Features

Power sector reforms- urgent need to revisit them

Published

5 years ago

2020/09/7

by Dr Janaka Ratnasiri

The government of Sri Lanka (GoSL), in a policy decision made in 1998, expressed its commitment to power sector reforms and embarked on a programme to restructure it by unbundling the Ceylon Electricity Board (CEB) into separate companies for generation, transmission, and distribution, as reported in the ADB Report on Country Assistance Programme Evaluation: Power Sector Assistance Evaluation, August 2007. To give effect to this policy, a Bill was drafted to introduce reforms in the power sector as far back as 2002.

ELECTRICITY REFORMS ACT 28 OF 2002

The draft 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 proposed that independent companies be incorporated for the following purposes:

One company to take over the functions of the CEB relating to hydroelectricity generation and thermal electricity generation,

One company to take over the functions of the CEB relating to transmission and bulk procurement of electricity,

Three or more companies to take over the distribution of electricity, and

One or more companies to take over other functions of the CEB and LECO.

The Bill when presented to the Parliament brought in strong protests from many quarters including the 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 workers’ rights would 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 did not come into operation.

ENERGY EXPERT’S RECOMMENDATIONS FOR UNBUNDLING THE POWER SETOR

Prof. Priyantha Wijayatunga, Director of the South Asia Energy Division of Asian Development Bank (ADB) said at the launching of the Techno 2019 exhibition held in July 2019, that “Sri Lanka still needs to go a long way in relation to sector governance, compared to other countries in the region. It is time that we look at this closely so that we do not lag behind. Reforms will undoubtedly help the energy sector and hence the country’s economic development,” (Daily Mirror, 18.07.2019).

He specifically pointed out that improved governance in the energy sector in India and Bangladesh enormously helped conceptualizing and implementing clean energy initiatives, while enhancing their energy security. He highlighted the important role played by independent energy regulators and separation of functions of the energy sector in these countries, which had paved the way for breakthroughs in clean energy initiatives.

Prof. Wijayatunga elaborated “By now, a large majority of the countries, including many in the developing world around us, have fully unbundled the energy supply industry with a reasonably independent regulatory environment. If we look at South Asia, India and Bangladesh have already significantly advanced and are rapidly progressing in these areas,”. Further, he noted that “reforms also led to an increase in private sector participation in all sub sectors, including generation, distribution and even in transmission business in these countries”.

RECOMMENDATIONS OF INTERNATIONAL ORGANIZATIONS

The GoSL, from time to time, engaged the services of international institutions such as World Bank (WB), Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) to make recommendations to improve the power sector. Among the reports produced from these studies are:

JICA Master Plan Study on the Development of Power Generation and Transmission System in Sri Lanka, February 2006,

Asian Development Bank report on Assessment of Power Sector Reforms in Sri Lanka, 2015,

JICA Report on Electricity Sector Master Plan Study in Sri Lanka, March, 2018, and

World Bank Group study on Sri Lanka Energy Infrastructure Sector Assessment Programme (InfraSAP), April 2019.

The 2006 JICA report observed that “political intervention is making it impossible for the CEB to manage itself autonomously. As a result, its management has been criticized as inefficient by external parties. Moreover, it has piled up a debt big enough to jeopardize its continued sustenance. One of the areas where politics has been heavily involved is the tariff question. Thus far, political considerations have worked against attempts to raise tariffs, and tariff revisions to reflect the costs have consequently been delayed. To put a halt to political intervention in CEB management as well, it is necessary to lay down the proper conditions for corporate business. This is to be done by unbundling the current CEB, which is a vertically integrated government-owned monopoly; making the generation, transmission, and distribution divisions completely independent”. The report further recommended that “a fundamental reform of the sector is absolutely essential for promotion of long-term investment and increase in the overall efficiency. To this end, the government must present a detailed vision and schedule for CEB unbundling, and swiftly complete the reform, which is currently stalled.” But no follow up action was taken by the GoSL towards unbundling of the CEB.

The 2015 ADB report in its concluding paragraph said that “The next stage of reform requires establishing six independent companies out of the CEB’s generation, transmission, and four distribution licensees. The organization culture in the government-owned company LECO needs to be replicated in the CEB’s distribution licensees by creating corporate entities that report to the CEB holding company. The functional business units currently established within the CEB are adequately staffed and organized to enable the formation of six corporate entities. The corporatization need not involve privatization if political decision makers do not wish to involve private capital more fully in the sector, provided the state-owned firms operate as independent commercial companies”.

The ADB report further said that “The electricity sector was proposed to be restructured to ensure increased efficiency, transparency, autonomy, accountability, competition, and financial viability. The CEB functions were to be vertically and horizontally unbundled. For this purpose, the CEB owned subsidiary companies were planned to be established under the Companies Act No. 17 of 1982. The electricity sector was proposed to be restructured to ensure increased efficiency, transparency, autonomy, accountability, competition, and financial viability. The CEB functions were to be vertically and horizontally unbundled. For this purpose, CEB owned subsidiary companies were planned to be established under the Companies Act No. 17 of 1982”.

The 2018 JICA report reviewed and updated the 2006 JICA Master Plan. However, it did not refer to the issue of unbundling the power sector but recommended incorporation of renewable energy projects as well as natural gas in the energy mix for generation of electricity up to 2040 including consideration of financial commitments. It also considered the option of generation with 100% renewable energy sources by 2040, recommending that to meet the deficit of power arising out of continuing high cloud cover for several days, storage batteries need to be installed at an estimated cost of USD 1,000 million.

