9th  February 2003, Volume 9, Issue 30















Oluvil declaration proclaims advent of Muslim thesam

By  D. B. S. Jeyaraj

Muslim politics in this country underwent a defining moment on January 29 this year. Around 30 to 35, 000 Muslim people mainly consisting of youths - 

students, undergraduates, teachers and Moulavis - were involved in an impressive demonstration at Oluvil in the Amparai District of the Eastern Province. It was organised as a student demonstration upsurge (Maanavar Samuga Eluchchip Perani) with the student body of the predominantly Muslim South Eastern University taking the lead. While the bulk of participants were from the Muslim coastal regions of the Amparai District, a sizeable number did come from Muslim areas in other parts of the country too.

Most Muslim majority areas in the east bore a festive air with green (the Muslim colour) decorations in abundance. All businesses, schools, offices, banks, transport, etc., came to a halt in the Muslim areas. The mood was militantly buoyant. Two processions commenced from Palamunai and Attappalam around 9 a.m. Cries of "Allaho Akbar" (God is Great) rent the air. The processions converged in front of the university at Oluvil at about 10.30 a.m. Thereafter, a mass rally was held. Very important resolutions were passed unanimously. Unified political demands were raised. The essence of these demands were codified as part of a public proclamation to be known hereafter as the "Oluvil Declaration."

Five principles

The quintessence of the Oluvil Declaration outlines five assertive principles. Firstly, it emphasises that the Muslims of the north - east are a separate nationality or nation with its distinct identity of religion and culture; Secondly, the north - east is the traditional homeland of the Muslims; Thirdly, the north - eastern Muslims have the right of self-determination to charter their own destiny; Fourthly, Muslims must be guaranteed an autonomous, self-governing political unit linking all Muslim majority areas of the north and east; Fifthly, the social, economic, political and cultural rights of fellow Muslims living in a scattered state in areas outside the north - east must be ensured.

The Oluvil Declaration also proclaimed five demands requiring immediate redress. One - Muslim autonomy must be ensured in any federal solution; Two - Muslims are entitled to their equitable share in all resources for development. Three - The Muslim political leadership must unite. Four - Muslims must be represented as a separate entity at peace talks. Five - The final political settlement must have the consent of the Muslims.

The highlight of the Oluvil Declaration was that Muslims being a distinct nationality living in an identifiable homeland were entitled to self-determination. This right was to be exercised in the form of self-rule for Muslim majority areas in the north - east. This unit was described as a "Muslim Thesam" or Muslim country.

As expected, Eastern Tamil sentiments were troubled by the Oluvil demonstration and declaration very much akin to the series of  'Pongu Thamil' (Tamil upsurge) demonstrations organised by the Tamil students in various parts of the north - east. These demonstrations stressing "Samaadhaanam" (peace) and "Suyanirnayam" (self-determination) had a profound impact in influencing the course of Tamil politics in recent times. Likewise, the Muslim demonstration too is of tremendous importance.

Autonomous self-governing unit

The Sinhala hawks as usual responded in confusion. The Muslim demand for a 'Muslim Thesam' on the basis of nationality, homeland and self-determination was welcome as far as it undermined or thwarted Tamil aspirations. The notion of each ethnicity asserting its exclusivity and demanding separate arrangements was worrisome. The concept of a territorially non-contiguous devolution unit was upsetting because once accepted, the same principle could be applied in the south too with other communities clamouring for it as well.

Another response to the Oluvil Declaration was to treat it lightly as just one more event of little political significance. Interestingly, a Tamil newspaper had a piece on it with the opening paragraph emphasising that the 'Muslim Thesam' proclamation will not have any political impact whatsoever. This appeared to be wishful thinking and reminded one of the apathy and antipathy shown by the Sinhala polity towards the Tamils when they first began mobilising on the basis of self-determination.

The Oluvil Declaration evokes a strong sense of deja vu with the Tamil United Liberation Front's (TULF) Vaddukkoddai declaration of May 14, 1976, which demanded a sovereign, socialist and secular state of Tamil Eelam for the north - eastern Tamils. The Oluvil Declaration however, differs from Vaddukkoddai in three important respects. Territorially, the Muslims do not demand the entire north - east as one unit, but only want Muslim areas to be linked together. More importantly, unlike Tamil Eelam, the Muslim Thesam demand is not secessionary. It is a demand for an autonomous self-governing unit of devolution within the north - east. Thirdly, the Oluvil declaration has not been formulated by acknowledged political parties, but by committed student and youth activists.

The third point is crucial here. The Oluvil Declaration is primarily the handywork of students, youths and younger intelligentsia among Muslims. Established Muslim politicians may have been helpful in the background, but have certainly not hogged the limelight. So there is a legitimate poser here. What level of importance should one attach to this demonstration and declaration? Is this a mere student sideshow without any real impact?

The answer to that in simple terms is don't underestimate or underrate it. Its importance and significance will grow in time to come. The younger Muslim generation possessing a degree of idealism lacking in the elder politicians have taken the lead. Helped no doubt by the intellectual resources available at the South - Eastern University a political programme has been evolved. A concrete form has been given to the vague demands articulated by different shades of Muslim political opinion before. What will therefore happen is that all Eastern Muslim leaders and any future aspirants to leadership will follow the parameters set by the Oluvil Declaration. A broad political agenda has been set. Perhaps irreversibly!

