Features

Unbridled exploitation of natural resources belonging to nation

Published

1 week ago

2021/05/3

By Ashley de Vos

Authorities permit the construction of taller, copy-cat buildings, to satisfy their egos totally disregarding the fact that material resources used for these structures are finite and will soon disappear leaving a scar as evidence of the greatest irresponsible destruction to this beautiful island, a nation that belong to all its citizens

Since the advent of the Industrial Revolution, sand, the humblest of materials, is the main material that our modern cities are made of. Sand has become the core of our daily lives. The floors, the walls, the roof, partly in concrete, which is nothing but sand, gravel (metal) and steel glued together with cement. Sand is required to manufacture the glass in the windows, the miles of asphalt, later concrete roads that connect the buildings. Countless trillions of grains of sand is utilised to build the towering structures and we break apart the molecules of individual grains to make tiny computer chips (Vince Beiser. The world in a grain). Today, the construction industry worldwide consumes some $130 billion worth of sand each year (Freedonia Group., World Construction Aggregates 2016).

Sand Mafia

The need to excavate more and more sand, scraping the river beds and even the river banks and the remaining flood plains of the rivers is such that sand mining even threatens bridges. The sand mafia carries on with the greatest confidence, and the possible collapse of a bridge will be blamed on someone else. The holes left in the ground remain as breeding grounds for mosquito-borne diseases such as dengue.

The same applies to the demolition of large boulders and rock escarpments, being dynamited and broken up to provide the rubble and the metal for the construction of large mega structures and highways. In addition, the large blocks and slabs of rock being cut and exported as raw material to earn foreign exchange and for local use. Stone slab paving should not be used in places where people gather, the detrimental effect of the long term exposure to the accumulated radiation naturally present in the stone slabs is anyone’s guess.

The fact that some of these boulders have a significant historical value is of no interest to the suppliers, who supply the material.

Historical Balumgala

One case in point is that a 200-foot-tall boulder on the bank of the Kelaniya River referred to as Ballumgala, on top of which stood King Rajasinghe’s lookout point. Decades ago, the post holes for the timber structure built on the flattened granite top surface were still there. From here the King and his forces could watch the movement of the Portuguese boats plying the Kelani River from Colombo. From this lookout point, he could order the sabotage of the boats in the river, using a simple device. On the opposite bank was the Vidhapu gala. Chains laid across the river connecting the Vidhapu gala with a point near Ballumgala were raised when the Portuguese boats passed. The raising of the chains toppled the boats and threw the Portuguese soldiers into the water and the ready mouths of the many crocodiles that congregated at the spot waiting for the raising of the chains to bring them their next meal!

History ‘demolished’

Today, the boulder is almost no more, completely demolished, excavated and supplied as rubble for construction. This one act has erased an important historic facet of traditional warfare used against the colonial forces that should have been preserved as a memorial to the ingenuity of the local expertise. For some one selling the boulder and breaking it up for rubble, history is less important than greed. In the future, how many similar boulders and rock caves with Brahmi inscriptions will be lost to this enterprise.

From time immemorial all land always belonged to the king. He would issue a copper Sannassa giving access to villages and lands usually to persons who had won his favour in battle or in a similar exercise. Even the so-called Nindagama related to land was issued for use, only to Bukthi Vidinna. It was never on a permanent basis. The King as custodian of the lands, could also take it back, if there was a change in favour. This changed somewhat with the arrival of the colonial powers who usurped ownership of land. The religious orders that came with the Portuguese freely distributed land to their new converts. The Dutch used a similar ruse and used the locally appointed Mudaliers to help maintain the cinnamon plantations and collect taxes and produce for export––in fact, to do the dirty work.

After the British colonial takeover of the island, they declared and even introduced new regulations to usurp village lands. They declared that all land belonged to the Crown. They sold it on 99-year leases, this was the same for the coffee and tea estates as well. After the 99-year lease the land ownership returned to the crown. To be sold to another or to be reacquired. Most of the lands distributed by the British government after the structural expansion of Colombo, even to this date, are lands given to organisations on 99-year leases by the British. The government is reacquiring these lands today.