The 2019 World Bank report says “Apart from a few recent competitive outcomes, the country has not yet been able to develop utility scale non-conventional renewable energy (NCRE) projects at tariffs comparable with other projects globally or in the region or to tap into commercial financing and private sector participation in larger scale projects. As part of the preparation of the InfraSAP, two pre-feasibility assessments for potential large scale NCRE park sites were conducted for sites in Pooneryn and Moneragala, respectively, totaling about 500 MW of potential generation capacity”.

“The Solar and Wind power has the potential to further optimize the cost of power in the country. In line with what is being witnessed across the globe (i.e. low tariffs in solar and wind-based generation), it seems reasonable to assume that by opening the sector to international players with adequate incentives and risk mitigation mechanisms in place, a significant reduction in cost of power could be achieved in Sri Lanka. The solar and wind-based generation could be potentially used to replace some of the expensive imported oil-based power, which is currently utilized to offset the low availability of hydro resources” (p. 17).

Though the government sought the assistance from these multilateral agencies for improving the performance of the CEB, it has not taken any initiative to implement them, particularly those on reforms. The CEB is also rather slow in pursuing building of large-scale solar energy systems despite the government giving high priority for them and availability of funding from India on a credit line to the extent of USD 100 million specifically for solar energy project development (See The Island of 03.09.2020)

PRE-REQUISITES FOR UNBUNDLING OF CEB

Once the CEB is unbundled, separate companies are to be set up to take over the generation, transmission, distribution and other functions. There will be one company each for generation and transmission and three or more for distribution, according to the draft Act. However, it will be more prudent to have separate generation companies for each of the generation complexes, Kelanitissa, Laxapana, Mahaweli and others including large renewable energy plants. These companies will serve as independent power producers (IPP) and will have to sell the energy they generate to the transmission company, along with other IPPs. Electricity generated at power plants other than from small power plants, is transmitted to grid substations using 220 kV and 132 kV transmission lines.

When the available capacity exceeds the demand, the System Controller will have to decide the amount of power to be purchased from the IPPs based on a merit order system. Generally, plants providing firm output at low cost is given priority according to which power from renewable sources may get low priority. However, with the government policy to meet a minimum of 80% of generation from renewable sources, a mechanism will have to be worked out to accept power from RE sources, possibly by providing storage facilities which will even out their fluctuations.

Before selling energy, it has to be measured to an accuracy of at least ±0.1% using instrumentation which need to be type approved by the Department of Measurement Units, Standards and Services (MUSS) as required by the relevant law. Further, the instruments need to be regularly calibrated by an accredited laboratory. The CEB is already having a Meter Laboratory and this may have to be brought under the control of the transmission company with updated instrumentation serving as secondary standards with accuracy traceable to international standards. This can be verified by calibrating them against the primary standards available at MUSS Department, which is a legal requirement. Every generating unit before being connected to the grid for transmission, needs to go through the metering unit which will monitor the energy dispatched on a daily or monthly basis and transmit the data to the transmission company. It will then pay the IPP at rates agreed to in the power purchase agreement entered into between the IPP and the transmission company, based on the energy dispatched.

For distribution, the CEB has already divided the country into four regional divisions and a subsidiary company, Lanka Electric Company Ltd, covering the Western coastal townships from Negombo to Galle, excluding the city of Colombo. Electricity distribution from 220 kV/132 kV grid substations to the rest of the country is carried out using 33 kV lines which are again converted to 11 kV at load centres for local distribution. The 33 kV or 11 kV line voltage is again converted into 230/400 V for supplying to consumers. Currently, one 33 kV line may extend across two division boundaries, but if these two divisions are to be set up as two independent companies, there has to be separate distribution lines, each covering only one division receiving electricity from one or more GSSs located within the division. It will be then possible to measure the amount of energy transferred to this particular distribution company separately. Hence, certain amount or modifying the distribution system may have to be undertaken prior to unbundling.

FINANCIAL VIABILITY OF CEB

The CEB has been selling electricity to most of its consumers below cost price which is around Rs 20 per unit. For example, the tariff for households consuming up to 90 kWh per month is only Rs. 10 per unit for the last 30 units and less for lower slabs. For industries with demand up to 42 kVA and for other industries during daytime, the tariff is below the cost price. The average cost of generation per unit of electricity in 2017 was Rs 20.40, while the average selling price per unit in 2017 was Rs. 16.26. The corresponding values for 2018 were Rs. 19.12 and Rs. 16.29, respectively. These low tariffs resulted in the CEB incurring a net loss of Rs. 47.6 billion in 2017 and Rs. 30.5 billion in 2018 (AR, 2018).

In view of these losses, the CEB has not been able to settle its dues to the Ceylon Petroleum Corporation (CPC) for supplying fuel in 2016 amounting to Rs. 12.43 billion and also to settle the payments to IPPs for supplying power which amounted to Rs. 21.52 billion in 2016, according to General Manager’s Review appearing in the 2016 Annual Report (AR). Further, the total long-term borrowings as at end of 2016 were recorded as Rs. 220.5 billion, while that for 2018 were recorded as Rs. 281.3 billion, as given in respective annual reports. This poor financial status of CEB is an impediment for it to raise any borrowings from commercial banks.

The subsidies given to low-end consumers amounted to Rs. 70 billion in 2017 and Rs. 60 billion in 2018 (AR 2018). These were partly recovered by selling to high-end consumers at above-average cost price. The surplus recovered by these means in 2017 was Rs. 15.2 billion and Rs. 20.6 billion in 2018. Had the CEB was operating as a commercial enterprise, the logical measure that would have been done was either to increase the selling price above the cost price for all consumers and also reduce the cost of generation.

