Features
The history of the 1962 oil takeover by the Sirima B government
by Charitha. P. de Silva
(This piece has been excerpted from business leader Charitha. P. de Silva’s Memoirs published in 2018 in the context of the impending Trincomalee Oil Tank Farm deal which is today a hotly discussed topic. De Silva who retired as Chairman of Aitken Spence in a professional accountant who began his post qualification working life at Caltex, one of the three multinational oil giants running the petroleum import and distribution business in then Ceylon nationalized in 1962 by the Sirima Bandaranaike government.)
To get back to my Caltex days: danger was looming for us in the form of the powerful Leftist group in Mrs Bandaranaike’s cabinet. Minister T.B. Ilangeratne and two leftist officials, Sam Silva (Civil Servant) and G.V.S. de Silva (brilliant economist and a former classmate of mine at Royal) had convinced Mrs B that it was very much in the interests of the country to nationalise the Oil Industry that was run by three foreign oil companies, Shell, Esso and Caltex.
GVS and Co. had been publishing articles showing how much foreign exchange would be saved if Sri Lanka imported crude from sources such as Russia and refined it herself. I saw very clearly that the writing was on the wall, and tried to persuade my Managing Director, Harry Bernard, to allow me to refute some of the fallacious arguments that GVS and Co were putting forward.
Bernard was a very cautious, mild man and was loath to write anything that might antagonize the government. In this frustrating situation our Intelligence man, Douglas Kelly (former senior policeman) informed us on a Monday that a gazette was already printed to take over the Caltex Oil Installation at Bloemendhal on the Friday!
I walked into Bernard’s room and asked him “Harry, can I write something now?” Deeply depressed he told me to go ahead and write whatever I wanted. I immediately sat down and wrote a strong article refuting many of the claims made by GVS. I pointed out, among other things, that in trying to save about Rs 14 million per annum by expropriating Oil company assets and nationalizing the Oil Industry the Government was running the risk of enraging America thereby jeopardizing a Rs 140 million tea market to the US. I also pointed out that the oil companies were giving the consumers of the country a very good service through their competition and concentration on quality and service. All this would be lost when a Government monopoly took over.
Bernard read the article, blanched, and asked me to go across to Shell (they were on the first floor of the Chartered Bank building, and we were on the third) and show it to Blarney, the boss of Shell, the leader of the oil oligopoly with 60% of the market. As the article would be under Bernard’s name Harry was understandably nervous.
I walked across to Blarney’s office and showed him the article. He read it with close attention. At one point a smile stole across his face. Mrs B had gone to great pains to point out that it was not her intention to get rid of the Oil Companies from the local scene. All she wanted to do was to bring down the cost of imports by taking advantage of an attractive offer made by Russia.
She could not understand why we could not reduce the cost of our imports. She did not realize that the market in the entire Indian subcontinent would be affected if the price to Sri Lanka was reduced; and our imports were miniscule comapared to India’s and Pakistan’s who would all be compelled to fall in line. In the body of my article I had written “For Mrs B to say that it was not her intention to get rid of the oil companies but only to reduce the cost of oil imports is like cutting a ladder from under a man’s feet and claiming that the intention is not to bring him down but to collect some firewood!”
Blarney totally approved of the article (he must have been relieved that it was to be signed by Bernard and not himself) and urged me to walk 50 yards down the street to the office of Mason, the MD of Esso, and show it to him. I did so, and found to my delight that Mason was so thrilled with it that he provided me with an office and stationery, and insisted that I write an article for him too!
I did so, and thus it came about that both articles appeared on the centre page of the Ceylon Daily News (CDN) on Wednesday, Cabinet day. For information on what happened thereafter I am indebted to my cousin Percy Peiris, who was Cabinet Secretary at the time and told me the story some years after he had retired by which time the question of the confidentiality of cabinet discussions was no longer important.