The Maldivian authorities only offers land for development on short leases. At the end of the lease the land reverts back to the government to do what they please with it. It is the same in Singapore. And similar in most parts of London. Land is leasehold, rearly freehold. An enlightened Sri Lanka should follow a similar principle. Unfortunately, as some assume that Sri Lanka belongs to an organisation or to someone other than the Country and the people of this country, they think they could do what they want with it.

The Archaeological Ordinance of 1941 is very clear, all artefacts found in the ground belong to the Department of Archaeology, as the statutory custodial of all artefacts and historical monuments held on behalf for the government. The land on which they stand though in private hands belongs to the government and the present owners merely Bukthi Vindinawa. Even if the site is important historically there is a process for its declaration and even take over. As such no land could be sold or taken over or passed on by any agency without addressing and obtaining specific permission through the line Ministries concerned, from the people and the country.

Lanka’s marine resources

While Sri Lanka claims that all the resources for a specified hundreds of miles in the ocean, today, under the law of the sea, and extended even further, belongs to the country and its people. Similarly the resources on land as well as in the ocean, including the harbour breakwaters and the groins in the sea also belongs to the country and its people. How could the officers of an Agency that has temporary jurisdiction over some land under its purview for the shortest period, sell the resource to a buyer, local or foreign, when the resource belongs to the people and the country? Did the people of the country give the Agency specific permission to do so? May be it was, a politician who is even more temporary, who entered the space, but has even less right to do so, did. It is the duty of every right minded Official to refuse to be compromised. Could these special Officers stand tall? Sadly there is no one, no, a couple are to be seen.

Ilmenite and Thorium have immense International value, more so in the future. This precious material should then be used for the benefit of the Nation, the country and its people. How could this important and most rare resource be leased out or sold to anyone? The environmental damage, due to the eventual excavation perpetrated on the sand dunes, and the land including the precious Mannar Island, the feeding ground of migrant birds for centuries, will be considerable. Mannar island which is even today just below or just above sea level, with climate change and eminent sea rise is at risk. The excess water discharged into the ocean due to the melting ice caps, will see this small and fragile piece of land completely washed away by the same south west and north east monsoons that helped create the island in the first place. What price is placed on the polluter pays principle for the destruction of the island. How will greed reconstitute the island of Mannar? Why should the country and the people of Sri Lanka eventually lose out?

Eppawala judgment

Dr. Ranjith Amarasinghe, a most worthy son of the soil, issued a judgement on the Eppawela Phosphate deposit, which was to be sold to a multi-national. The judgement is essential reading for all. The priest of the Eppawela temple with the help of activists like Nihal Fernando, the famous photographer, went to court against its sale. The judgement by Dr. Ranjith Amarasinghe, used the law as it stood, and drew the attention of all, to the history, the nation and the people of the nation and presented a masterful document that corrected all. The sale was stopped. There must be more Ranjith Amarasinghe’s amongst us or is it that we are seeing the end of an era, where the Law is no more the Law, with legal eagles spending more time looking for loop holes to serve the perpetrator.

(To be concluded tomorrow)

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Features

Twenty-five years of private sector-led renewable energy development

Published

14 hours ago

2021/05/12

Sahan Weerasooriya

by Dr Tilak Siyambalapitiya

A policy change in 1995 to allow private investments in electricity generation into the grid, a standard agreement and a standard price for electricity produced, enabled such investments to pick-up faster than in other countries. The first mini-hydro power project with entirely private sector funding and private ownership commenced operations in May 1996.

The agreement and the price

Dubbed the “most investor friendly agreement in the world”, Sri Lanka’s renewable energy developers were offered, since 1996, a non-negotiable 15-year agreement (20-years for projects signed after 2008). The agreement says, literally, “I will buy all your electricity produced for the next 15 years, any day any time; I will not penalize you for delays in your project or for not producing electricity at all or producing less electricity than you promised; I will not ask you to start or stop your power plant”. There is no other agreement in the business world 25 years ago or now, where such agreements are offered to a seller.

Then the price. The agreement carries a price, which too is not negotiable. It says: “I will pay you a price that reflects the fuel saved in major power plants; in case fuel prices go down, I will not drop the price below 90% of the price when you signed; if the fuel prices go up, I will keep on increasing the prices without any limit”.