Being a government organization, the tariff is determined by the government policy to provide electricity to low-income households at an affordable price and hence the CEB is constrained against raising the tariff. However, this issue needs to be carefully studied and an upward revision of the tariff should be considered, removing the subsidies at least partly. Even for industries, to make them competitive in the global market, the government policy is to supply electricity to small and medium industries at below cost, but this policy too needs to be reviewed.

There is also the possibility to reduce the cost of generation. The CEB has been generating electricity from petroleum oil to the extent between 25% – 35% with the generation in 2017 being 5,000 GWh. According to 2016 Generation Performance Report of the Public Utilities Commission of Sri Lanka (PUCSL), the cost of generation from oil-fired power plants has been between Rs/kWh 22 and Rs/kWh 38. On the other hand, the cost of generation from NG fired power plant is no more than Rs/kWh 15 as quoted in the tender for the 300 MW gas power plant to be installed at Kerawalapitiya. If the thermal power plants presently operating with diesel are converted to NG, the saving is of the order of Rs. 50 billion annually.

The Cabinet of Ministers as far back as December 2010 decided to introduce natural gas (NG) in all sectors including power and industries and authorized the Ministry of Petroleum to pursue the matter, but no action was taken either by the Ministry of Petroleum or Ministry of Power and Energy. It is hoped that with the mandate given to the Ministry of Renewable Energy to convert all oil power plants at Kelanitissa complex for operation with NG, will inspire the CEB to give priority for this conversion which will reduce the losses incurred by the CEB.

The other matter that needs to be resolved is the delay in public sector organizations not paying up their bills for electricity on time, and this has caused liquidity problems in the CEB. As a result, the CEB is unable to pay the CPC for the fuel it purchases from the CPC on time and also unable to pay the IPPs for the power it purchases from them on time. With the unbundling of the sector, this system could be improved. Every Distribution Company (DC) should collect the payments due from the consumers on time giving a grace period of say one month. The Transmission Company (TC) should collect the payments from every DC for the electricity sold to them on time and settle the payments due for each of the Generation Companies (GC) on time. The GCs could then settle the payments due for each of the IPPs for the electricity they purchase from them. With the availability of on-line banking facilities and smart metering systems, all these operations could be undertaken without human intervention, other than occasional verification.

PRESENT STATUS OF SRI LANKA’S POWER SECTOR

In 1969, the Ceylon Electricity Board (CEB) was established by an Act of Parliament for the purpose of developing and coordinating of generation, supply and distribution of electricity island-wide, taking over the functions of the Department of Electrical Undertakings. By the end of 2018, the total installed capacity has grown to 4,045 MW of comprising 1,400 MW of hydropower plants, 1,137 MW of oil power plants, 900 MW of coal power plants and 608 MW of other renewal energy plants owned by both CEB and independent power producers. The total electricity generation in 2018 was 15,300 GWh, with the per capita electricity consumption 650 kWh, which is only above the least developed countries in Asia. The forecast for generation in 2030 given in CEB’s long term generation plan is around 31,000 GWh.

In 1983, Lanka Electric Company was established as a subsidiary company of the CEB and took over the distribution of electricity in coastal townships between Negombo and Galle, which resulted in reducing the distribution losses. In 2007, the Sri Lanka Sustainable Energy Authority (SLSEA) was established with the main objective to identify, assess and develop renewable energy resources in the country. However. The SLSEA has been operating more as a regulator than as a promoter of RE projects.

It is noteworthy to compare Sri Lanka’s power sector situation with that of another Asian country, Taiwan, where the population in 2018 (23.78 million) is similar to that of Sri Lanka (21.67 million) and land area (36,200 sq. km) is almost half of Sri Lanka’s (65,610 sq. km). Taiwan’s installed capacity in 2018 was a staggering 44,600 MW comprising 13,000 MW of coal power plants, 16,000 MW of natural gas power plants and 4,500 MW of nuclear power plants, generating 275,500 GWh of electricity in 2018 giving a per capita consumption of 11,585 kWh compared to 650 kWh for Sri Lanka (Wikipedia). The rapid growth of industrialization has been the main driver of the power sector, with a GDP (nominal) per capita of USD 24,800 in 2018 compared to USD 4,100 for Sri Lanka. It will be interesting to find out how Taiwan was able to achieve such high performance in the power sector – whether superior competency and dedication of professionals or correct policies in place or strong political leadership.

LACK OF TRANSPARENCY IN SELECTING MAJOR PROJECTS

Unlike in many Asian countries, Sri Lanka has been able to provide electricity to almost 100% of households, which was made possible through funding made available through decentralized budgeting in which provision of electricity to rural villages has been given priority. While the national grid was extended to cover almost the entire island to meet the power demands of every industry, commercial establishment and household, the CEB has not been able to expand its generation capacity correspondingly.

Efforts to build a coal power plant kept dragging for over 20 years at the beginning of the mid-eighties due to the CEB’s failure to initiate a dialogue with the public and concerned parties and vacillating policies of the government. Instead of inviting bids for building a power plant meeting performance and emission specifications from reputed manufacturers internationally and selecting a plant in a transparent manner, the CEB accepted a plant based on outdated technology offered by China on credit. The plant is known to breakdown repeatedly and the CEB is compelled to retain Chinese technicians even today to attend to its maintenance. Though the CEB claims that the coal power plant generates at the lowest cost, when the cost of financing is added, the cost gets more than doubled as revealed by a study undertaken by World Bank team.

On three occasions between 2000 and 2010, Sri Lanka government announced calls for expressions of interest for building thermal power plants on BOOT basis with capacity 1,000 – 1,200 MW, but pursued none. This gives a poor image of Sri Lanka within the international power industry, as the investors have to incur heavy expenditure on site visits and making bid bonds. In one announcement, the fuel option was kept open to solid or liquid or gas and the site to be selected by the investor while in another, the fuel option was specified as coal with the site to be near Hambantota.