Mrs B had stormed into the Cabinet Office waving the CDN in her hand. She had screamed at Ilangeratne “TB, what are you trying to do? Are you trying to bring our Government down? This whole plan of taking over the Caltex Terminal is Phillip’s idea (Phillip being her political enemy, Phillip Gunawardena, who was a dyed-in-the-wool Marxist). GVS de Silva and Sam Silva are his men. Get rid of them within a month. And stop the takeover of the Caltex plant.”
History will record that the gazette was canceled and Caltex was saved for the nonce. From this extraordinary experience I learnt a lesson that I never forgot. It is vital that when an injustice or wrong is threatened, good men must stand up and fight against it, as Burke pointed out in the 18th Century. Also, the one thing that Governments fear is the written word -particularly in their own newspaper!
There is a curious footnote to this affair. GVS who was one of the key thinkers behind the Nationalization visited me in my home down Maya Avenue during the early days when the Ceylon Petroleum Corporation (CPC) was being set up. He was a mild, innocuous looking, extremely clever individual who evidently had a high regard for his one-time classmate. He told me that the oil companies were doomed, and he offered me the top financial job at the CPC (when I was only a Deputy Chief Accountant at Caltex).
When I explained to him that I was by temperament a private-sector man who would never fit into the public sector he told me very earnestly, that in five years’ time there would be no private sector left in the country as every key industry would be in the hands of the Government. I remember telling him how much I appreciated his offer (I really did) but I would regretfully resign myself to my fate.
It was therefore ironic that as a direct result of my two articles he himself lost his job at the CPC. Fate works in strange ways. I wonder whether he ever realized that it was I who had written the articles that had cost him his job. No one in the private sector, and certainly none of my colleagues, were aware of it. I kept it a close secret as I had no desire to let down my Managing Director, Harry Bernard (under whose name my article was written) who was a charming man.
My next memorable experience at Caltex was after Government passed legislation to take over the assets of the oil companies. The thinkers behind the legislation drafted the law so that the companies would get very little compensation. They stipulated that compensation would be the purchase price of the assets less depreciation. They knew that the Terminal installations and service stations were well over ten years old and would have been written off in the books of account.
At Caltex I had been placed in charge of the compensation claim because the Chief Accountant, a charming Englishman called Geoffrey Gardiner was far more interested in producing plays at the Lionel Wendt (he was a producer and actor) than getting involved in the nitty-gritty of the Compensation Claim. A brilliant American called Jim Wollahan (California-Texas Oil Corporation) came down to Colombo, sized up the situation, and sat down with me to figure out our strategy.
Our first move was to visit our lawyers, Messrs Julius & Creasy, whose head was a very clever lawyer called Byrnell. Byrnell studied the relevant section together with us and told us regretfully that there was no way we could expect market value for our assets because the legislation was shrewdly drafted to prevent it. It would be “purchase price less depreciation” even though they had as a sop to international opinion added a proviso that “if purchase price was not determinable” it would be market value. They knew full well that oil company accounting would be so meticulous that every purchase would be correctly recorded.
Wollahan and I returned crestfallen and deeply disappointed to my office and thrashed the matter out from every angle. After a couple of hours of the most intensive devil’s advocacy on the part of both of us, Wollahan suddenly cried out “Chari, it will be market value!”. His point was that we did not know the purchase price of our installations and service stations. We had not purchased them from anyone. We had built them. It was a brilliant concept that was later confirmed as legally sound by H.V. Perera QC, the last word on law in Sri Lanka.
I was entrusted the task of writing the Memorandum on “Why Purchase Price was not determinable”. Once the basis of compensation became market value, we included Goodwill in our Claim because Market Value was the price that a willing buyer (say Phillips Petroleum) would pay a willing seller, and that would certainly include Goodwill.
I was put in charge of preparing our Compensation Claim (Gardiner was delighted to be relieved of that responsibility) and did so with the help of my able assistant Bertie Casie Chetty. It ended up literally with millions of dollars more than the leftists behind the legislation had ever anticipated.
This experience taught me one of the most valuable lessons of my life. Never since that day did I accept unquestioningly the opinion of a lawyer on a matter that had business or moral implications. I tended from that day onward to make all business decisions myself and use lawyers for their expertise to prepare the legal documentation. I had always had a legal bent, and from then onward gave it full reign. The culmination of this attitude was when I sued Aitken Spence & Co Ltd in 2007 (16 years after my retirement) on the grounds of Oppression. But that is another story. (I won that case; pp. 123 to 127).