I shall buy all your all your product at the following price for 20 years. If you do not produce too, even when I need it badly, I will only greet you with a smile !

Government procurements have to be on competitive basis. This policy of competition was further reinforced by the Electricity Act 2009, required to be implemented by the Public Utilities Commission (PUCSL). The legal validity of such renewable energy agreements and price offers, that make a mockery of rules of “competition”, has been debated in many quarters over the past 25 years.

Has it been good ?

Well, yes and no, depending on whom you speak to and your convictions. To the credit of the program, Sri Lanka’s renewable energy development accelerated after 1996. These are smaller power plants using hydropower, wind, wood and more recently, waste. If the government attempted to develop them through a state entity, excessive overheads and inefficiency would most likely creep-in. There would have been a politically appointed Chairman and a fleet of vehicles going up and down, to run a tiny minihydro.

On the other hand, had the state rigidly controlled what is developed and where, renewable energy projects developed would have been more efficient, well-engineered and certainly more environment friendly. Stories are many, where a private mini-hydro project agreed with the Central Environmental Authority to release water for downstream users, but later blocked it 100%. As the saying goes, “Sri Lanka’s streams and rivers are now flowing in tubes”, but we are proud about a vibrant renewable energy industry !

Renewable energy from such smaller private investments reached 1% of total in year 2000 and 4% by 2006. Buoyed by another policy change in 2007 that offered a contract for 20 years and an even more attractive prices, renewable energy from small power plants raced toward a 10% policy target for 2015. It reached the target indeed, with 11% of electricity produced in 2015 from the combined production in 147 minihydros, 15 wind and 3 each of grown biomass, wood waste and solar parks. Unlike many countries who make headlines by stating their renewable energy contribution in megawatt, Sri Lanka’s targets and achievement are stated in kilowatthour, honestly reflecting the true benefits to save fuel and to reduce emissions.

Continuing its race for development, by 2020 (provisional figures) electricity produced from smaller private renewable energy power plants reached 12%. Adding major hydros, the energy share from all renewable energy was 37% by 2020, a share unmatched by all countries and expatriate Sri Lankans that preach Sri Lanka on how to develop renewable energy.

Has the price been good to the investor?

The policy of paying renewable energy projects signed over 1996-2016 was to pay the value of fuel saved in the grid, calculated and published in advance every year. Agreements signed after 2007 enjoy an even more attractive pricing formula: a technology-specific, cost-reflective price. That means minihydros are paid a price to make that a profitable investment; wind power is paid to make that technology, a profitable investment.

Once signed, price paid does not change. If costs go up or down after signing, or bank interest rates go up or down, the price remains the same. Fortunately for all who signed in 2008-2009 or later, equipment costs and bank interest rates both have been on a downward trend. Projects that borrowed at 18% in 2018 possibly borrowed at 8% this year, but still enjoy the price paid calculated at 18% interest. By way of equipment costs, solar power has seen the deepest reduction in costs. More on that later.

What was the benefit to the public?

Why did the government offer such attractive rates and terms to private investors? Sri Lanka did not throw Rs 10 at renewable energy investors and say “do it if you can”. The key principle in the pricing policy was: price paid makes investments profitable (not just profitable but excessively profitable). The agreement still remains the “most investor friendly agreement” in the world.

In other words, the public of this country, through their electricity bills and through taxes, have paid for the investments, bank interest, and profits (above market rates), to make privately-owned renewable energy an excessively profitable venture. Other benefits of renewable energy need not be repeated here; they are all well known. So what is the benefit to the public who fully paid (and continue to pay) for these investments, of which the ownership is private?

It should be the longer-term benefit of cheaper renewable energy. That’s why the 2008 announcement on the revised policy said as follows: “Renewable energy, which is a natural resource, belongs to the State. Developers are provided with a high tariff to cover their expenses and to earn reasonable profits for an adequately long period (in this case the first fifteen years). Thereafter, the benefit of the resource should flow to the electricity customers, while continuing to provide an operating fee to the small power producers and full recovery of maintenance costs”.

