Lessons from the blast in Beirut
By Eng. Parakrama Jayasinghe
The world is shocked by the recent tremendous explosion, in Lebanon claiming the lives of some 135 people and hundreds more grievously injured – in addition to the billions of dollars’ worth of property damage. This blast, estimated to be as powerful as a Richter Scale 3.5 earthquake, has resulted in the total destruction of the Beirut harbour. This is reportedly the lifeline for the whole of Lebanon, already battered by decades of strife. The immediate impact on maintaining the day-to-day needs for the life of the citizens, as well as the long-term impact by the loss of the harbour can only be conjectured.
We, in Sri Lanka, perhaps due to the preoccupation with the general election, which no doubt has swept all other issues out of sight, have paid scant attention to this tragedy. Perhaps, the fact that only eight Sri Lankans were directly affected did not warrant much attention of the media, too.
But, it is very important to realize that this tragedy has delivered a very important, and timely, message to us in Sri Lanka.
Needless to say a commercial harbour is the epicentre of most economic activities, being the gateway for all exports as well as for essential imports. While we are fortunate to have the recently developed Hambantota Harbour, and several smaller harbours the pivotal role played by the Colombo harbour, in the above context, cannot be denied.
Therefore, the strategic importance of the Colombo harbour, behooves us to ensure its safety, at all costs, which must be paramount in planning any projects which could be of detrimental impact on this responsibility.
Under these circumstances, many Sri Lankans would not be aware of a most dangerous proposal that is on the cards, to use the Colombo harbour to anchor a Floating Storage and Regasification Unit (FSRU). This is the central facility required if we are to diversify the sources of energy for power generation, which the CEB has been touting for, ever since their attempts to expand the coal power generation was proven unviable by the PUCSL.
While the most dubious attempt to force an unsolicited proposal by a Korean Company SK with the blessings of the former President with the same intent of siting the FSRU in the Colombo Port seems to have been averted, a new project of similar nature is being promoted. Ostensibly, several MOUs have been signed, in 2018, to form a joint venture company, consisting of Petronet LNG Limited, Sojitz Corporation, Mitsubishi Corporation, and Sri Lanka Gas Terminal Co. Ltd. to implement a Gas Infrastructure proposing Development Project.
The central facility of this project, too, would be an FSRU to be installed on the east side of the western breakwater of the Colombo harbour. Gas pipelines are to be led from the FSRU across the harbour, to the Kelanitissa Power plant, and to the Kerawalapitiya power complex, where a new LNG power plant is to be built. These will run through the harbour premises and densely populated areas.
It is not clear how a project of such national importance has been given to a set of private sector companies, some of whom have no track record of ever managing an FSRU, without a proper tender procedure as called for by the Electricity Act. A call has been made already for public comments on an EIA report, prepared by a Japanese Consulting Company, selected by the developers. One would expect a major project of this nature, with wide national implications to have been reviewed, in depth, with feasibility studies, and an EIA being conducted by an independent consultant selected by the CEA with a well thought out Terms of Reference.
The author and several other professionals submitted responses to this EIA, highlighting glaring omissions of not considering feasible alternatives and, particularly, the proposal to set up the FSRU within the Colombo harbour. The most casual manner with which the potential hazards and safety issues have been addressed in the EIA were highlighted.
These have not even been acknowledged.
There are many other ways that the proposed LNG import facility can be implemented, without such a short-sighted approach. We are fortunate to have our own Sri Lankan experts in the field, who have submitted many reports and made presentations, highlighting the need for care and possible ways of mitigating any risks which are inevitable.
With the present state of disarray in the energy sector, there are many other issues which need to be clarified.
Who has the responsibility for the supply of LNG to the power plant which we hope wou
ld be awarded soon for the 300 MW LNG power plant at Kerawalapitiya?
Will the supply be in place by the time the power plant is commissioned, which could be as short as two years? Or, will we allow the plant to be built, with no firm and acceptable solution for the LNG supply being in place, so that the plant would be run on diesel, and for how long? Who will bear the extra cost?
What will be the price to be paid for LNG delivered to the power plant and variations over the years?
How many LNG plants will be erected?
What are the plans for monetising our own gas resources in Mannar?
Do the plans for LNG infra structure permit the changeover to Mannar Gas on an equitable basis?
At a recent seminar, conducted by the Sri Lanka Energy Managers Association, the Additional General Manager of the CEB, made a presentation on the CEB’s plans for the LNG option, wherein an FSRU was proposed to be installed offshore at Kerawalapitiya. This is a far more acceptable solution than planting a potential bomb in the Colombo Port. Are we planning to do ourselves what the LTTE and Prabhakaran were prevented from doing?
