Features
THE END OF A CORPORATE GIANT
THE STORY OF WALKER SONS & CO LTD
by HUGH KARUNANAYAKE
THE EARLY YEARS
The firm known as Walker Sons and Co was Ceylon’s major engineering firm for over 175 years. The founder of the firm, John Walker, was born on August 24, 1819 in Doune, Scotland, the seventh child of James Walker, a cobbler, and his wife Charistina (nee Strang). He attended school in Deanston and was thereafter apprenticed in the engineering shop of Deanston Cotton Mill operated by James Finlay and Co.
In 1842 he travelled to Ceylon to work as an engineer for Wilson, Ritchie and Co. which owned the Hulftsdorf Mills and which revolutionized coconut oil production through the invention patented by David Wilson. John Walker thereafter worked in a number of firms in Ceylon before returning to Scotland in 1854.In Scotland he met William Turner an engineer who he had known in Ceylon, and who encouraged him to return to Ceylon to work in Turner’s engineering business in Kandy.
Walker arrived in Ceylon in 1854 and established his own engineering firm John Walker and Co at Trincomalee Street in Kandy, manufacturing machinery for the country’s rapidly developing coffee industry. The invention of a disc pulping machine patented in 1860 saw machinery exports to other coffee producing countries like Java, Southern India, and Brazil.
In a letter written by John Walker to his brother William in Glasgow in circa 1856 he stated that the buildings owned by the nascent company may be valued at £400 sterling. “The motive power is the Malabar cooly, as we have not enough water for the blacksmiths troughs, and fuel is expensive! Our customers are 300 planters scattered over the Central Province. As a class I would call them good customers, but some are are very long in paying”. In 1854 William became the buying agent for his brother John, and they established themselves in Glasgow under the name Walker Brothers.
In 1862 William joined John as a partner and by 1870 the company had opened branches in Badulla, and Haldumulla, and by1873 branches in Dickoya and Dimbulla. In 1873 Walker founded a new company Walker and Greig to supply machinery to the new tea plantations. In 1880 the company manufactured the first tea rolling machine. Walker brothers based their headquarters in Kandy, and thrived during the coffee boom, but as early as in 1864 the company contemplated moving to Colombo and leased out premises which however were never occupied.
With the construction of the South West breakwater in the Colombo harbour, in the 1870s, shipping out of, and into Colombo was the favoured option. The Company first leased out the premises known as “the Corner” at the corner of York Street and Main Street in 1881 and it moved its headquarters and workshops there. The premises were later acquired by the Company and in later years during the twentieth century housed its head offices, and show rooms there, while the workshops including the foundry, and dockyard were constructed on 15 acres of land in Mutwal leased out from the government for 99 years in 1912.
At a dinner given in London by the Ceylon Association in London in honour of the then Governor designate of Ceylon Sir Hugh Clifford, G.C.M.G.,C.B.E., Mr JL Loudon Shand who presided gave an interesting review of the planting history of Ceylon, and in the course of his speech made the following remarks:
“There are many other things that we planters have to be thankful for among others, is the Engineering genius which has attended all our efforts in Ceylon. Wherever we have foremost in coffee, tea, and rubber it is in invention and in having the highest Engineering enterprise at our disposal, and I am glad to see here tonight, representatives of the firm of Messrs Walker Sons and Company, who have done so much for us in Ceylon”.
John Walker retired at the age of 60 after steering the company for over 30 years, but continued as head of Walker and Greig. Walker Sons was thereafter headed by his brother William who became Senior Partner. John Walker died in Scotland in 1888 and his son John came out to Ceylon to take over the running of the company. In 1891 the firm was incorporated as a limited liability company by the name Walker Sons and Company Ltd and registered on the London Stock Exchange
EXPANSION- NEW AGENCIES
Walker Sons and Co grew to be one of the earliest corporate giants in Sri Lanka, having dominated the country’s engineering sphere for almost two centuries. It was arguably the company which had the greatest impact on the economic development of Ceylon up to the 20th Century. It was to play a dominant role in the transformation of the country’s economy from a peasant based one to a more export oriented plantation economy a process which was well in hand by the end of the 19th Century.
The company prospered and expanded during the first half of the twentieth Century having being appointed as sole agents in Ceylon for much sought after British made engineering products and services. Those agencies included Austin Motor Vehicles, Otis elevators , Carrier air conditioning, Formica products, Lucas batteries and Crittall windows. The first passenger lift in Ceylon was installed by Walkers Sons in the Galle Face Hotel in 1911. Likewise the first electric fans in Ceylon were installed by Walkers in the Bristol Hotel in the 1890s. Among its engineering services were Power installation, Oil engines for tea and rubber factories, a foundry with capacity for castings up to 10 tons in weight, a machine shop served with a 15 ton electric travelling crane, a heavy machine shop with electrically driven overhead cranes, a blacksmith’s shop, and a machinery repair shop, all based in the Mutwal facility.