Compelled to fill the vacuum

The Muslim youths have been compelled to fill a vacuum because Muslim political leaders are hopelessly divided and shamelessly fragmented. The on going peace talks are aimed at re-structuring the country. The objective is equitable power sharing for all communities in a united and undivided Sri Lanka. Past exercises of this type have excluded the Muslim community. So a unified and powerful Muslim voice is necessary at this juncture. Unfortunately, the leadership of Rauf Hakeem was weakened at a time when the community should have rallied strongly behind him.

Rising aspirations

Muslim aspirations, particularly those of the north - east were raised to a high level by the advent of M. H. M. Ashraff and the rise of the Sri Lanka Muslim Congress (SLMC). In the aftermath of his demise, these aspirations remain unfulfilled. In recent times, a strong element of grievance has been added. Muslim insecurity in the face of perceived Liberation Tigers of Tamil Eelam (LTTE) ascendancy in the east is a crucial factor in the post-ceasefire scenario. The problem has been further compounded by the divisions within the Muslim community particularly the SLMC.

Today, the position of Rauf Hakeem as the Muslim 'thesiya thalaiver' (national leader) is very much eroded. The SLMC has fragmented into four factions. Hakeem along with Basheer Segu Dawood and Thowfeek lead the main SLMC; A. H. M. Athaullah, Hafrath and Mohideen Abdul Cader lead a strong dissident group; Anver Ismail and Haris form a third group seemingly independent of both Hakeem and Athaullah. There is a fourth SLMC faction now known as the National Unity Alliance (NUA) comprising Ferial Ashraff, Hizbullah and Segu Issadeen. In addition, there are the PA Muslim sections with people like Najib Abdul Majeed and UNP Muslims like Ali Zaheer Moulana, Myown Mustapha, Sinna Maharoof, etc.

This lack of unity is definitely a great setback for Muslims at this juncture. This is the time when the Muslims need to unite and make their impact at the peace talks. Sadly, the SLMC is undergoing divisive convulsions. Hakeem's leadership and political clout is severely undermined. The Oluvil Declaration has taken due note of this and prioritises the unity of Muslim political leaders. There is no doubt that in the weeks to come, this question will receive full attention.

The underlying regional consciousness as articulated in the Oluvil Declaration makes one wonder whether the north - eastern Muslims will in the future accept leadership from outside. At the same time, the quality of prevailing north - eastern leaders leave much to be desired. While each of them is a lion in their parochial den, none seem acceptable at a wider level like Ashraff. Despite shortcomings, Rauf Hakeem stands head and shoulders above other eastern leaders. Yet, it seems an uphill task for Hakeem, a Central Province Muslim, to establish authoritative leadership over the north - east. This applies to Ferial Ashraff too.

Muslim divide

On the other hand, it is unlikely that Muslims of the Central, Western and Southern Provinces will accept overall leaders to emerge from the north - east. Although feelings of brotherhood and fraternity were expressed at Oluvil, we may be very well seeing the beginning of a divide between the Muslims of the Tamil and Sinhala regions. It is also useful to recall some comments made by Professor Emeritus Karthigesu Sivathamby in a recent newspaper interview where he pinpointed the "drift" between Sinhala educated Muslims of the south and Tamil educated north - eastern Muslims.

The mood in Oluvil was for a distinct north - East consciousness. Moreover, the Muslim claim of a traditional homeland, nationhood and self-determination in the north - east will be de-legitimised greatly if the emphasis is on an all island identity as opposed to a regional one.

In that context, it is difficult to envisage overwhelming support for the 'Muslim Thesam' concept among non-north-eastern Muslims. They would be broadly supportive, but with some exceptions, will not plunge in zestfully on this. It would be something of the approach up country Tamils displayed towards the Tamil Eelam demand of the Sri Lankan Tamils. If the north - eastern Tamils oppose these demands, then the southern Muslims are likely to pay more than lip service to this position. On the other hand, the southern Muslims will not be enthusiastic if the Sinhala majority in the south opposes it. The silence then could be deafening.

Youth to the fore

Given the growing disillusionment with Muslim political leaders, there is an increasing feeling that the Muslim intelligentsia should take up the mantle of leadership particularly at negotiations. This feeling was acknowledged to some extent by Hakeem when he was accompanied by some Muslim intellectuals at the last round of talks. Anti-Hakeem dissidents however, want Hakeem to be replaced by a team of intellectuals. This seems rather improbable. Nevertheless, the initiative displayed by Muslim youths and students shows that a 'new' leadership could very well emerge.

This new leadership could at the early stages play a supplementary role to the existing hierarchy. It could soon seek to replace and even eliminate the old leadership. A repetition of what transpired in Tamil politics could happen here without the scale of violence. The recent leadership squabbles have undermined the image of most Muslim leaders. If the Muslim youths could project an image of selfless, dedicated service, they could very well become the new leaders. The appeal of the Muslim cause against the backdrop of LTTE politics is very high to Muslim masses. Muslim youths could ride the crest of a wave.