The video evidence of the type of disaster that has occurred by gas explorations was displayed at the above seminar, highlighting this danger by Eng. Nalin Gunasekera, a world renowned expert in the field of FSRU deployment over many decades. These can be viewed at
— Mohammad Hijazi (@mhijazi) August 4, 2020
The first is on a gas plant in Mexico, which is what the FSRU amounts to and the second is on a pipeline in Taiwan. We are exposing Sri Lanka to both these dangers. The third is on a gas platform in the North Sea. The fourth is on the explosion in Beirut.
We would like the people of Sri Lanka to compare these photographs with those published in the media of the Disaster in Lebanon. Is there are any difference? The gas explosion could be even more devastating.
Explosion of Ammonium Nitrate
Store in Beirut
We have had a taste of the type of destruction that can be caused by such explosions in the Salawa ammunition store. But this is a mere fire cracker in comparison to a gas explosion.
Under these circumstances, a most dangerous project should not be allowed to proceed further to a point of no return, due to any agreements signed without due process by the previous government.
My appeal to the President, the Prime Minister and the newly elected government is to review this project very carefully, particularly in respect of the grave danger posed to one of our most valuable economic nerve centres–the Colombo Port.
Why record export earnings may not be good news
By Gomi Senadhira
The press release by the Central Bank on the external sector performance ,in June 2022, perhaps was the first piece of good news we had received for a long time. According to the press release, “Earnings from merchandise exports, in June 2022, increased by 23.9 percent over the corresponding month, in 2021, recording US dollars 1,248 million, which is the highest ever monthly export earnings recorded. An increase in earnings of both industrial and agricultural exports contributed to this favourable outcome, …. Cumulative export earnings, from January to June 2022, also increased by 14.3 percent, over the same period in the last year, amounting to US dollars 6,514 million.” So, most of us would think we have enough dollars to cover our essential imports. But, apparently, that is not the case.
Earlier, the Central Bank Governor, Dr. Nandalal Weerasinghe, had said that exporters only converted about 20% of their export earnings into Sri Lankan Rupees and the rest was not brought back to Sri Lanka. That amounts to the US $800 million a month! The Governor had also said “… At least 40% of the total export earnings should be added to the formal financial system of the country. So exporters have a responsibility, at a very difficult time like this, to bring back their foreign exchange, through the banking system, and if that happens, then we can resolve the fuel crisis comfortably.”
(Diesel shipment that arrived in Colombo, on 16 July, still not paid for want of dollars – The Island July 30th) It appears as if the Governor is pleading with the exporters to bring back at least 40% of their export earnings. More notably, from Dr Weerasinghe’s statement, it is clear that the exporter had only converted 20% of their export earnings to rupees during the last five months. Did they convert their export earnings to rupees during the last year, or in the previous years? For how long has this been going on? When the Central Bank says “… exporters have a responsibility, at a very difficult time like this, to bring back their foreign exchange, through the banking system,” does that mean the foreign exchange earned, with the exports, is brought through the hawala network, or other similar arrangements?
Exporters deserve credit for the great service they provide and should be rewarded, appropriately. But not disproportionately. The export earnings are not earned by the exporters alone. These earnings are earned by all those who contribute to manufacturing the export products. All of them should be getting their fair share of the export proceeds. If not, there is something terribly wrong with the system. Is this normal in international trade?
During the last few years, some of the studies by Indian scholars, including Utsa Patnaik and Shashi Tharoor, have placed in the public domain some of the less known facts on the effects of the British colonial rule on India. They explain how the British seized India, “… one of the richest countries in the world – accounting for 27% of global GDP in 1700 – and, over 200 years of colonial rule, reduced it to one of the world’s poorest,” and how during the period British Raj siphoned out $45 trillion from India.
How was this done? Patnaik explains, “In the colonial era, most of India’s sizeable foreign exchange earnings went straight to London—severely hampering the country’s ability to import machinery and technology in order to embark on a modernisation path, similar to what Japan did in the 1870s. …, a third of India’s budgetary revenues was … set aside as ‘expenditure abroad’. The secretary of state (SoS) for India, based in London, invited foreign importers to deposit with him the payment (in gold and sterling) for their net imports from India, which disappeared into the SoS’s account in the Bank of England. Against these Indian earnings he issued bills… to an equivalent rupee value—which was paid out of the budget, from the part called ‘expenditure abroad’.” Patnaik underlines that this was “something you’d never find in any independent country,”
But it appears something very similar is happening in Sri Lanka, many years after the independence! If the exporters do not “bring back their foreign exchange ,through the banking system,” or only bring back 20% of it, then how do they pay for goods and services obtained locally? The local value addition for most of our exports is 70% to 80% or higher! The only major exception is cut and polished diamonds. Tea exporters buy tea with rupees. Some of the imported inputs, like fertiliser, or diesel, are sourced locally! The garment industry had moved up the value chain during the last 40 years and provide many value-added services, like designing, locally.