In 2005, India offered to build a 500 MW coal power plant at Sampur, near Trincomalee on cost-sharing basis. Negotiations between the Indian party and the CEB kept dragging for five years before the final agreement was entered into and another five years to get feasibility studies and environment impact studies completed as well as other clearances obtained. By that time, the new government had changed its policy to adopt gas power rather than coal power on environmental grounds and the project was aborted. Had the CEB not taken such a long time to finalize the terms and commenced work sooner, the plant would have been built by now. It needs to be stressed that the proposed coal power plant at Sampur was abandoned because the CEB was dragging the project for nearly 10 years. The project took so long to commence work, obviously because it had problems both technical and operational which the CEB was unable to resolve. Hence, it was best to cancel the project and consider a new project afresh.

The latest attempt to build a 300 MW gas power plant at Kerawalapitiya on BOOT basis also got dragging for nearly four years mainly because of the manner in which the project selection process was handled by the CEB. A 500-page request for proposal (RFP) was announced in November 2016 seeking unnecessary details while the more important information essential for making a decision was left out. Such detailed information would have been in order had CEB was paying for the capital expenditure. With a BOOT project, the investor will ensure that a plant worth the money would have been purchased. The CEB will only have to know the price at which energy be sold to CEB and whether the plant satisfies performance and emission specifications laid down by the CEB.

The lack of clarity in the RFP resulted in the matter taken to the courts for a ruling. Though the approval of the Cabinet has already been granted for the project and the new President has directed this project be given priority soon after he was elected, the CEB has still not finalized its acceptance. Instead, the CEB is pursuing building a 300 MW coal power plant at Norochcholai against President’s policy. Incidentally, China was allowed to build a 400 MW gas power plant along with an LNG terminal at Hambantota with no such detailed RFPs announced.

According to a SLSEA Report dated 27.03.2019, several RE projects submitted by investors that have received the approval of the SLSEA since 2016 have been held up as CEB has not agreed to sign power purchase agreements with them, citing a section of the Electricity Act. This includes 101 RE projects with total installed capacity of 3,052 MW comprising 264 MW of mini-hydro plants, 2,028 MW of solar plants, 673 MW of wind plants and 87 MW of other plants, which could generate over 7000 GWh of energy annually. This situation is shown in Fig. 2 in 2018 Annual Report where the growth of energy added from RE projects to the system shows a stagnation between 2015 and 2018, with the value for 2016 showing a drop of 200 GWh compared to other years. It appears that there was no coordination between the CEB and the SLSEA.

FLAWED LONG TERM GENERATION EXPANSION PLAN

The CEB during the last few decades has been preparing biennially a long-term generation expansion (LTGE) Plan and the mandate of the Power Ministry specifies that the sector should be developed to comply with the CEB Plan. 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. Therefore, to give a mandate to follow the CEB’s LTGE Plan which is highly flawed for the development of the sector, does not make sense. The CEB Plan for 2018-2037 recommends adding 2,700 MW of coal power plants between 2023 and 2037 under Base Case scenario saying it is the cheapest option. However, the 2019 World Bank report cited above 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.

When the CEB submitted its LTGE Plan for 2018-37 to the Public Utilities Commission of Sri Lanka (PUCSL) for approval as required by the Sri Lanka Electricity Act No. 31 of 2013, PUCSL did not approve it but proposed 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 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 Engineers’ Union threatened to resort to industrial action if their demand for coal power plants is not acceded to. This is a clear indication that Sri Lanka’s power sector is being governed not by the PUCSL nor the Ministry nor the Governing Board of the CEB, but by its trade unions. This justifies Prof. Wijayatunga’s statement that “Sri Lanka still needs to go a long way in relation to sector governance”.

CONCLUSION

The CEB ha a staff strength about 23,000 with over 1,400 professionals. It is the opinion of several international agencies that this organization be split into several organizations each responsible for different functions undertaken by the CEB, including generation, transmission and distribution. It is expected that such an unbundling process will improve the efficiency, transparency, autonomy, accountability, competition, and financial viability. The CEB has failed miserably in the recent past to increase the generation capacity to meet the growing demand with due consideration for environmental concerns even after granting Cabinet approval for many of them. It has also failed to initiate work on large renewable energy projects for several years, particularly during the last seven months even after the President’s policy of pursuing renewable energy and gas power projects was announced.

Possibly the high inertia of the CEB with its large staff prevents it from being flexible to undertake new projects in keeping with international trends and hence continues to insist on outdated technologies. Hence, it is desirable if the government initiates unbundling of the CEB urgently as recommended by reputed energy experts to make it more flexible. The unbundling will also give an opportunity for the government to get rid of dead wood after giving them a golden hand shake.

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Features

The Paradox of Trump Power: Contested Authoritarian at Home, Uncontested Bully Abroad

Published

5 hours ago

2026/01/11

Thilina Walpola

Protests and a vigil have been held in Minneapolis, Minnesota, where the shooting of Renee Nicole Good occurred on Wednesday (photo courtesy BBC)

The Trump paradox is easily explained at one level. The US President unleashes American superpower and tariff power abroad with impunity and without contestation. But he cannot exercise unconstitutional executive power including tariff power without checks and challenges within America. No American President after World War II has exercised his authority overseas so brazenly and without any congressional referral as Donald Trump is getting accustomed to doing now. And no American President in history has benefited from a pliant Congress and an equally pliant Supreme Court as has Donald Trump in his second term as president.