MOTOR ENGINEERING
Walkers have been associated with the growth and expansion of the automotive sector in Ceylon more than any other institution in the country. The first motor car was imported to Ceylon in 1902, and in the very same year Walkers imported its first motor car, the “Locomobile” Thereafter it held the agency for Austin cars, and lorries, which were predominant in the nations fleet of motor vehicles. It was also the agent for Lucas batteries. The company acquired a two acre property in Galle Road Kollupitiya to serve exclusively as a motor service centre. The branch in Kandy as well as other branches of the company in Talawakelle, Ratnapura, Bandarawela, and Galle also were equipped with motor repair and service facilities.
MARINE ENGINEERING
Sri Lanka being an island with many bays around its shores, some of which were used as harbours for a range of shipping craft, would have been an ideal location for a regional maritime service hub, but somehow only Walker Sons rose to the challenge. The graving dock constructed by the company together with the adjacent nine acres of land comprised the Colombo Iron Works, known popularly as CIW which became the nerve center for all of the company’s engineering enterprise. The slipway of the company with a cradle 120 ft long was suitable for repair and maintenance work of craft. The company owned two ships the Lady McCallum and Lady Blake which operated around the shores of Ceylon were both commissioned by Walkers.
During the early 20th Century. In September 1926, the company launched the oil barge ” Mahaweli” built and powered to suit special requirements. During the Second World War the firm repaired and refitted 167 major warships, 322 minor warships and 1,932 merchant vessels, including the aircraft carrier HMS Eagle, cruiser HMS Cornwall, HMS Cumberland, HMS Devonshire, HMS Gloucester, HMS Kent, HMS Manchester HMS Liverpool, and cruise liners RMS Queen Elizabeth and RMS Queen Mary.
BUILDINGS
The metropolis of Colombo had as its nucleus the Fort of Colombo first built by the Portuguese, further fortified by the Dutch and British till the fortifications were removed in the late 19 th century. The area encompassed by the Fort continued to serve as the centre for commercial activity in the island and the emerging banking and finance sector. The many departmental stores, hotels, restaurants, and banks all came into existence during the nineteenth and twentieth centuries. Most of the buildings in the Fort are of unique Victorian design and architecture representing the lifestyles of a bygone era. Almost all the 19th/20 th Century buildings within the Fort were designed and constructed by Walkers.
Buildings constructed by Walkers during the late 19th century include; the Galle Face Hotel, Australia Building, the Victoria Building, the P& O Offices, the National Bank of India Ltd, the Kandy Post Office, Messrs Cargills Ltd, Whiteaway Laidlaw and Co, Millers Ltd, The Scots Kirk
During the first half of the 20th Century the company built the Hongkong and Shanghai Bank, Imperial Bank of India, National Bank of India, the McKinnon McKenzie block, the new Customs House, the Grand Stand Ceylon Turf Club, the new Observer office, the Times of Ceylon building, the YMCA building, the new hostel for YMCA, the Soldiers and Sailors Institute, the Elphinstone Theatre, Pettah Police Barracks, St Bridgets Convent, etc etc. It could be said without fear of contradiction, that most of the significant buildings in the Fort including the 16 storied Ceylinco Building built in 1957 were all constructed by Walkers.
STAFFING
During the 1950s when the company was at its peak, with its workshops in Colombo in full gear meeting the nation’s demand for engineering goods and services, it had a skilled and semi skilled labour force of about 4,000 workers in Colombo and in the Branch establishments. Office staff included some 50 covenanted staff (Senior Executives), 120 Junior Executives; clerical and other office staff of about 500., possibly the largest for any single company in the island. During the 1950s, the Chairman of the parent company in London was Mr Osborne Walker, while the Ceylon operations were controlled by Mr E A Badman.
Most of the Senior Executives were Britishers, but feeling the need for Ceylonisation after Independence was granted to the country in 1948,Mr Badman recruited Ceylonese with outstanding sporting records and a good secondary education as Executives. Most of them were men who were educated at Royal College in Colombo and included Vivian de Kretser who captained the Royal College cricket team in 1945, Mahes Rodrigo who captained the Royal cricket team in 1946, Ashroff Cader who Captained the Royal rugby fifteen in 1949, Lucien de Zoysa who played in the Royal cricket team in 1935/36, and C. Ivers Gunasekera who played cricket for Royal in 1937/36/39.