How do the exporters pay for all these goods and services, if they keep more than 60% of their export earnings outside the country? Do they get it through “hawala” or similar arrangements? During the British Raj, payments to local producers were done with the taxes collected by the Raj. In present-day Sri Lanka, how does one manage to raise a large amount of cash to operate such a system?
If a sizeable chunk of Sri Lanka’s foreign exchange earnings goes straight to banks in London, New York, Zurich, or elsewhere, severely hampering the country’s ability to import essential items, doesn’t that mean, Sri Lanka’s wealth is getting siphoned out through our exports? And there is not much of a difference between what happened during the colonial period and the post independent Sri Lanka!
So, June’s record export earnings also mean nearly US$ billion was siphoned off during the month! A new record for the month of June! And that means Patnaik was wrong when she said this was not “something you’d never find in any independent country”
That is not good news.
(The writer is a specialist on trade and development issues and can be contacted at firstname.lastname@example.org)
Improving trend needs to be sustained on multiple fronts
by Jehan Perera
The government appears to have secured political stability in the short term. So far President Ranil Wickremesinghe’s efforts to restore stability appear to be working. Political stability is necessary for decisions to be made and kept. It is a necessary element for international support to come in. One of the IMF’s conditions to provide the country with the multi-billion-dollar loan it seeks is political stability that would ensure that commitments that are made will be kept. The protest movement has not mobilised public demonstrations on the very large scale of the past after the appearance of Ranil Wickremesinghe in leadership positions, initially as prime minister and subsequently as president. This would be seen as an achievement by the government. The present governmental line that protests should be within the law is difficult, and also frightening, to challenge when a state of emergency is in force.
The government has shown its ability to wield the emergency law with deterrent effect. Under the state of emergency that President Wickremesinghe declared on July 18, the period that a person may be detained before being brought before a magistrate has been increased from 24 to 72 hours. The authorities have been granted additional powers of search and arrest, and the military has been empowered to detain people for up to a day without disclosing their detention. The state of emergency also gives the president and the police broad powers to ban public gatherings, allows the police or military to order anyone to leave any public place or face arrest, and makes it an offense to cause “disaffection” or to spread “rumours.” However, in a sign that Sri Lanka’s system of checks and balances is still working, the Colombo Chief Magistrate’s Court has rejected a request by the police to ban a public protest planned by political parties and multiple organisations on September 9.
Human Rights watch has pointed out that “these provisions are vague, overly broad, and disproportionate in violation of the rights to freedom of expression, peaceful assembly, association, and movement.” The midnight strike on the protestors who had camped for over three months at the main protest site at Galle Face would make any reasonable person think twice before getting into physical confrontation with the government. The social media coverage of events that night showed men in black uniform and wearing masks, attacking the unarmed protestors. As these men did not wear identification badges, there is a question whether they were part of the official security forces or drawn from other groups that work with them. This response brought discredit to the perpetrators and disturbed both Sri Lankan people and the international community that have the welfare of Sri Lanka at heart.
The government has also used the full power of the draconian law to ensure that the leadership of the protest movement is neutralised. Several of them have been arrested, some of them given bail, others remanded, which would send a chilling message to the others. The government has also shown its willingness to offer high positions to those who are prepared to join it. This has led to a situation where two trade union leaders active in the protest movement have been treated very differently. One has been offered a high post while the other has been put into prison, although he has now been given bail. In a signal that he is sensitive to public pressure and human rights concerns, President Wickremesinghe had spoken to leader of the Ceylon Teachers Union, Joseph Stalin, after he was remanded and reportedly said he admires the members of the protest movement who talk of a system change.
Apart from the appearance of political stability there is also the appearance of economic stabilisation. The shortages of cooking gas, petrol and diesel, and the 13-hour power cuts were among the main catalysts of the protest movement. It was during the period of long power cuts, when staying at home became unbearable, that neigbourhood groups began to converge in urban centres to hold candlelight protests. However, at this time the supply of gas, petrol and diesel has improved significantly and the kilomere-long lines in front of fuel stations are much less common. Credit has gone to the QR code system put in place that gives to each vehicle a weekly quota.
The challenge for the government is to ensure that the economic situation continues to be stable without experiencing the acute shortages of key items that causes distress to the general population. The QR code system can only work if there is petrol and diesel to be distributed. The current imports of cooking gas, petrol and diesel appear to have been made possible by a World Bank loan which was re-purposed to the purchase of essential items. However, these funds will dry up soon. The question is what will happen after that. There is apprehension that the country will fall once again into a situation of severe shortage. The government needs to take the people into its confidence regarding the future. The government also needs to be trusted if it is to be believed.