Yet he is not having his way in his own country the way he is bullying around the world. People are out on the streets protesting against the wannabe king. This week’s killing of 37 year old Renee Good by immigration agents in Minneapolis has brought the City to its edge five years after the police killing of George Floyd. The lower courts are checking the president relentlessly in spite of the Supreme Court, if not in defiance of it. There are cracks in the Trump’s MAGA world, disillusioned by his neglect of the economy and his costly distractions overseas. His ratings are slowly but surely falling. And in an electoral harbinger, New York has elected as its new mayor, Zoran Mamdani – a wholesale antithesis of Donald Trump you can ever find.

Outside America it is a different picture. The world is too divided and too cautious to stand up to Trump as he recklessly dismantles the very world order that his predecessors have been assiduously imposing on the world for nearly a hundred years. A few recent events dramatically illustrate the Trump paradox – his constraints at home and his freewheeling abroad.

Restive America

Two days before Christmas, the US Supreme Court delivered a rare rebuke to the Trump Administration. After a host of rulings that favoured Trump by putting on hold, without full hearing, lower court strictures against the Administration, the Supreme Court by a 6-3 majority decided to leave in place a Federal Court ruling that barred Trump from deploying National Guard troops in Chicago. Trump quietly raised the white flag and before Christmas withdrew the federal troops he had controversially deployed in Chicago, Portland and Los Angeles – all large cities run by Democrats.

But three days after the New Year, Trump airlifted the might of the US Army to encircle Venezuela’s capital Caracas and spirit away the country’s President Nicolás Maduro, and his wife Celia Flores, all the way to New York to stand trial in an American Court. What is not permissible in any American City was carried out with absolute impunity in a foreign capital. It turns out the Administration has no plan for Venezuela after taking out Maduro, other than Trump’s cavalier assertion, “We’re going to run it, essentially.” Essentially, the Trump Administration has let Maduro’s regime without Maduro to run the country but with the US in total control of Venezuela’s oil.

Next on the brazen list is Greenland, and Secretary of State Marco Rubio who manipulated Maduro’s ouster is off to Copenhagen for discussions with the Danish government over the future of Greenland, a semi-autonomous part of Denmark. Military option is not off the table if a simple real estate purchase or a treaty arrangement were to prove infeasible or too complicated. That is the American position as it is now customarily announced from the White House podium by the Administration’s Press Secretary Karolyn Leavitt, a 28 year old Catholic woman from New Hampshire, who reportedly conducts a team prayer for divine help before appearing at the lectern to lecture.

After the Supreme Court ruling and the Venezuela adventure, the third US development relevant to my argument is the shooting and killing of a 37 year old white American woman by a US Immigration and Customs Enforcement (ICE) officer in Minneapolis, at 9:30 in the morning, Wednesday, January 7^th. Immediately, the Administration went into pre-emptive attack mode calling the victim a “deranged leftist” and a “domestic terrorist,” and asserting that the ICE officer was acting in self-defense. That line and the description are contrary to what many people know of the victim, as well as what people saw and captured on their phones and cameras.

The victim, Renee Nicole Good, was a mother of three and a prize-winning poet who self-described herself a “poet, writer, wife and mom.” A newcomer to Minneapolis from Colorado, she was active in the community and was a designated “legal observer of Immigration and Customs Enforcement (ICE) activities,” to monitor interactions between ICE agents and civilian protesters that have become the norm in large immigrant cities in America. Renee Good was at the scene in her vehicle to observe ICE operations and community protesters.

In video postings that last a matter of nine seconds, two ICE officers are seen approaching Good’s vehicle and one of them trying to open her door; a bystander is heard screaming “No” as Good is seen trying to drive away; and a third ICE officer is seen standing in front of her moving vehicle, firing twice in the direction of the driver, moving to a side and firing a third time from the side. Good’s car is seen going out of control, careening and coming to a stop on a snowbank. Yet America is being bombarded with two irreconcilable narratives – one manufactured by Trump’s Administration and the other by those at the scene and everyone opposed to the regime.

It adds to the explosiveness of the situation that Good was shot and killed not far from where George Folyd was killed, also in Minneapolis, on 25^th May, 2020, choked under the knee of a heartless policeman. And within 48 hours of Good’s killing, two Americans were shot and injured by two federal immigration agents, in Portland, Oregon, on the Westcoast. Trump’s attack on immigrants and the highhanded methods used by ICE agents have become the biggest flashpoint in the political opposition to the Trump presidency. People are organizing protests in places where ICE agents are apprehending immigrants because those who are being aggressively and violently apprehended have long been neighbours, colleagues, small business owners and students in their communities.

Deportation of illegal immigrants is not something that began under Trump. It has been going on in large numbers under all recent presidents including Obama and Biden. But it has never been so cruel and vicious as it is now under Trump. He has turned it into a television spectacle and hired large number of new ICE agents who are politically prejudiced and deployed them without proper training. They raid private homes and public buildings, including schools, looking for immigrants. When faced with protesters they get into clashes rather than deescalating the situation as professional police are trained to do. There is also the fear that the Administration may want to escalate confrontations with protesters to create a pretext for declaring martial law and disrupt the midterm congressional elections in November this year.

But the momentum that Trump was enjoying when he began his second term and started imposing his executive authority, has all but vanished and all within just one year in office. By the time this piece appears in print, the Supreme Court ruling on Trump’s tariffs (expected on Friday) may be out, and if as expected the ruling goes against Trump that will be a massive body blow to the Administration. Trump will of course use a negative court ruling as the reason for all the economic woes under his presidency, but by then even more Americans would have become tired of his perpetually recycled lies and boasts.