During the compilation of the Compensation Claim, in 1962, Mike Thornton of Aitken Spence sent for me. This was the second time I was interviewed by Aitken Spence for a job. The first time was when R.P. Gaddum offered me the job of accountant shortly after I had passed out as a Chartered Accountant in 1955. Thornton offered me the job of Chief Accountant.
I told him that unfortunately I was heavily involved in the Compensation Claim for Caltex and could not let them down. We parted and he wrote me a charming letter. After this experience I got Bertie Casie Chetty to sign all the documents that would be used in the case.
Meanwhile Jim Wollahan, who had developed a huge regard for me, offered me employment as an expatriate. I declined it for a number of reasons. Firstly I had no great desire to live the life of a nomad abroad, traveling from one country to another. Secondly, I knew that it was quite likely that I would be posted to some Asian country like India or Malaysia. My colleagues in those countries, who would be as well qualified as I was, would be earning much less than I did (being an expatriate). In those circumstances it was unlikely that they would cooperate whole heartedly with me, or view me with great affection.
Around 1962 the government finally took over the assets of the oil companies. The employees were offered handsome severance packages and the staff at Caltex dwindled to a skeleton. At this point, I received my third offer to join Aitken Spence where Jack Reeves had taken over from Mike Thornton, and Ron Law the Chief Accountant had given notice of resignation. I evaluated the two choices before me: either become an expatriate with Caltex or the Chief Accountant of Aitken Spence.
I had already foreseen the problems I would be faced with as an expatriate. In any case three unsolicited offers from the same company within ten years seemed too much like Fate. I therefore accepted Aitken Spence’s offer after informing Harry Bernard and Geof Gardiner of my decision. They were sad about it but very understanding. They were also generous, because despite the fact that I was employed by Aitken Spence the day after I left Caltex they paid me the full Compensation Package!
Features
Rethinking post-disaster urban planning: Lessons from Peradeniya
A recent discussion by former Environment Minister, Eng. Patali Champika Ranawaka on the Derana 360 programme has reignited an important national conversation on how Sri Lanka plans, builds and rebuilds in the face of recurring disasters.
His observations, delivered with characteristic clarity and logic, went beyond the immediate causes of recent calamities and focused sharply on long-term solutions—particularly the urgent need for smarter land use and vertical housing development.
Ranawaka’s proposal to introduce multistoried housing schemes in the Gannoruwa area, as a way of reducing pressure on environmentally sensitive and disaster-prone zones, resonated strongly with urban planners and environmentalists alike.
It also echoed ideas that have been quietly discussed within academic and conservation circles for years but rarely translated into policy.
One such voice is that of Professor Siril Wijesundara, Research Professor at the National Institute of Fundamental Studies (NIFS) and former Director General of the Royal Botanic Gardens, Peradeniya, who believes that disasters are often “less acts of nature and more outcomes of poor planning.”
“What we repeatedly see in Sri Lanka is not merely natural disasters, but planning failures,” Professor Wijesundara told The Island.
“Floods, landslides and environmental degradation are intensified because we continue to build horizontally, encroaching on wetlands, forest margins and river reservations, instead of thinking vertically and strategically.”
The former Director General notes that the University of Peradeniya itself offers a compelling case study of both the problem and the solution. The main campus, already densely built and ecologically sensitive, continues to absorb new faculties, hostels and administrative buildings, placing immense pressure on green spaces and drainage systems.
“The Peradeniya campus was designed with landscape harmony in mind,” he said. “But over time, ad-hoc construction has compromised that vision. If development continues in the same manner, the campus will lose not only its aesthetic value but also its ecological resilience.”
Professor Wijesundara supports the idea of reorganising the Rajawatte area—located away from the congested core of the university—as a future development zone. Rather than expanding inward and fragmenting remaining open spaces, he argues that Rajawatte can be planned as a well-designed extension, integrating academic, residential and service infrastructure in a controlled manner.