The closest example is the CEB-owned fleet of hydropower plants, which are bigger. The familiar ones are Laxapana, Kotmale and Victoria, among a total of 15 power plants. The public of the country paid for those too, starting from 1950. How? Through electricity bills (because loans and government investments were apportioned between CEB and Mahaweli Authority), taxes and benefits foregone. The major hydros today produce at a cost of Rs 3.35 per unit of electricity. True, that except for Upper Kotmale, all are 20 years or more of age. The fleet of minihydros, too, as they mature into their contracts, after 15 years of good profits to investors, should deliver benefits to electricity customers. That’s why the 2008 announcement said: Therefore, once the developers’ costs and profits are paid, it is inevitable that in the long-term, renewable energy should flow into the national grid at prices significantly lower than the cost of thermal energy.

However, information published indicates that the principles on which small power producers were enabled in 1996 and then enhanced in 2008, are indeed being followed. CEB produces electricity from mature hydros at Rs 3.35 per unit (PUCSL assessment 2019). The price for mature hydropower in the private sector was Rs 5.38 per unit (CEB publication 2019), precisely following the principle of fairness: good profits to investor for 15 years, benefits to electricity customer in the longer term.

As more and more minihydros mature, later wind, biomass and solar projects mature, we should be seeing finally, that ALL renewables produce electricity at prices very significantly lower than all the alternatives. Renewables replace thermal power and we should be paid the same price, will not be an argument, now or then, or in the future. “My power plant is not so good, it does not have water, is not an argument”, because no one defined where to build the minihydro; the investor selected it.

The argument that private renewables can produce below the price of oil, gas or coal does not hold, then, now or in the future. Renewables were allowed because fossil fuels were expensive and bad. The price of fossil fuels comprise royalties, production and delivery costs. If one needs a comparison, royalties for renewables have to be paid to the “republic” (the treasury) and production costs paid by electricity customers. Since royalties are not charged for renewables, both CEB and private, then renewable energy prices should be compared only with production costs. The investment has already been fully paid by the republic.

I conclude with a quotation from the 2008 announcement: “Small power producers opting not to migrate to the new agreement by 30th April 2008, will be offered the tier 3 tariff announced for the relevant technology in the year in which the existing agreement expires, after its full tenure of 15 years is completed”. That means, retiring minihydros should be offered prices in the range of Rs 6 per unit.

It is yet to be seen whether the PUCSL and consumer rights groups are willing to fully and comprehensively understand the issue, step-in, and ensure that “renewable energy belongs to the republic”, as stated in the Sri Lanka Sustainable Energy Authority Act 2007.

The country’s streams are now flowing in tubes, but do benefits flow to the public who have fully paid the investors with profits?

Features

Danger of disregarding Geopolitical Realities

Published

2 days ago

2021/05/11

Sahan Weerasooriya

Negotiating Agreements for Foreign Investments:

By Dr. S.W. Premaratne
Attorney-at-Law

Foreign Policy decision-maker, of a state, have to take into consideration the prevailing geopolitical environment of the international system, and of the region concerned, at a given time, when there is a foreign policy aspect involved in the decision that has to be taken regarding any issue Omission, or failure to give consideration to this aspect of the issue, can lead to disastrous consequences. Several examples from the recent political history of Sri Lanka can be given to illustrate this point.

Sri Lanka’s conduct of foreign policy, in the 1980s, is a clear example of the serious consequences of ignoring India’s concerns regarding Sri Lanka’s pro-West tilt in its foreign policy. Sri Lanka’s declared policy was non-alignment in maintaining relations with other states, specially the Big Powers in the West and the East. However, the J.R. Jayewardene government, that came to power, in 1977, sought to develop a closer relationship with the Western countries, led by the USA. The nature of the interactions between the diplomats of the USA and Sri Lanka, at the time, had given the impression to India that Sri Lanka was seeking the assistance of the USA for suppressing the Tamil militant movement in Sri Lank, fighting for the rights of the Tamil community. There were also reasons for India to suspect that there was an understanding between the Sri Lankan Government and the USA to allow the Trincomalee harbour to be used by the USA. It was this perception of India that Sri Lanka was following an anti-India foreign policy, endangering the security of India that motivated India to intervene militarily in the year 1987 to thwart the progress of the Vadamarachchi operation, aimed at militarily defeating the Tamil militant movement.