An Obliging World

To get back to my starting argument, it is in this increasingly hostile domestic backdrop that Trump has started looking abroad to assert his power without facing any resistance. And the world is obliging. The western leaders in Europe, Canada and Australia are like the three wise monkeys who will see no evil, hear no evil and speak no evil – of anything that Trump does or fails to do. Their biggest fear is about the Trump tariffs – that if they say anything critical of Trump he will magnify the tariffs against their exports to the US. That is an understandable concern and it would be interesting to see if anything will change if the US Supreme Court were to rule against Trump and reject his tariff powers.

Outside the West, and with the exception of China, there is no other country that can stand up to Trump’s bullying and erratic wielding of power. They are also not in a position to oppose Trump and face increased tariffs on their exports to the US. Putin is in his own space and appears to be assured that Trump will not hurt him for whatever reason – and there are many of them, real and speculative. The case of the Latin American countries is different as they are part of the Western Hemisphere, where Trump believes he is monarch of all he surveys.

After more than a hundred years of despising America, many communities, not just regimes, in the region seem to be warming up to Trump. The timing of Trump’s sequestering of Venezuela is coinciding with a rising right wing wave and regime change in the region. An October opinion poll showed 53% of Latin American respondents reacting positively to a then potential US intervention in Venezuela while only 18% of US respondents were in favour of intervention. While there were condemnations by Latin American left leaders, seven Latin American countries with right wing governments gave full throated support to Trump’s ouster of Maduro.

The reasons are not difficult to see. The spread of crime induced by the commerce of cocaine has become the number one concern for most Latin Americans. The socio-religious backdrop to this is the evangelisation of Christianity at the expense of the traditional Catholic Church throughout Latin America. And taking a leaf from Trump, Latin Americans have also embraced the bogey of immigration, mainly influenced by the influx of Venezuelans fleeing in large numbers to escape the horrors of the Maduro regime.

But the current changes in Latin America are not necessarily indicative of a durable ideological shift. The traditional left’s base in the subcontinent is still robust and the recent regime changes are perhaps more due to incumbency fatigue than shifts in political orientations. The left has been in power for the greater part of this century and has not been able to provide answers to the real questions that preoccupied the people – economic affordability, crime and cocaine. It has not been electorally smart for the left to ignore the basic questions of the people and focus on grand projects for the intelligentsia. Exhibit #1 is the grand constitutional project in Chile under outgoing President Gabriel Borich, but it is not the only one. More romantic than realistic, Boric’s project titillated liberal constitutionalists the world over, but was roundly rejected by Chileans.

More importantly, and sooner than later, Trump’s intervention in Venezuela and his intended takeover of the country’s oil business will produce lasting backlashes, once the initial right wing euphoria starts subsiding. Apart from the bully force of Trump’s personality, the mastermind behind the intervention in Venezuela and policy approach towards Latin America in general, is Secretary of State Marco Rubio, the former Cuban American Senator from Florida and the principal leader of the group of Cuban neocons in the US. His ultimate objective is said to be achieving regime change in Cuba – apparently a psychological settling of scores on behalf Cuban Americans who have been dead set against Castro’s Cuba after the overthrow of their beloved Batista.

Mr. Rubio is American born and his parents had left Cuba years before Fidel Castro displaced Fulgencio Batista, but the family stories he apparently grew up hearing in Florida have been a large part of his self-acknowledged political makeup. Even so, Secretary Rubio could never have foreseen a situation such as an externally uncontested Trump presidency in which he would be able to play an exceptionally influential role in shaping American policy for Latin America. But as the old Burns’ poem rhymes, “The best-laid plans of men and mice often go awry.”

by Rajan Philips ✍️

Features

Unsuccessful attempt on President Chandrika’s life

Published

5 hours ago

2026/01/11

Thilina Walpola

Town Hall bomb scene after 1999 attempt on CBK’s life

The Presidential election campaign was drawing to a close. We had campaigned hard but everyone knew that it would be a keenly contested election. A final meeting was scheduled for Saturday December 18, 1999. It was to be held near the Town Hall in Colombo and CBK was to be the chief speaker. I was accommodated in the front row of the stage together with other party leaders.

Ratnasiri Wickremanayake, the Prime Minister, had invited me to be a speaker at his final meeting in Horana. I waited till CBK arrived, spoke briefly to her and left for Horana. I had barely reached Havelock Town when I heard the sound of a blast from near the Town Hall. It was a well planned attempt on the life of CBK by the LTTE. Suicide bombers had come into the well packed grounds with a group of supporters of a Colombo district SLFP MP. Fortunately they had been prevented from coming close to the stage by the barriers set up by the Police.

CBK had finished her speech to a packed audience and was going down the gangway from the stage to her car when the bomber had detonated his bomb killing himself, several policemen, CBKs driver and many onlookers. But for the fact that her driver had driven up to the steps, thereby interposing the steel reinforced Mercedes Benz car between the bomb and CBK she would have been torn to shreds.

When we inspected the Benz it was a mass of twisted metal like a futuristic sculpture. I forgot about Horana and immediately rushed to the general hospital where to my relief I was told that the President was alive and out of danger. Since I had experience of the bombing of the UNP group meeting in Parliament during JRJs time, I rushed to Temple Trees to find that Sunethra Bandaranaike had fortunately promptly come there and was with the children upstairs.

The Temple Trees staff congregating downstairs were wandering about in shock till the arrival of President’s Secretary Balapatabendi. I urged that we should immediately get down Anuruddha Ratwatte -the Deputy Defence Minister, who at that time was in Kandy. A problem arose because helicopters could not fly at night. He was asked to come immediately by road and he did arrive in the shortest time.