A similar situation prevailed in the Indian states of Tamil Nadu and Assam at different times. Youths were at the forefront in Tamil Nadu during the 'anti-Hindu' agitation of 1965. The DMK cleverly cooped the youth movement within its ranks and subsumed it. Thus, the DMK with a generous proportion of erstwhile student leaders, swept the polls in 1967. In Assam, the students were in the vanguard of 'anti-foreigner' agitation in the '80s. The student movement assumed a greater political role and evolved into a political party, Gana Parishad which won conclusively in 1985. In that context, the future of youth power demonstrated at Oluvil could either be harnessed by the SLMC or take a more decisive supplanting role.

Explosive situation

Whatever course Muslim politics may take in the future, the Oluvil Declaration unambiguously proves that Tamil - Muslim relations have hit an all time low. If the Tamil assertion of identity was against perceived Sinhala hegemony, the Muslim assertion is against perceived Tamil domination. The long cherished Tamil political goal of a north - eastern unit faces the danger of being undermined. Moreover, Sinhala supremacists will exploit these sentiments further. The situation is quite explosive.

Those claiming to represent Tamils must act with great tact and understanding. The justice of the Muslim cause has to be recognised and accepted. The problem should be approached in a spirit of goodwill and amity seeking a compromise between two 'rights' rather than between 'right and wrong.' Equitable arrangements for sharing power and resources should be evolved. Appropriate devolutionary models should be examined. If Tamils require 'autonomy' for the north - east vis a vis Colombo, the Muslims need 'autonomy' for the south - east vis a vis Jaffna. A confrontational mode should be abandoned and the issue must be addressed through dialogue and discussion. The conduct of the LTTE, the self-styled 'sole' representatives in the sphere of Tamil - Muslim relations has been found wanting in the past. Hopefully, the Tigers may handle the issue efficiently and equitably in the future.

The Oluvil Declaration demonstrates clearly that the north - eastern Muslims have reached a significant milepost in their political evolution. The massive anti-standardisation demonstration in Jaffna by students in 1970 was the forerunner of emerging Tamil youth power. Radicalisation of Tamil politics began then and the process is yet to cease. Likewise, the Oluvil demonstration and declaration is a watershed in Muslim politics. The Muslim body politic in the north - east will never be the same again.

Women's studies

For the past couple of decades, one of the most dynamic fields of inquiry within academic circles has been the study of women. While this may sound pejorative; and pose the question as to whether women are yet again, both as a sex and a gender, being objectified or in this instance 'subjectified,' it cannot be denied that we need to study ourselves first before we can presume to understand or change our situations. This means discovering ourselves as women - something that has not been done before in academia.

Usually termed 'Women's Studies' or 'Gender Studies' or sometimes, even 'Feminist Studies,' the academic discipline of feminism has been established in many universities worldwide. While the different theoretical perspectives and ideological standpoints of feminism may deign as to what exactly a course of study is named, virtually all courses investigate both women and the world around us with the underlying consciousness that women are oppressed. 

Thus, invariably, the subject matter of women's studies is women - whether it is the action and agency of women, the position of women in a particular context or the representation of women in various ideological systems, or the effects on or responses of women to certain experiences, or the investigation of women's psychical or bodily constitutions etc. Sometimes, the focus of attention may isolate women while at other times, women may be looked at in relation to men - especially if the angle of inquiry is based on gender.

Women centered

Thus, apart from the content being centered on women, women's studies programmes apply/portray feminist analysis when 'looking at' what women peasants were doing in 6th century China or how World War II affected middle class women in America or the implications of gender roles in accessing agricultural extension schemes in Sri Lanka, or the representation of women in European pornography, or the biases in the Roman Dutch law systems that prevent women from obtaining justice, or the sexual politics of contraception in Singapore, or the gender base of the English language etc, etc, etc,. 

The above examples make it clear that women's studies spans a large number of disciplines - from politics to health, from the arts to education, from sociology to the media, from development studies to psychoanalysis. A typical syllabus or module of a women's studies programme will include components such as women's history (or 'herstory'), feminist theory, women's education, women/gender in development studies, the cultural representation of women, women and the law, social theory vis a vis women, and so on.  

In this context, the study of women is centered on the following premises. Number one is the recognition of the basic biological difference as well as gender (sociological) differences between women and men, and consequently, that the life experiences of men and women are different. Two - is the acknowledgment that the existing bodies of knowledge and epistemology do not always, if ever, encompass women. Three - is the identification that virtually all branches of mainstream learning are centered on men and are traditionally from the perspective of men (though individual women writers and scholars have been trying to rectify this anomaly on and off throughout the ages). Four - is that if women are to ever gain control of their lives and become as powerful as men in their societies, then their lives need to be researched, analysed, documented, recorded, valued and legitimised. 

Exploited and undervalued

This means that women's interests and needs, their experiences and their overall contributions to societies, workplaces, and families need to be made visible and valued for their own sake. Since there are marked gaps as to what is considered worth studying/researching, women researchers have had to revise the valuations that are generally applied in mainstream academic circles. More often than not, women as individuals, women's work and activities, roles and responsibilities in the family and the community, along with their contributions to history, culture, and politics are overlooked, undervalued, denigrated and exploited. 

Spotlighting women and their issues in feminist research is a means of creating space for women, in a context where there has hitherto existed a critical gap in academia. Mainstreaming women and the implications of gender as serious issues also provide validity and visibility to women. And, it is worth noting that feminist researchers and women's studies projects have had to employ new and innovative techniques in order to depict the issues concerned; which have resulted in the revolutionising research methodology and pedagogy. 