The World Bank has given an indication that they are still to be convinced regarding the provision of further assistance to Sri Lanka. Earlier this month, the World Bank issued a statement “expressing deep concern about the dire economic situation and its impact on the people of Sri Lanka yesterday said it does not plan to offer new financing to Sri Lanka until an adequate macroeconomic policy framework is in place. Issuing a statement, the World Bank Group said it is repurposing resources under existing loans in its portfolio to help alleviate severe shortages of essential items such as medicines, cooking gas, fertiliser, meals for school children and cash transfers for poor and vulnerable households. To date, the World Bank has disbursed about US$160 million of these funds to meet urgent needs.” This is extremely concerning as the World Bank is closely connected to the IMF on which Sri Lanka is pinning its hopes for a big loan.
The issue of political stability is highlighted by the government as being necessary to obtain international assistance and also as a justification for quelling the protest movement through emergency laws. There is explicit blame being apportioned to the protest movement for creating instability in the polity that is deterring the influx of foreign assistance and investments. However, the fuller picture needs to be seen. The IMF as much as the World Bank, and indeed other potential sources of donor support, want their resources to be used for the intended purpose and not be squandered or siphoned away corrupt practices and in sustaining loss-making state institutions.
The hoped-for IMF-supported programme to provide assistance to Sri Lanka is being developed to restore macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, safeguarding financial stability, and stepping up structural reforms to address corruption vulnerabilities and unlock the country’s growth potential. IMF mission team to Sri Lanka last month specifically mentioned the need to reduce corruption stating that “Other challenges that need addressing include containing rising levels of inflation, addressing the severe balance of payments pressures, reducing corruption vulnerabilities and embarking on growth-enhancing reforms.”
Both the international funding agencies and the protest movement are on the same page when it comes to opposing corrupt practices. The main slogans of the protest movement during their heyday was the ouster of the then president, prime minister and cabinet of ministers, and indeed the entire parliament, on account of the corruption that they believed was responsible for having denuded the country of its foreign exchange reserves. This was not simply the replacement of one set of corrupt leaders by another. There are disturbing signs that some of those accused of corruption are once again on the ascendant.
The underlying demand of the protest movement was and continues to be the very “systems change” that the president has said he admires in his reported discussion with remanded trade union leader Joseph Stalin. Civil disobedience to obtain a government that is transparent and law abiding, that does not steal the wealth of the country, is a noble goal, no less sacred than the civil disobedience struggles engaged in by Mahatma Gandhi in India and Martin Luther King in the United States. The ingredients for a rebound of the protest movement continue to be in place and hopefully the evidence of a systems change will become more convincing.
Brenda Mendis… ‘Gindara Kellek’
I first got to know Brenda Mendis when she was very much a part of the group Aquarius, before joining Mirage..
With Aquarius, her dynamism bloomed, on stage, when she partnered two other female vocalists – from the Philippines.
And…yes, they certainly did rock the scene; the three girls were the talk-of the-town and they were featured at some of the best venues in the city.
She was also, at one time, associated with the band 2Forty2.
Brenda now operates with an outfit called C Plus Band, and with whatever free time, that comes her way, the talented artiste is now working on originals.
The latest is the song ‘Gindara Kellek’ and this is what Brenda has to say:
“I have known this guy Chathurangana de Silva for a very time and he has been involved in composing certain songs for the C Plus Band.
“We then got down to discussing about putting together a song which could be classified as a fast genre in music, and Chathurangana, along with Sampath Fernandopulle, came up with the suggestion for the lyrics, and they did so, based upon a proper observation of my lifestyle and the personality portrayal of myself, and that’s how “Gindara Kellek’ came into the scene.”
Brenda went on to say that the composing was done during a tight schedule.
“As I am the female vocalist, on a full time basis, with the C Plus Band, it took us more time than what is usual spent at a recording session, because of our public performances.”
‘Gindara Kellek’ is not Brenda’s maiden effort. She has been involved in quite a few other originals, including ‘Tharu Peedena Seethale,’ ‘Obai Mage Thaththe,’ ‘Mage Raththaran,’ ‘Kaprinna (Chooty),’ ‘You Never Know,’ ‘Mea Nilwan Nimnaye, and ‘Sitha Igilee Gihin.’ And, they are all uniquely different to each other, she says.
With the country going through a tough period, Brenda, spends her free time working out and reading.
“I would take this opportunity, through your very popular music page, to thank all those who helped me throughout my journey in this wonderful field of music.
“I shall continue to keep music lovers happy, with my music, and I would also thank my followers for supporting me and for being with me throughout my career in showbiz.”
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