Town Hall bomb scene CBK’s

In the meanwhile I suggested that Balapatabendi should broadcast the news that CBK was alive and out of danger as we had done with JRJ after the Parliament bombing. Already news about the attack was swirling because international media was using it as “Breaking News”. Bala and I went to the TV station and as he was getting into the studio I noticed that he was dressed in a black shirt which could have given a bad message to the country. I quickly took off my shirt and exchanged it for Balas black shirt. He then spoke on camera trying to calm the country wide audience dressed in an over-sized shirt.

We went back to Temple Trees and found that the PM and other Cabinet Ministers and relatives had arrived there and were taking charge of the situation. I then went to the General Hospital to see GL Peiris and Alavi Moulana who were in a state of shock and awaiting medical attention. Alavi’s shirt was blood stained and his sons were helplessly moving around asking for immediate medical attention.

After that both sides did not campaign in the remaining few days. The whole country was in a state of shock and disbelief. To the credit of Ranil Wickremesinghe he immediately visited CBK to wish her a speedy recovery and virtually called off his campaign. The shock of the Town Hall blast was compounded when almost at the same time a bomb was set off by the LTTE in Wattala where the UNP was holding a propaganda meeting. Major General Lucky Algama who was in charge of security was killed in this blast together with several UNP supporters.

Presidential Election December 2019

The presidential election was held as scheduled. We witnessed a clear shift of the sentiments of voters towards CBK after the bombing. I went to Kandy to cast my vote early as usual at the Nugawela voting centre. Immediately after that I left for Colombo. All along the road women of all ages were gathering in great numbers to cast their votes. It became clear that a sympathy vote was in the offing, especially among women. They could empathize with CBK who had lost a father and husband and now nearly lost her own life in the cause of public service.

The election results when announced proved that our hunch was correct. The declared results were as follows;

CBK

4,312,157 Votes [51.1 Percent]

Ranil

3,602,748 Votes [42.71 Percent]

Nandana Gunatillake

[JVP] 344,173 [4.08 Percent]

CBK then took a courageous decision which unfortunately backfired on her many years on as I will describe in a succeeding chapter. In the light of possible confusion following the bombing she decided to take her oath of office as the new President immediately though she had several months more to serve in terms of her earlier mandate. Though she had a team of brilliant lawyers including H L de Silva and R K W Goonesekere to advice on constitutional matters such details were not analyzed by her political staff. She took oaths before Chief Justice Sarath Nanda Silva and on the following day left for UK for medical treatment.

(Excepted from Vol. 3 of the Sarath Amunugma autobiography) ✍️

Features

My experience in turning around the Merchant Bank of Sri Lanka (MBSL)

Published

5 hours ago

2026/01/11

Thilina Walpola

LESSONS FROM MY CAREER: SYNTHESISING MANAGEMENT THEORY WITH PRACTICE – PART 29

The last episode covered the final stages of my work as Advisor to the National Productivity Drive at the Ministry of Industrial Development. Soon after, in September 1998, I accepted the position of Managing Director of the Merchant Bank of Sri Lanka (MBSL). This chapter shares key events and lessons from my time there.

First few weeks at MBSL

The Board agreed that, for the first month, I would work only half-days, as I still had obligations I could not abandon. I was organising the International Convention on Quality Circles 1998, which attracted many foreign participants, and although we had appointed an event organiser, numerous arrangements still required my involvement. I will write more about that Convention later in these memoirs.

Those half-days turned out to be useful. They allowed me to quietly observe and understand the situation. MBSL was in worse shape than I had expected. The financial problems were visible to anyone who read the statements. The bigger crisis, however, was the staff’s morale and the rapid loss of staff members.

During the interim management period, many staff benefits had been cut, and several senior executives had already left. In the first few months, farewell gatherings became routine. It felt like rats leaving a sinking ship. And indeed, the organisation was sinking. Yet I had accepted the challenge — largely because I sensed that the Chairperson could secure government support, which she had already begun to do.

The broader environment added to the tension. The LTTE conflict was still active. Our office building, a very tall building located near the Colpetty junction, was a prime target. It had an Air Force unit with anti-aircraft guns on the rooftop one floor above he boardroom.. No one was allowed there without special permission, even though the area had originally been designed as a rooftop function space.

The first board meeting was quite hilarious because, while we were discussing important strategic issues, the upper floor was reverberating with a baila session, with boots tapping the floor keeping time. Apparently, the unit had an assurance that there would be no air strikes, and they could take a break.

My own office was spacious, but the windows were blocked because Temple Trees — the official residence of the Prime Minister — was clearly visible if not. At first, working without any outside view felt quite oppressive. Eventually, I grew accustomed to it.

Once I began full-time work in October, I carefully examined the situation with the help of my capable team. Several senior employees were not leaving for higher-paying opportunities or foreign jobs — they were committed, though uncertain about the future.

Then came investigations by the Central Bank and the Securities and Exchange Commission. Much of my time was spent responding to information requests and ensuring that all releases of information were approved. Many years previously, MBSL had unintentionally become a subsidiary of the Bank of Ceylon (BOC) when BOC’s investment arm purchased shares that pushed ownership above 50 per cent.

Hence although we were not a deposit taking institution and therefore not under the regulatory oversight of the Central Bank, we were under the Central Bank scrutiny because we were a subsidiary of the BOC. Although we were independent in operations, the customary practice was that the BOC Chairman would also chair MBSL, together with other BOC directors serving on our board. Our Chairperson, Mrs Dayani de Silva, was determined to turn MBSL around.

At that time, we operated two main divisions:

· Corporate finance, including advisory and investment banking; and

· Leasing, including trade finance.

In addition, there were the service divisions such as Human Resources, Secretarial and Finance and Accounting

Staff matters and the trade union

Morale was low. staff resisted the benefit cuts and the shift toward rules that resembled those of government departments. Signing an attendance register was particularly disliked.