Consequently, one of the most exciting contributions made by women's research have been in the field of history/literature, where women have unearthed worldwide (from archives, libraries, old bookshops etc.) a large corps of women writing on a wide variety of topics. Feminist research has focused attention on these women writers and established a tradition of writing by women (especially in the sphere of English literature). Thus, women's studies have served to incorporate lost bodies of work to academia and critical scrutiny. 

Aside from this, feminist methodologies also involve the utilisation of a large variety of research sources - sometimes those that are more often than not disregarded by 'scientific' researchers. These are as divergent and range from oral histories of women to women's diaries, from the traditions of folklore to women's tales - both as sources and as focus of attention. 

There has also been a common tendency in feminist research to appreciate qualitative research techniques as being better able to capture the intricacies and depth of what is being scrutinised. These include participant observation and even participatory contributions to research as well as the problematisation of the researcher or ethnographer's standpoint vis a vis the research study. The investigator's own reactions to and reflections on the on-going research may also be recorded on occasion. The criteria of objectivity that has been the cornerstone of science and the acquisition of knowledge for centuries (ever since the Enlightment movement in Europe) is critiqued by feminists as a deeply flawed myth because the researcher her/himself cannot be divorced from his or her standing in cultural ideology, psychological conditioning, political bent, historical-time and so on. 

Qualitative research methods

Today however, there is a move towards combining qualitative research methods with quantitative ones which require a larger database, in order to enhance the representation of causal relationships as well as for its political impact. Often research is action-oriented in the sense there is a direct linkage between the content of study and the expected policy or action required in order to satisfy the transformational aims of women's studies. 

As noted earlier, women's studies have served to revolutionise methodologies of research and academic study, and also transformed pedagogy in enlivening ways. Teaching methods that depart from traditional examinations schemes which are highly competitive, and which set up students against one another are replaced by assessments, which are focused on measuring the student's own individual growth. Deeper student/teacher bonding is encouraged - often moving beyond the walls of the lecture rooms to informal discussions and social interactions. Thereby creating an overall atmosphere of communal learning and mutual growth that is hoped to dissuade rivalry, isolation, and plagiarism. 

Student assignments that include excursions and field activity, interviews and presentations, classroom exercises and experimentations further augment the multidisciplinary nature of women's studies.

Dynamic field

Consequently, women's studies have become one of the most dynamic academic fields of study. Those of us that are feminists at heart and who have also had the opportunity to follow a course in women's studies know that the experience not only empowers a woman as an individual, but also as a scholar that is unprejudiced, receptive, motivated and conversant with many other subjects as well.

Apart from which, most branches of learning have also benefited from the inputs of feminist theory and practice in academia. It is quite common now to find the inclusion of a component of gender or women's interests in disciplines such as sociology, mass media, literature, archeology, philosophy, history, development or peace or cultural studies etc. However, there is still a long way to go - in terms of mainstreaming women or an awareness of gender - into all aspects of a discipline so that it would become common practice to study this half of the world population as the norm. 

For feminists, the fundamental act towards promoting change is seen as consciousness-raising - and the establishment of women's studies in academia has clearly served to legitimise the cause of women.

Tug of war over on-line lottery

Both President Chandrika Kumaratunga and Commerce and Consumer Affairs Minister Ravi Karunanayake have opposed the setting up of an on-line lottery with Norwegian assistance. The proposal was made by Economic Reforms Minister Milinda Moragoda who also submitted a cabinet memorandum in this regard.

While President Kumaratunga has raised concerns over the livelihood of those dependent on the present lottery system, Karunanayake's concerns vary from transparency to the position of the existing Mahapola scholarship scheme. This development saw Prime Minister Ranil Wickremesinghe quipping in cabinet the previous week that the President and Minister Karunanayake have for the first time agreed on an issue, prompting a riposte from the President that she would then change her mind

We reproduce below the three cabinet papers in full.

Moragoda's cabinet memo
Cabinet Memorandum 
Ministry of Economic Reform, Science & Technology

Norwegian assistance to set up an on-line lottery project in Sri Lanka

It is proposed to set up a scholarship fund to provide scholarships to needy students in the country through an innovative lottery project. In this regard, I have had discussions with Norwegian authorities who have confirmed that Norwegian State Education Loan Fund would find ways to assist the proposed scholarship fund in Sri Lanka by introducing an on-line project.

The Norwegian National Lottery (NORSK TIPPING) which is owned by the government of Norway has agreed to contribute know-how and technology in setting up of such a lottery in Sri Lanka on an agreed formula. This project aims to achieve two objectives, i.e. introducing high tech infrastructure and providing educational opportunities for needy students.

Since setting up of the proposed lottery will be on government to government basis, approval of the cabinet of ministers is sought:

(a) To set up an on-line lottery project under National Lotteries Board (NLB) for the above purpose.