After aborting the progress of the Vadamarachchi operatio, the Indian government proceeded to compel the Sri Lankan Government to sign an Agreement – the Indo-Sri Lanka Accord of July 1987 – to ensure that Sri Lanka respected India’s security concerns and other interests when seeking assistance from outside Powers for Sri Lanka’s economic development or national security.

India’s concerns regarding China’s excessive involvement in Sri Lanka’s development projects

Sri Lanka’s political leaders and diplomats, whenever they get an opportunity, express their affection for their Big Brother, India, and express the need for further strengthening the friendship for the mutual benefit of both countries. India’s perception, however, is that, especially after the change of government in 2005, there is an evolving special relationship between Sri Lanka and China posing a serious threat to the national security of India.

Sri Lanka felt intensely isolated from the international community after adopting the Resolution A/HRC/46/L. Rev. 1 against Sri Lanka, at the UNHRC, in Geneva, in March, 2021, especially because India also decided to support the core-group indirectly by abstaining from voting.

The only consolation for Sri Lanka now is China’s expression of willingness to further strengthen its strategic relationship with Sri Lanka by extending further development assistance to Sri Lanka, within the framework of the Belt end Road Initiative. Subsequent to a telephone conversation between the two leaders, the President of China and the President of Sri Lanka, in a statement issued by the Chinese Embassy in Colombo, on March 30, 2021, it was stated that “China attaches great importance to the development of bilateral ties and stands ready to work with Sri Lanka to determine the strategic direction and achieve steady growth of the relationship. China stands ready to steadily push forward major projects, like the Colombo Port City and the Hambantota Port, and promote high quality Belt and Road Co-operation, providing robust impetus for Sri Lanka’s post pandemic economic recovery and sustainable development”. China projecting Sri Lanka as an intimate partner of the Belt and Road strategy indicates that Sri Lanka is distancing itself from the path of non-alignment and adopting an anti-Western and anti-India approach.

In the matter of obtaining foreign investments for development projects, Sri Lanka has failed to foresee the foreign policy implications of overreliance on China. The two massive development projects, initiated during the Mahinda Rajapaksa administration, which came to power in 2005, were the Hambantota sea port and the Port City Project in Colombo. The amount of money invested for these two projects, by China, was so massive that Sri Lanka happened to sign an agreement for permitting the management and control of the Hambantota Port by the state-controlled company of China, under a 99-year lease agreement. The Management and control of the Colombo Port City area also has been granted to the Chinese construction company, under a 99-year lease agreement. Not only India, but also the USA and other Western countries have expressed serious concern regarding the involvement of China in strategically significant massive development projects in Sri Lanka. India’s perception now is that Sri Lanka is an aircraft carrier of China, stationed in the Indian Ocean, close to India. Hambantota Port is viewed as another pearl in the string of pearls maintained for containing India by China.

India is also concerned over the lack of interest on the part of the Sri Lankan Government to go ahead with the development projects regarding which agreement had been reached with India, during the Sirisena-Wickremasinghe coalition government. In May, 2019, a Memorandum of Understanding was signed by the Sri Lanka Ports Authority (SLPA), Japan and India proposing the development of the East Container Terminal jointly, Sri Lanka and Ports Authority retaining 51 percent shares. However, the present Government deviated from that understanding and decided to nominate one Indian investor, Adani Group, disregarding Japan. But, the attempt of the Sri Lankan Government to involve the Indian Company in this project by offering 49 percent of the shares of the ECT was thwarted by the trade union action of the port workers, supported by an influential section of the Buddhist priests and also a section of the ruling alliance. The Sri Lankan government had no alternative but to respond to the demand of the trade unions by getting the Cabinet approval for developing the ECT only by the Colombo Port Authority, without involving India or Japan.

India has also expressed concern over the attitude of the Sri Lankan Government concerning the development and management of the Trincomalee oil tank farm. The lower farm has been managed jointly by the Ceylon Petroleum Corporation (CPC) and the Indian Oil Corporation (IOC) via Lanka IOC Private Limited. The 2003 tripartite agreement signed by the Sri Lankan Government, LIOC and the CPC covers the entire tank farm. India is now concerned about the excessive delay in granting the Sri Lankan Government’s approval for commencing the development of the Upper Tank Farm, comprising 84 tanks.