Crucially, he stresses that such reorganisation must go hand in hand with social responsibility, particularly towards minor staff currently living in the Rajawatte area.
“These workers are the backbone of the university. Any development plan must ensure their dignity and wellbeing,” he said. “Providing them with modern, safe and affordable multistoried housing—especially near the railway line close to the old USO premises—would be both humane and practical.”
According to Professor Wijesundara, housing complexes built near existing transport corridors would reduce daily commuting stress, minimise traffic within the campus, and free up valuable land for planned academic use.
More importantly, vertical housing would significantly reduce the university’s physical footprint.
Drawing parallels with Ranawaka’s Gannoruwa proposal, he emphasised that vertical development is no longer optional for Sri Lanka.
“We are a small island with a growing population and shrinking safe land,” he warned.
“If we continue to spread out instead of building up, disasters will become more frequent and more deadly. Vertical housing, when done properly, is environmentally sound, economically efficient and socially just.”
The veteran botanist also highlighted the often-ignored link between disaster vulnerability and the destruction of green buffers.
“Every time we clear a lowland, a wetland or a forest patch for construction, we remove nature’s shock absorbers,” he said.
“The Royal Botanic Gardens has survived floods for over a century precisely because surrounding landscapes once absorbed excess water. Urban planning must learn from such ecological wisdom.”
Professor Wijesundara believes that universities, as centres of knowledge, should lead by example.
“If an institution like Peradeniya cannot demonstrate sustainable planning, how can we expect cities to do so?” he asked. “This is an opportunity to show that development and conservation are not enemies, but partners.”
As climate-induced disasters intensify across the country, voices like his—and proposals such as those articulated by Patali Champika Ranawaka—underscore a simple but urgent truth: Sri Lanka’s future safety depends not only on disaster response, but on how and where we build today.
The challenge now lies with policymakers and planners to move beyond television studio discussions and academic warnings, and translate these ideas into concrete, people-centred action.
By Ifham Nizam ✍️
Features
Superstition – Major barrier to learning and social advancement
At the initial stage of my six-year involvement in uplifting society through skill-based initiatives, particularly by promoting handicraft work and teaching students to think creatively and independently, my efforts were partially jeopardized by deep-rooted superstition and resistance to rational learning.
Superstitions exerted a deeply adverse impact by encouraging unquestioned belief, fear, and blind conformity instead of reasoning and evidence-based understanding. In society, superstition often sustains harmful practices, social discrimination, exploitation by self-styled godmen, and resistance to scientific or social reforms, thereby weakening rational decision-making and slowing progress. When such beliefs penetrate the educational environment, students gradually lose the habit of asking “why” and “how,” accepting explanations based on fate, omens, or divine intervention rather than observation and logic.
Initially, learners became hesitant to challenge me despite my wrong interpretation of any law, less capable of evaluating information critically, and more vulnerable to misinformation and pseudoscience. As a result, genuine efforts towards social upliftment were obstructed, and the transformative power of education, which could empower individuals economically and intellectually, was weakened by fear-driven beliefs that stood in direct opposition to progress and rational thought. In many communities, illnesses are still attributed to evil spirits or curses rather than treated as medical conditions. I have witnessed educated people postponing important decisions, marriages, journeys, even hospital admissions, because an astrologer predicted an “inauspicious” time, showing how fear governs rational minds.
While teaching students science and mathematics, I have clearly observed how superstition acts as a hidden barrier to learning, critical thinking, and intellectual confidence. Many students come to the classroom already conditioned to believe that success or failure depends on luck, planetary positions, or divine favour rather than effort, practice, and understanding, which directly contradicts the scientific spirit. I have seen students hesitate to perform experiments or solve numerical problems on certain “inauspicious” days.
In mathematics, some students label themselves as “weak by birth”, which creates fear and anxiety even before attempting a problem, turning a subject of logic into a source of emotional stress. In science classes, explanations based on natural laws sometimes clash with supernatural beliefs, and students struggle to accept evidence because it challenges what they were taught at home or in society. This conflict confuses young minds and prevents them from fully trusting experimentation, data, and proof.
