Rewarded for good job done at SLT by being fired, and musical chairs with Arjuna Mahendran

(Excerpted from the autobiography of Lalith de Mel)

Lalith de Mel has published facsimiles of two letter he had received from Shuhei Anan, the CEO of Sri Lanka Telecom, who was the nominee of NTT, the Japanese partner of the company, which he says is a “good summary” of what he had achieved at SLT and a second from Mr. J. Charitha Ratwatte, the new Secretary to the Treasury following the change of government which de Mel has acidly described as his reward for a job well done: getting fired.

These two letters are reproduced below:

Musical chairs with Arjuna Mahendran

“The President wanted me to take over as Chairman of the Board of Investment. This is an appointment that is made by the President. Thilan Wijesinghe had done well at the BOI. He had sustained a good image for it. It was seen as an important institution and being Chairman was a prestigious appointment. There was nothing radically wrong at the BOI and there was no need to take any urgent remedial measures.

It was a Government institution, and the staff were all Government servants, governed by the usual AR and FR regulations, and like all Government institutions, ran at its own pace. With the war with LTTE going on, it was difficult to entice foreign investment. It never came in a flood, and it was a hard task to keep a steady trickle of foreign investment coming in.

The biggest challenge was to live up to the expectations of current and new investors who viewed the BOI as a one-stop-shop that would meet all their needs. It had certain powers to approve foreign investment and ownership and grant tax holidays and work permits for foreign employees. That was the easy part of the BOI role. That was done promptly without delays.

What was difficult was to take investors rapidly through the obstacle course of getting approval the custodians of the various acts that had been designed to protect national assets. We have acts drafted by clever people to protect everything, environment, forests, antiquities, the coast, low-lying land, wildlife, coconut land, etc. Any new venture had to get a myriad approvals from people in no hurry to grant them and the only lubricant that expedited it was probably money.

There was anger and discontent that the BOI did not wave a wand and give them instant approval. Not even the President could do that, as the criteria for approval had to be met, and this was decided by the officials operating in slow-motion mode.

The concept of creating a one-stop-shop for foreign investment is still bandied around by politicians, but it can never be achieved until there is a radical revision of all acts to provide for mandatory approval within a specified time-frame if a number of boxes can be ticked by the applicant.

Published below is De Mel’s letter of appointment as Chairman/Director General of the Board of Investment:

Making room for Arjuna Mahendran

My role here also came to an end when Ranil Wickremesinghe became Prime Minister. He wanted to appoint Arjuna Mahendran as Chairman of BOI. Yes, the same now famous Arjuna Mahendran.

Arjuna Mahendran did not appreciate that his friend the Prime Minister could not make the appointment as it was an appointment that had to be made by the President. Before that had happened he stomped into my office at the BOI and rather pompously said: ‘I am the new Chairman of the BOI’

Second innings at the BOI

When the UNP lost the elections, CBK wanted me to return to the BOI for an important reason and I was duly appointed by her. It gave me some pleasure to walk into Arjuna Mahendran’s office at BOI and to tell him I was the new Chairman of BOI.

The SLFP had won the election in a coalition with the JVP, and the Cabinet had JVP ministers. My task was to convince the business community and importantly the foreign community that there would be no change in the economic philosophy of the Government and that it would remain committed to a free enterprise system.

Before accepting this task I insisted on meeting the JVP leaders to be sure that they accepted this position. I had meetings with Somawansa Amarasinghe, the Head of the JVP, Tilvin Silva and Wimal Weerawansa. The model that was developed and which they were prepared to accept was a private enterprise system that would not be expanded and where education, health, power, water, etc. that were in the State sector would continue to be in the State sector.

They remained faithful to what was agreed and during their tenure in Government never made demands for the State to take over any part of the private sector. I was relieved as what I had told the ambassadors and other foreign dignitaries was never contradicted.

My Minister was Anura Bandaranaike. He was a charming and intelligent person. He never came to the BOI office and I had to visit him periodically at his residence in Rosemead Place. It was then an interesting chat about books, plays and films and at the end he would ask whether everything was okay at BOI and I would reassure him that it was and leave him content that there was no cause for worry.

I had a meddling Board. They wanted me to remove some good people appointed during the previous UNP regime. I refused and did not do so, but it was tedious jousting with a Board pursuing their own agenda. I told the President that I had done the job for which I was appointed, namely to explain the JVP role in the Government. I also said that I could do something far more useful in my role as the Senior Advisor to the Ministry of Finance, and that I would therefore resign from my role as Chairman.

Making projects work, implementation of foreign aid-funded projects

“The major infrastructure projects were mostly funded by donors. Progress was slow and stuttering and the donors were not happy with progress. The Government was also concerned that key infrastructure projects were way behind schedule. The President was aware and concerned and it was her idea to set up a special unit to help to facilitate the implementation of projects. I was asked to head a new Project Implementation Unit. The Cabinet paper on the subject sets it all out clearly and is reproduced below.

Getting information

I was appalled to discover that there was no good information on progress and no monitoring unit. To monitor anything, information is essential and this was the key piece missing. That was my top priority. The software was developed quickly, the servers were obtained, we had a new monitoring system and we were up and running in no time.

We ran a quick course on project management for the Project Directors and also gave them very specific instructions on their role in the new system. The Project Directors were required to put on the system for each project a schedule of activity with start and end dates and funds required for each phase. Every month they had to report actual performance against the plan.

The Ministers and the President could see the progress or the lack of it on the computer screens in their offices. I scrapped the old system of getting all the Project Directors to come for a monthly review meetings. With over 100 projects, these meetings were a complete shambles. They went on endlessly trying to identify the generic problems that impeded implementation.

I replaced this macro approach of looking for magic solutions to problems with a hands-on micro approach of monitoring each individual project. The system was interactive, like email. The Project Directors could communicate problems and I could send my comments or seek assistance from some ministry and the project Director was in the loop as he saw this dialogue.

I had an office at the Planning Ministry with a team of young Administrative service officers. Each of them was responsible for monitoring a group of projects. My task was to solve the problems they could not solve by themselves. I was amazed at the progress we were able to make and have it all running smoothly by putting a few simple pieces in place.