(b) To appoint a committee consisting of the following officers to negotiate terms and condition with NORSK TIPPING Norwegian Lottery and make suitable recommendations: 

Mr. S. B. Divaratne  - Chairman- Deputy Secretary to the Treasury
Mr. G. Hewagama  - Member - Secretary, Ministry of Economic Reform, Science  & Technology
Mr. D. Dissanayake  - Member -Secretary, Ministry of Eastern Development
Milinda Moragoda - Minister for Economic Reform, Science & Technology

Ministry for Economic Reform, Science & Technology

21 January, 2003


Karunanayake's proposals

Office of the Minister of Commerce and Consumer Affairs

Observations of the Minister of Commerce and Consumer Affairs on the Cabinet Memorandum of 21st January 2003 by Hon. Minister of Economic Reform, Science & Technology on Norwegian assistance to set up an on-line lottery project in Sri Lanka

As regards the Mahapola Trust Fund, at the beginning, the Mahapola Trust Fund generated an income by conducting the Mahapola Higher Education Lottery, which was suspended when it started to receive the profits of its investment in the Development Lottery. Moreover, the establishment of an on-line lottery in addition to the Development Lottery for similar purposes will only lead to a reduction in the income of the Mahapola Trust Fund, which is now well established and is a national programme.

As there is already a government proposal to privatise the National Lotteries Board, in respect of which offers have already been called for, establishment of an on-line lottery project in Sri Lanka with Norwegian assistance will not be consistent with the policy of privatisation of the National Lotteries Board based on competitive bids. Moreover, as there is already provision in the privatisation proposal for the successful bidders to operate an on-line lottery project within the National Lotteries Board itself, a separate on-line lottery project with Norwegian assistance will conflict with the privatisation process.

According to the privatisation proposal, the successful applicant should make an up-front payment of Rs. 3 billion and a specific amount per year for the leasing rights to operate the lotteries, which include an on-line lottery as well. Grant of approval to set up an on-line lottery with Norwegian assistance separately outside the process of privatisation will not be definitely transparent. If this proposal is accepted, the entire process of privatisation will be jeopardised.

The provision in the cabinet memorandum to the effect that the appropriate Norwegian Government Lottery Organisation has agreed to contribute know-how and technology in the setting up of an on-line lottery in Sri Lanka on an "agreed formula" is not clear and the salient features and the details of this formula have not been spelt out at all in the memorandum.

Another major objection to the proposal is that it offends all principles of transparency and integrity of the government. Since we will be bypassing open advertisement and tender procedure where any interested and experienced party can apply as was done recently by the National Lotteries Board.

In view of above vital considerations, it is my well considered view that the proposal to set up an on-line lottery project with Norwegian assistance is not acceptable due to its adverse implication for the Mahapola Trust Fund and also from the national perspective of privatisation of the National Lotteries Board.

Ravi Karunanayake (MP)

Minister of Commerce and Consumer Affairs

President's observations

Cabinet Memorandum
Observations  of the President

Norwegian assistance to set up an on-line lottery project in Sri Lanka

Approval has been sought in this memorandum dated 21 January, 2003 submitted by the Ministry of Economic Reform and Technology Science to set up a lottery with Norwegian assistance, with the objectives of introducing high-tech and providing educational opportunities to needy students; and, to appoint a negotiating committee for the purpose.

I have no objection in principle to setting up an on-line lottery, as new technological innovations have to come to this industry also, eventually. However, in doing so, it has to be ensured that the thousands of persons who now depend for their livelihood on present lotteries run by the National Lotteries Board, are not adversely affected by this move. Further, this should in no way diminish the assistance provided by these lotteries to the President's Fund and, through it, to the Mahapola Scholarship Fund.

As for providing educational opportunities to needy students, it has to be borne in mind that already there are several such schemes operated by the funds referred to above and other state programmes. The present proposal should neither dilute such schemes nor confuse matters by having yet another scheme. In fact, there must be proper coordination between these scholarship schemes, preferably under a single authority.

I have no objection to the composition of the negotiating committee proposed in the memorandum. 

Chandrika Bandaranaike Kumaratunga


The leadership crisis in the Muslim congress

"All decisions of the party shall be made by the politbureau by consensus (Mashoora) and such decisions shall bind all the members of the party ."

                                                - 3.1 a SLMC Party Constitution

"In exceptional circumstances the leader of the party will be free to take any decision notwithstanding anything contained in Article 3.1 a of the Constitution."

                                                - 3.3 c SLMC Party Constitution

By D.B.S. Jeyaraj 

The Sri Lanka Muslim Congress (SLMC) has been in the throes of a leadership crisis for quite some time now. The current round of infighting has seriously undermined the position of Rauf Hakeem as leader or thalaiver of the party. Hakeem's ascension to the party leader post after the demise of his leader and predecessor, M.H.M. Ashraff had never been easy or undisputed. That process itself resulted in the SLMC being fragmented. An anti-Hakeem group led by Ashraff's widow Ferial functions outside the SLMC under the label of National Unity Alliance (NUA). The SLMC itself is now trifurcated again in three broad factions. 

Today the position of Rauf Hakeem as the Muslim "thesiya thalaiver" (national leader) is very much eroded. The Muslim congress has fragmented into four factions. Hakeem along with Basheer Segu Dawood and "thideer" Thowfeek leads the main SLMC; A.H.M. Athaullah , Hazrath, Noordeen Mashoor and Mohideen Abdul Cader lead a strong dissident group; Anver Ismail and Haris form a third group seemingly independent of both Hakeem and Athaullah, but adopt a 'blow hot and cold' attitude towards both.