Worse still, superstition nurtures dependency; students wait for miracles instead of practising problem-solving, revision, and conceptual clarity. Over time, this mindset damages curiosity, reduces confidence, and limits innovation, making science and mathematics appear difficult, frightening, or irrelevant. Many science teachers themselves do not sufficiently emphasise the need to question or ignore such irrational beliefs and often remain limited to textbook facts and exam-oriented learning, leaving little space to challenge superstition directly. When teachers avoid discussing superstition, they unintentionally reinforce the idea that scientific reasoning and superstitious beliefs can coexist.
To overcome superstition and effectively impose critical thinking among students, I have inculcated the process to create a classroom culture where questioning was encouraged and fear of being “wrong” was removed. Students were taught how to think, not what to think, by consistently using the scientific method—observation, hypothesis, experimentation, evidence, and conclusion—in both science and mathematics lessons. I have deliberately challenged superstitious beliefs through simple demonstrations and hands-on experiments that allow students to see cause-and-effect relationships for themselves, helping them replace belief with proof.
Many so-called “tantrik shows” that appear supernatural can be clearly explained and exposed through basic scientific principles, making them powerful tools to fight superstition among students. For example, acts where a tantrik places a hand or tongue briefly in fire without injury rely on short contact time, moisture on the skin, or low heat transfer from alcohol-based flames rather than divine power.
“Miracles” like ash or oil repeatedly appearing from hands or idols involve concealment or simple physical and chemical tricks. When these tricks are demonstrated openly in classrooms or science programmes and followed by clear scientific explanations, students quickly realise how easily perception can be deceived and why evidence, experimentation, and critical questioning are far more reliable than blind belief.
Linking concepts to daily life, such as explaining probability to counter ideas of luck, or biology to explain illness instead of supernatural causes, makes rational explanations relatable and convincing.
Another unique example that I faced in my life is presented here. About 10 years ago, when I entered my new house but did not organise traditional rituals that many consider essential for peace and prosperity as my relatives believed that without them prosperity would be blocked. Later on, I could not utilise the entire space of my newly purchased house for earning money, largely because I chose not to perform certain rituals.
While this decision may have limited my financial gains to some extent, I do not consider it a failure in the true sense. I feel deeply satisfied that my son and daughter have received proper education and are now well settled in their employment, which, to me, is a far greater achievement than any ritual-driven expectation of wealth. My belief has always been that a house should not merely be a source of income or superstition-bound anxiety, but a space with social purpose.
Instead of rituals, I strongly feel that the unused portion of my house should be devoted to running tutorials for poor and underprivileged students, where knowledge, critical thinking, and self-reliance can be nurtured. This conviction gives me inner peace and reinforces my faith that education and service to society are more meaningful measures of success than material profit alone.
Though I have succeeded to some extent, this success has not been complete due to the persistent influence of superstition.
by Dr Debapriya Mukherjee
Former Senior Scientist
Central Pollution Control Board, India ✍️
Features
Race hate and the need to re-visit the ‘Clash of Civilizations’
Australian Prime Minister Anthony Albanese has done very well to speak-up against and outlaw race hate in the immediate aftermath of the recent cold-blooded gunning down of several civilians on Australia’s Bondi Beach. The perpetrators of the violence are believed to be ardent practitioners of religious and race hate and it is commendable that the Australian authorities have lost no time in clearly and unambiguously stating their opposition to the dastardly crimes in question.
The Australian Prime Minister is on record as stating in this connection: ‘ New laws will target those who spread hate, division and radicalization. The Home Affairs Minister will also be given new powers to cancel or refuse visas for those who spread hate and a new taskforce will be set up to ensure the education system prevents, tackles and properly responds to antisemitism.’
