biased recommendation when two senior officials from the Ministry and one from the CEB are in the Committee. In any case, building more coal power plants is not a solution to a possible blackout in the future. This is the second attempt when the Ministry tried to get building of coal power plants inserted into a policy document on the sly. The first attempt was when the Cabinet took a decision on post-Covid activities to be undertaken urgently in view of the “emergency” situation in the country, building a 300 MW coal power plant at Norochcholai was inserted as one activity in the Cabinet decision.
It is also mentioned that the implementation of the CEB 2018-2037 Plan with more coal power plants is recommended to improve the system stability and reliability in the future. The Committee has not justified that the system stability and reliability would be better with coal power plants than with natural gas power plants for the Committee to make such a statement. However, it was shown in this instant that it was the instability of rotor speed of the coal power plants resulting in raising the frequency suddenly that caused the three coal power plants to trip. Hence having more coal power plants will not be of any help to maintain the stability of the system. On the contrary, it will make it worse.
Further, it is noted that with a coal power plant once shut down, it is necessary to wait several days until it cools down before it can be re-started. On the other hand, with a natural gas operated combined cycle power plant, there is no such delay and the plant can be energized within a few hours.
RECOMMENDATION VIOLATING THE
PRESIDENT’S POLICY
In the President’s policy document, “Vistas of prosperity and splendour”, he says “We also anticipate that hydro and renewable energy together would account for 80% of the overall energy mix by 2030”. The State Minister for Renewable Energy said during his assumption of duties that the Ministry’s target is to use renewable energy resources to generate at least 80% of the total generation of electricity by 2030. The Power Minister has also made a statement to that effect in the Parliament. However, it is not possible to achieve this target if the CEB 2028-2037 Plan is implemented.
The LTGE Plan has worked out the average generation from each plant type annually and the values obtained for 2030 are given in Table 1, extracted from the data given in Annexes 7.4 of 2018-2037 LTGE Plan. It is to be noted that it is not possible to forecast exact values for generation from each category in the future because it depends on many extraneous factors, such as rainfall, cloud cover, wind regime, fuel prices and demand which are not known accurately in advance. Annex 7.4 gives average values after considering several scenarios.
It is seen that according to the CEB’s LTGE Plan for 2018-37, generation from renewable sources could reach only 36% by 2030, which is far below the 80% target given in President’s VPS Policy Document, assuming what is intended by “total energy” appearing in this document is total electricity generation.
Therefore, the Committee’s strong recommendation that the CEB’s 2018-2037 Plan be implemented is a gross violation of the President’s Policy. It is surprising that a learned Committee including several officials in the Ministry, are not aware of the President’s policy. The Power Minster should call for explanations from the Committee Members why they overlooked the President’s Policy when they made their recommendation.
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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