The fourth of course is the SLMC faction now known as NUA comprising Ferial Ashraff, Hizbullah and Segu Issadeen. In addition there are the PA Muslim sections with people like Najib Abdul Majeed and UNP Muslims like Ali Zaheer Moulana, Myown Mustapha, Sinna Maharoof etc. Thus the Muslim nationality renowned for core values such as fraternity and unity is deeply divided on account of politics.

The history of several democratic political parties both here and in India are replete with instances of organisations splitting after their founder or a very strong charismatic leader passes away. Dissidents dissatisfied with the new leadership break away or remain as troublesome groups within the party.

In India the Indian National Congress broke up after Jawarhalal Nehru and Lal Bahadur Shastri in Indira Gandhi's time. The anti-Indira "Syndicate" Congress itself fragmented later. In Tamil Nadu the Dravida Munnetra Kazgagham began breaking up after its founder C.N. Annadurai died. His successor Muttuvel Karunanidhi was unpalatable to many.

In Sri Lanka, the death of S.W.R.D. Bandaranaike saw several factions emerging as different parties or groups at the 1960 March polls. The seemingly monolithic United National Party (UNP) cracked after the colossus J.R. Jayewardene ceased to hold office. The Dissanayake - Athulathmudali group was not prepared to toe Ranasinghe Premeadasa's line. The Ceylon Workers Congress split after the plantation patriarch Saumiyamoorthy Thondaman died. Arumugan's leadership was unacceptable to some.

Inevitable crisis

Against that backdrop the crisis in the SLMC too could be regarded as inevitable. The party is rooted in religion and has an overtly puritan fervour "saithaan." Despite the abundant use of Islamic imagery and symbolism in its functional discourse, the SLMC soon succumbed to mammon and became a hotbed of byzantine intrigue.

The SLMC was formally founded on September 11, 1981 in Kattankudi, Batticaloa. The first leader was Ahmed Lebbe. Ashraff was his deputy. Initially it was not active in electoral politics. That metamorphosis took place five years later. It was at the famous "Badsha" convention in Punchi Borella, Colombo, on November 26, 1986 that Ashraff took over the leadership in a well planned manouevre. Pro-Ashraff delegates from the Kalmunai, Pottuvil, Sammanthurai electorates were transported enmasse to Colombo without other potential rivals suspecting anything.

The SLMC constitution was re-drafted; a major decision to contest elections was taken. That dream was realised in 1988 when the SLMC was registered as an approved political party and rendered eligible to contest elections under the tree symbol. Thereafter the SLMC grew rapidly. Its growth however was under Ashraff's larger than life personality, stature and dynamism. It could be said that the party was moulded in his image. The reference to Ashraff as thalaiver was truly resonant with the thondarkal (cadres).

Ashraff was a complex and efficient leader with a strong authoritarian streak. He was quite intolerant of any real or imaginary slights, Journalists who displeased him were blackballed. Newspapers critical of him were burnt by irate supporters. Anyone who crossed him in the party had to quit. There was no choice. He also suppressed any sign of defiance or dissent as soon as he detected it. 

This virtually dictatorial approach did not rely on charismatic appeal alone. The SLMC constitution too provided for it by giving the leader special powers. Despite the constitution providing for a consensual and collective leadership in decision making, the overriding power in the hands of the leader negated it.

"All decisions of the party shall be made by the politbureau by consensus (Mashoora) and such decisions shall bind all the members of the party" (3.1 a ) of the SLMC party constitution said. But it also countermanded this by another provision (3.3 c). "In exceptional circumstances the leader of the party will be free to take any decision notwithstanding anything contained in Article 3.1 a of the Constitution." These powers extended to disciplinary action too, thus enabling the leader to expel members if necessary.

Ashraff ran the SLMC like a fiefdom. A rich Muslim Buhardeen Hadjiar was made a national list MP over other deserving candidates in 1989. He was able to appoint Asitha Perera, a Sinhalese as a national list MP in 1994.

Iron rule

He was also able to discipline and even dispense with the services of other leaders easily when required. Jaffna MP Dr. Illyas, Wanni MP S.M. Aboobucker, National list MP M.M. Zuhair etc. were out in the cold at the tail end of the 1994-2000 parliament. "Thoppi" Mohideen though being an MP was humiliated beyond belief over a perceived mistake and forced to apologise in a demeaning manner. At least two chairmen - Usman and Segu Issadeen - though second in hierarchy (to the leader alone) of the SLMC had to leave the party after falling out with Ashraff.

The only person of repute to defy Ashraff and get away with it was Hisbullah of Kattankudi. The 1989 election arrangement was for Hisbullah to resign mid term and let Mohideen Abdul Cader be appointed. Hisbullah refused. Abdul Cader left the party then only to return later and be MP again. Ashraff was annoyed with Hisbullah again and initiated disciplinary action. But Ashraff died soon after and the man from Kattankudi was let off the hook.