REVERSAL OF FORTUNES
While it is difficult to pinpoint the source of the decline of the company’s fortunes, given that the history of its finances are not available now, it may not be unreasonable to surmise that the rot began in the early 1960s when the first signs of exchange controls and import restrictions appeared. That, despite the fact that the previous decade saw unrestricted imports following the Korean boom which sent rubber and tea prices spiralling upwards. The country enjoyed the benefits of that boon as did Walkers, but it failed to conserve and consolidate thus exposing itself to future vulnerabilities in the foreign exchange sector.
Walkers was a company largely dependant on imports and import based production and the first restrictions on imports imposed in 1961 saw a total ban on car and other imports which were ‘bread and butter’ lines for the company. Another very significant factor especially when gradual relaxation of controls took place in later years, was the emergence of suppliers from non traditional sources into the national imports basket. Post 1960 imports saw a significant drop in imports from the traditional British suppliers, and a diversification of import sources.
Countries like Japan, Korea, and non British Europe began to assume dominant positions. This was true even in Great Britain, where the domestic market was flooded with imports from the emerging nations of the Far East with access to superior production technologies inspired from the USA. Walkers however, despite these pressures had a reasonable foothold in the estate engineering sector, and also rose up to the challenges by diversification into areas such as fibre glass boat production, and making inroads into the tourism and hospitality sectors.
To add another unexpected blow to the company’s fortunes, the Government of the day in 1971 chose to compulsorily acquire its Head Office buildings in Prince Street, Fort paying the company a meagre Rs 700,000 as compensation. The building was acquired to house the State Pharmaceutical Corporation whose necessity to be located within the Fort was a question that went a begging, but never answered. Matters were compounded by the departure of the last of the Walker family, AC (Johnny ) Walker who handed over the company to Mackwoods Ltd, who were appointed Managing Agents for the Company for a stipulated period.
The attempt to restore financial stability by Mackwoods by selling off some prime real estate of the company was met with some opposition by the work force. The work force went on strike for several months bringing on more financial burdens to the company. In the mid 1970s George Steuart and Co were appointed managing agents for Walkers for three years.. Its Directors Trevor Moy, Scott Direckze, and Trevor Rosemale-Cocq, were appointed working Directors, and the company reached a degree of stability. George Steuarts however declined the opportunity to renew the agreement for a further three years.
In 1978, a new government liberalised import export trading and the possibility of a reversal of fortunes were envisaged by foreign investors looking for healthy returns on investment. The Anglo-Indonesian Corporation part of the Sime Darby Group, headed by John Nightingale, and Charles Berry negotiated successfully with the Walker family who relinquished their controlling interest in the company.
In around 1980 the controlling interest of the company was purchased by the Indian conglomerate the Tata Group which nominated two working directors to manage the company. They both resided in the Hotel Oberoi from where they made their daily visits to the different operations of the company. Kapila Heavy Equipment purchased the company in 1990. In 2009 a Malaysian based company MTD Capital Berhad purchased the Company which now goes as MTD Walkers PLC
While the Company has relinquished its role as a strategic component of plantation development in sri Lanka, and also in its key position in marine engineering, it has since stabilised itself as a major construction company focussing on infrastructure development. It is the market leader in pile driving operations and continues to sustain and maintain the nearly two century old traditions of Walker Sons and Co.
To conclude, it may be appropriate to quote William Walker the Founding Partner of the firm when he visited Ceylon in 1886.” I desire as much to be your friend as your master. I think that the firm with which I have been connected for so long as its head has done good work for Ceylon. We have brought works to the island that were never brought before. We also have paid large amounts in wages every month to the Sinhalese and Tamil workmen. But we think we can go on a step further and do better.
‘’The first thing I will try to do for you will be to afford you medical aid in times of sickness. I wish also that some provision be made for anyone who meets with any accident or in case of protracted illness. The next thing I wish is that something be provided for our men when old age comes on and you are not able to work. If this is carried out, no old and steady worker in the Company’s service will ever have to apply to the Friend in Need Society. (“Ref: Pioneers of Ceylon, Life of William Walker.Bedford publishing Co, Bedford 1897)
The above shows that the founding partners of the firm were inspired to expand its activities but also showed benevolence to is workforce- a sure formula for success.
(The writer worked on the Covenanted staff of Walker Sons And Co as Market Research Manager for five years in the mid 1970s)
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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