I reviewed the situation carefully. Some of the removed benefits saved only trivial amounts. I reinstated those. I also installed an electronic time-card system for everyone — including myself. I announced clearly that I would clock in every day, just as they did. Naturally, the first few months were not easy.

I began holding monthly staff meetings to explain what we were doing, why we were doing it, and where we stood financially. Communication had clearly been lacking earlier, and these meetings helped rebuild trust. I also operated an “open door” policy, welcoming any employee who wished to meet me. The performance appraisal system was another issue. Instead of motivating staff, it had become a source of resentment. I suspended it for two years and asked everyone to work together as one team.

Most employees up to the Deputy Manager level were unionised, affiliated with the Ceylon Bank Employees Union (CBEU), headed by Mr M. R. Shah. The collective agreement was due, and the union presented a long list of demands — many of them impossible, given our financial state. Normally, negotiations take place between the Employers’ Federation of Ceylon (EFC) and the CBEU. The Director General of the EFC, Mr Gotabhaya Dassanayake, advised me first to build mutual confidence, especially as I had never met Mr Shah before.

I invited Mr Shah to my office. Over tea, I openly explained the crisis we were facing, our restructuring plan, and the management approach we intended to adopt. He listened carefully and asked sensible questions. We parted on friendly terms, and more importantly, with a shared understanding.

A month later, negotiations began at the EFC. To my surprise, Mr Shah began by saying that, after speaking with the new Managing Director, he understood our difficulties and accepted the direction we were taking. He then withdrew several demands on the spot. I was relieved, not because demands were dropped, but because he had recognised our sincerity and our plan. Later, Mr Dassanayake telephoned to say he had rarely seen such cooperation. In time, as restructuring succeeded, we gradually restored many benefits. That entire episode reinforced a powerful lesson: honest communication and genuine leadership build trust far faster than confrontation.

Expanding leasing

The board was deeply concerned about the leasing division. Non-performing loans were very high, and they urged me to restrict new business and focus solely on recoveries. I informed the board that management was partly to blame because the staff was pressured to meet stretch targets, and all we got were substandard leasing facilities. Targets without safeguards are never beneficial.

My thinking differed. Aggressive recovery efforts often demoralise good customers and overburden staff. In addition, the customers were already in great difficulty because they had no financial means to meet their leasing obligations. Instead, I believed we needed to build a new, healthier portfolio, while also expanding fee-based advisory work with lower risk. I had also abandoned my consultancy business when I joined MBSL, and proposed creating a new subsidiary to bring that kind of business into the bank. The board rejected it – understandably, given past failures with subsidiaries, including one in Nepal.

We decided that if our leasing operations were to grow, they needed to feel more connected to ordinary Sri Lankans. Research revealed that many people viewed us as an “English-speaking bank.” That perception alone discouraged potential customers.

So, we refreshed our leasing brand. The new logo carried the Sinhala word for “leasing,” applications were printed in Sinhala, and signboards carried both languages. Even the telephone operator’s greeting changed. Instead of the polished “Good morning, MBSL,” which sometimes intimidated Sinhala-speaking callers, we switched to “Ayubowan, MBSL.” It was friendly, respectful, and immediately accepted across all segments.

When an SME business owner comes for a lease, they have already selected the vehicle, and the decision is more based on ego than on a business requirement. We would discourage them and enlighten them that the vehicle does not match their requirements, and advise them to select a smaller one. They look unhappy, but they finally agree when presented with the maths of repayment.

We also organised short educational sessions for our customers on how to maintain vehicles, extend tyre life, the importance of the correct lubricants, and improve customer service. These simple initiatives created goodwill, strengthened customer relationships, and soon, the leasing business began to grow. At the same time, we were tough on recoveries, and some unpleasant moments included we seized a vehicle when a couple was on their honeymoon. The board, while pressuring me to recover, also constantly reminded me that no strong-arm tactics should ever be used.

Improving cash availability

Before I joined, two government institutions had agreed to provide debentures, with Treasury comfort letters. However, a condition required us to build a monthly sinking fund for repayment. To me, this made little sense. We were already short of operating cash. Locking more away would only weaken us further.

The head of finance had faithfully followed the rule. I instructed him to stop doing so and to use the funds for business expansion. When the board asked how we planned to repay the debentures, my answer was simple: growing organisations borrow when repayment comes due — that is how business operates.

We also began selling off our minority shareholdings from our share portfolio wherever possible even at a loss. The market was depressed, and those investments in shares contributed nothing to our survival. We retained only the Merchant Credit of Sri Lanka and divested the others. Gradually, liquidity improved, and operations stabilised.

The thorny bonus issue

Before my arrival, the board had approved bonuses despite the 1997 crisis. I was surprised how it happened soon after chalking up a billion rupee loss. However, just three months into my tenure, the board refused the December 1998 bonus. I found myself in a painful position. The EFC warned that withholding payment was risky because bonuses were written into appointment letters. Yet, reality was clear — we simply could not afford it.

I addressed the staff personally, explained the situation frankly, and announced the decision. The disappointment was visible everywhere. But given the circumstances, they accepted it.

There were more challenges and many more lessons still to come. In the next article, I will continue the story of how, step by step, we navigated those difficulties and rebuilt the organisation.

(The writer is a Consultant on Productivity and Japanese Management Techniques

Retired Chairman/Director of several listed and unlisted companies
Recipient of the APO Regional Award for Promoting Productivity in the Asia-Pacific Region
Recipient of the Order of the Rising Sun, Gold and Silver Rays from the Government of Japan
Email: bizex.seminarsandconsulting@gmail.com)

By Sunil G. Wijesinha ✍️