Rauf Hakeem, an up and coming Muslim lawyer became Ashraff's prot‚g‚ in the party. He was an able orator in all three languages. Hakeem also had an excellent command of the Tamil language though not from the north-east. Hakeem became Ashraff's favourite because of his ability, inter-personal skills, religious fervour and also because of his non eastern connections. Despite the Eastern Province being his stronghold, the politically savvy Ashraff was not keen to promote an easterner who could pose an early threat to his leadership. Besides Hakeem's qualifications were outstanding when compared to the eastern bloc.

Hakeem about 10 years younger to Ashraff was junior to the reputed legal eagle Faiz Mustapha in Colombo when Ashraff was forced to leave Kalmunai in the aftermath of the Tamil-Muslim violence of 1985. Ashraff stayed for a while with Mustapha and it was then that the relationship with Hakeem blossomed. Hakeem unlike many other Muslim leaders was not 'tainted' with UNP or SLFP connections. He was captivated by Ashraff's messianic zeal and became a total disciple. Hakeem however was in London studying for his solicitors when Ashraff took over the SLMC at the 1986 Badsha Convention.

Winning combination

Hakeem was made national list MP in 1994 and also chairman of committees. He discharged his parliamentary duties with efficiency. Though K. B. Ratnayake was speaker and Anil Moonesenghe his deputy it was often Hakeem's lot to preside at sensitive sessions of parliament. He came off with flying colours. Hakeem also was SLMC secretary. The Ashraff-Hakeem duo - bridging the east-west divide - was a winning combination. The party grew in all parts of the island.

So confident did Ashraff become that he formed the National Unity Alliance. This was an umbrella organisation catering to all ethnicities. The SLMC was transcending ethnic politics of a particular flavour. Ashraff realised that a Muslim only party was limited to that community votes alone. A multi-ethnic party in which the SLMC was pivotal could fare better. Given the proportionate representation system and the heterogenous composition of the east , Colombo and Wanni the NUA could do very well indeed it was felt. It was at this point when Ashraff was transforming into a national leader from a communal one that tragedy struck in the form of an air accident. Ashraff was killed leaving a shattered party behind.

To be continued in next issue

Discrepancies in golf course deal

By Frederica Jansz

A report by the Committee of Inquiry on the Alienation of State Lands for Special Projects has found the Finance Ministry under Chandrika Kumaratunga deviating from the original approval granted in granting concessions for an 18 hole golf course on 135 acres of land situated at Diyawanna Uyana, Battaramulla.

Sponsors of the project, Mr. and Mrs. Siva Selvaratnam and a Japanese Investor named  J. Yanugihira were originally given the green light for this project by the BOI on June 5, 1997.

It was alleged at the time that a multi million-rupee commission was paid to Ronnie Peiris, a close associate of President Chandrika Kumaratunga for having secured government approval to build this golf course, houses, leisure center, and a public park at Diyawanna Uyana, Battaramulla.

The project did not get off the ground until last year when the new UNF government decided to appoint a special committee to evaluate this proposal.

Comprising of six members representing the Ministry of Enterprise Development, Industrial Policy and Investment Promotion, Ministry of Finance, Attorney's General's Department, Land Commissioner's Department, Board of Investment and a representative of the President, this committee met on four occasions and questioned the relevant officers in the BOI, Ministry of Lands, UDA and SLLRDC who dealt with the subject issues.

The committee also probed the allocation of state land to Lifestyle Health Services Private Limited.

The committee has approved both projects but pointed out certain discrepancies with regard to the golf course, which it states must be taken into consideration.

For instance, the committee found that a rental of 2% of the land value as determined by the chief valuer and approved by cabinet in October 1997 for the golf course had been approved despite the fact that the 2% rental could be offered only if the investment was more than Rs. 1000 million. At this point of time the project cost was only Rs. 510 million.

The lease agreement pertaining to this land was executed by the UDA and the company in September 2000. The value placed on the property as per the lease agreement was Rs. 300 million. The cabinet memo proposing the grant of permission to build villas, residential service apartments on the land and to permit the company to transfer the freehold title of the relevant operations of land was submitted to the cabinet in January 2001. The changes as to the use of the land was at complete variance with the assumptions made by the chief valuer.

Such a change would necessarily enhance the value of the entire property. This was confirmed by the chief valuer when questioned by the committee.

With regard to Lifestyles Health Service Private Limited the committee has decided that since an outstanding payment on the lease agreement was paid, this matter is now resolved and the project is free to proceed.

We reproduce the report in full for the benefit of our readers.

Report of Committee of Inquiry on Alienation of State Lands for Special Projects

1). Mandate

1.1.1 The Cabinet of Ministers at its meeting held on 17th July 2002 decided to appoint a committee of inquiry consisting of the following as recommended by the Minister of Finance, to inquire and report on "Alienation of State Lands for Special Projects -

(1) Asia-Pacific Golf Course Limited - Project to construct and operate an 18 hole international standard golf course

(2) Lifestyle Health Services (Pvt) Ltd - Lease of land at Kirimandala Mawatha.

(a) A representative each from the

Ministry of Enterprise Development Industrial Policy and Investment Promotion

Ministry of Finance
Attorney General's Department
Land Commissioner's Department
Board of Investment and

(b) Secretary to the President or  representative.

2. The Committee

As per the nominations received from the respective institutions, the committee comprises of the following:

Mr Ranjit Fernando  - Secretary Ministry of ED, IP & IP

Mrs Chitra Athurugiriya - Addl. Secretary Presidential Secretariat

Mr Prasanna Goonetilleke - Senior State Counsel Attorney General's Dept.