Another joint venture, regarding which Sri Lanka sought the involvement of India’s Petronet LNG Ltd. Company, and also a Japanese investor, was the proposed liquefied natural gas LNG terminal that was to be set up near Colombo. Although Indian and Japanese Investors had indicated their willingness to join this project, as partners, the Sri Lankan Government has not yet given its final approval for commencing the construction work.

India is also very much concerned over the lack of progress in the reconciliation process initiated after the end of the war. India’s concern in this regard was expressed very effectively and in very clear language in a statement made by the Indian Foreign Minister Jaishankar in the course of a media conference during his two-day visit to Sri Lanka in January, this year. In his statement the Indian Foreign Minister said: “As we promote peace and wellbeing in the region, India has been strongly committed to the unity stability and territorial integrity of Sri Lanka. Our support for the reconciliation process in Sri Lanka is long standing as indeed for an inclusive political outlook that encourages ethnic harmony. It is in Sri Lanka’s own interest that the expectations of the Tamil people for equality, justice, peace and dignity, within a united Sri Lanka, are fulfilled. That applies equally to the commitments made by the Sri Lankan Government on meaningful devolution, including the 13th Amendment to the Constitution”.

Sri Lanka should not consider that India’s interest and involvement in the post-war reconciliation process as a case of a foreign country intervening in the internal affairs of Sri Lanka illegally. India is guided by a mindset that there is a moral responsibility on her part to intervene and bring about a final settlement to the conflict in Sri Lanka.

Colombo Port City Economic Commission

Colombo Port City Economic Commission Bill which was challenged in the Supreme Court, purported to establish an Economic Commission for the administration of the Port City, built by a construction company of the Chinese Government, adjacent to the Colombo Port. This Bill seeks to grant extensive powers to an institution called the Colombo Port Economic Commission, whose members will be appointed by the President of Sri Lanka. According to the provisions in the Bill, the supervisory power of the Parliament of Sri Lanka has been excluded, both regarding the manner of exercising the powers granted by the proposed legislation to the Commission, and also regarding the selection of persons to be appointed as members of the Commission.

Moreover, regarding the activities that take place within the Colombo Port City area, some institutions of the Government of Sri Lanka are excluded from exercising their authority. Dr. Wijedasa Rajapaksa, in his written submissions submitted to the Supreme Court, in connection with the petition filed challenging the Bill, makes specific reference to the Customs Ordinance. He gives the warning that there may be importation of prohibited substances such as drugs, weapons, etc. He points out that in the event of any violation of International Treaties and Conventions, within the Port City area, it is not the Commission but the Sri Lankan Government that is responsible.

Conclusion

In view of the intense power struggle between China on the one hand and India and other partners of the Quad, led by the USA on the other hand, for dominance in the Indian Ocean area, the Parliament of Sri Lanka passing legislation for permitting such a high degree of autonomy to an administrative authority that can be controlled by the Chinese government will be considered by India as a serious threat to its security. This pro-China foreign policy orientation will also be an obstacle for Sri Lanka to promote friendly relations with democratic countries in the West determined to thwart Chinese domination in the Indian Ocean region.

Features

The Philippines and SL combine

Published

2 days ago

2021/05/11

Sahan Weerasooriya

Singer Suzi Croner (Fluckiger), who was a big hit in this part of the world, singing with the group Friends, continues to make her presence felt on TNGlive – the platform, on social media, that promotes talent from all corners of the globe.

She made her third appearance, last Saturday, May 1st, but this time she had for company Sean, from the Philippines, who, incidentally, was in the finals of The Voice of Switzerland 2020.

Their repertoire, for TNGlive, on the evening of May 1st, including hit songs, like ‘Something Stupid,’ ‘Let Your Love Flow,’ (Sean), ‘If You Can’t Give Me Love,’ ‘Your Man,’ (Sean), ‘Crazy,’ ‘Great Pretender,’ (Sean), ‘Amazing,’ and ‘Stand By Me.’