It is this promptness and single-mindedness to defeat race hate and other forms of identity-based animosities that are expected of democratic governments in particular world wide. For example, is Sri Lanka’s NPP government willing to follow the Australian example? To put the record straight, no past governments of Sri Lanka initiated concrete measures to stamp out the evil of race hate as well but the present Sri Lankan government which has pledged to end ethnic animosities needs to think and act vastly differently. Democratic and progressive opinion in Sri Lanka is waiting expectantly for the NPP government’ s positive response; ideally based on the Australian precedent to end race hate.
Meanwhile, it is apt to remember that inasmuch as those forces of terrorism that target white communities world wide need to be put down their counterpart forces among extremist whites need to be defeated as well. There could be no double standards on this divisive question of quashing race and religious hate, among democratic governments.
The question is invariably bound up with the matter of expeditiously and swiftly advancing democratic development in divided societies. To the extent to which a body politic is genuinely democratized, to the same degree would identity based animosities be effectively managed and even resolved once and for all. To the extent to which a society is deprived of democratic governance, correctly understood, to the same extent would it experience unmanageable identity-bred violence.
This has been Sri Lanka’s situation and generally it could be stated that it is to the degree to which Sri Lankan citizens are genuinely constitutionally empowered that the issue of race hate in their midst would prove manageable. Accordingly, democratic development is the pressing need.
While the dramatic blood-letting on Bondi Beach ought to have driven home to observers and commentators of world politics that the international community is yet to make any concrete progress in the direction of laying the basis for an end to identity-based extremism, the event should also impress on all concerned quarters that continued failure to address the matters at hand could prove fatal. The fact of the matter is that identity-based extremism is very much alive and well and that it could strike devastatingly at a time and place of its choosing.
It is yet premature for the commentator to agree with US political scientist Samuel P. Huntingdon that a ‘Clash of Civilizations’ is upon the world but events such as the Bondi Beach terror and the continuing abduction of scores of school girls by IS-related outfits, for instance, in Northern Africa are concrete evidence of the continuing pervasive presence of identity-based extremism in the global South.
As a matter of great interest it needs mentioning that the crumbling of the Cold War in the West in the early nineties of the last century and the explosive emergence of identity-based violence world wide around that time essentially impelled Huntingdon to propound the hypothesis that the world was seeing the emergence of a ‘Clash of Civilizations’. Basically, the latter phrase implied that the Cold War was replaced by a West versus militant religious fundamentalism division or polarity world wide. Instead of the USSR and its satellites, the West, led by the US, had to now do battle with religion and race-based militant extremism, particularly ‘Islamic fundamentalist violence’ .
Things, of course, came to a head in this regard when the 9/11 calamity centred in New York occurred. The event seemed to be startling proof that the world was indeed faced with a ‘Clash of Civilizations’ that was not easily resolvable. It was a case of ‘Islamic militant fundamentalism’ facing the great bulwark, so to speak, of ‘ Western Civilization’ epitomized by the US and leaving it almost helpless.
However, it was too early to write off the US’ capability to respond, although it did not do so by the best means. Instead, it replied with military interventions, for example, in Iraq and Afghanistan, which moves have only earned for the religious fundamentalists more and more recruits.
Yet, it is too early to speak in terms of a ‘Clash of Civilizations’. Such a phenomenon could be spoken of if only the entirety of the Islamic world took up arms against the West. Clearly, this is not so because the majority of the adherents of Islam are peaceably inclined and want to coexist harmoniously with the rest of the world.
However, it is not too late for the US to stop religious fundamentalism in its tracks. It, for instance, could implement concrete measures to end the blood-letting in the Middle East. Of the first importance is to end the suffering of the Palestinians by keeping a tight leash on the Israeli Right and by making good its boast of rebuilding the Gaza swiftly.
Besides, the US needs to make it a priority aim to foster democratic development worldwide in collaboration with the rest of the West. Military expenditure and the arms race should be considered of secondary importance and the process of distributing development assistance in the South brought to the forefront of its global development agenda, if there is one.
If the fire-breathing religious demagogue’s influence is to be blunted worldwide, then, it is development, understood to mean equitable growth, that needs to be fostered and consolidated by the democratic world. In other words, the priority ought to be the empowerment of individuals and communities. Nothing short of the latter measures would help in ushering a more peaceful world.
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