Mr R. Gooneratne Addl. Land Commissioner, Land Commissioner's Dept.

Mr L. D. Dickman - Executive Director (RD & SP) Board of Investment of Sri Lanka.

Dr. R. M. Ratnayake  - Addl. Secretary Ministry of Finance.

3. The committee met on four occasions. During these meetings we had the opportunity of questioning the relevant officers in the BOI, Ministry of Lands, UDA and SLLRDC who dealt with the subject issues. The committee also had the opportunity to peruse the relevant files of the BOI, UDA and SLLRDC.

4. Findings

Asia Pacific Golf Course Limited (APGC)

i) Approval has been granted for the setting up of a 18 hole golf course on an approximately 135 acre plot of land situated at Diyawanna Uyana, Battaramulla owned by the UDA in response to an application dated 7th April, 1997 received by the BOI.

ii) The sponsors of the project were Mr & Mrs. Siva Selvaratnam and a Japanese Investor named Mr J. Yanugihira. The BOI approval for the project was conveyed to the sponsors by letter dated 5th of June 1997.

iii)  By letter dated 28th October, 1997 UDA has informed the sponsor, with a copy to the BOI, that the land identified for the project could be offered to APGC on lease and that a valuation of Rs. 300 million has been placed on the land as per the chief valuer's valuation.

iv) The investor by letter dated 3rd November, 1997 sought approval from the BOI for the payment of the lease value on concessionary terms over a lease period of 99 years.

v).  The BOI operated a scheme which offered state land on a 99 year lease with an annual rental equivalent to 4% of the value of land provided the investment exceeded  Rs. 500 million. If the investment was more than Rs. 1000 million (excluding the value of land) the lease rental for the first five years was reduced to 2% of the market value of the land. Thereafter it would be 4% of the market value of the land. This scheme had been approved by the cabinet of ministers at its meeting on 8th October, 1997 based on a cabinet paper submitted by the Hon. Minister of Finance and Planning dated 22nd September, 1997.

vi) The investment as per the original application submitted to the BOI was Rs. 310 million. In order to qualify for the concessionary lease  rental,  Phase 2 of the project which involved the construction of villas, apartments, resorts and cottage houses had been added resulting in the investment increasing to Rs. 510 million. An amended application was submitted to the BOI by the sponsors on 12th November, 1997.

iiv) The cabinet at its meeting held on 4th March, 1998 considered the proposals set out in a cabinet memorandum submitted by the Hon. Minister of Finance and Plan Implementation dated 9th February 1998 and decided to grant a 99 year lease in respect of the said land on concessionary terms.

viii) The cabinet paper referred to in (vii) above proposed the grant of the following concessions for the project.

a). A rental of 2% of the land value as determined by the chief valuer during the first five years of the lease and 4% thereafter. (In terms of the scheme approved by the cabinet in October 1997, the 2% rental could be offered only if the investment was more than Rs. 1000 million. At this point of time the project cost was only Rs. 510 million.)

b) The deduction of Rs. 90 million from the land value stipulated by the chief valuer for the purpose of calculating the lease rental since only 40%-50% of the land could be used for the golf project and  investors had budgeted an additional expenditure to the tune of Rs. 90-100 million towards construction related to flood protection in conformity with UDA guidelines. (Please see Para xxiii (b)

ix. The cabinet at its meeting held on 4th March 1998 approved the proposals recommended in the cabinet paper dated 9th February 1998.

x). By letter dated 9th April 1998, the BOI conveyed its approval of the amended proposal which included the construction of residential flats/service apartments on private land adjacent to the land allocated for the golf course project.

xi. By letter dated 1st November 1998, the Chairman of APGC requested the BOI to allow the company to construct residential/service apartments in Phase 1 of the project itself on approximately one and half acres of encumbered buildable high land included in the 136 acre land to be leased for the project.

xii. The BOI by letter dated 12th May 2002 addressed to the Sri Lanka Land Reclamation and Development Corporation (SLLR & DC) sought the views of the latter on the technical matters raised by the developer viz. the feasibility of constructing residential dwellings on stilts above the flood water level and whether such construction would not have any adverse implication or diminish the flood water detention and conveyance capacity of the low lying area in question. The BOI letter also states that the developers have requested that construction of residential dwellings be allowed along the perimeter of the site to boost the financial and technical feasibility of the project.

xiii) SLLR & DC by its letter dated 5th June 2002 informed the BOI that the new proposal to construct residential dwellings on stilts on the golf course site itself is acceptable to them in principle.

xiv) APGC by its letter dated June 14th 2000 addressed to the Chairman UDA refers to a meeting held on 13th June 200 with the Chairman UDA, Chairman BOI and officers of the SLLRDC and the understanding and agreement reached at such meeting as follows:

The construction of 100 golf holiday village villas on stilts, permitted to be built on the demised property in compliance with SLLRDC specification.

Widening of the perimeter road leading to the villas to six meters.

All residential dwellings to be granted freehold rights.

The letter further states that "these additional requests have been necessitated due to the deteriorating investment climate in the country at present as opposed to what prevailed at the time when the project was proposed originally in early 1997."

xv) The UDA at its meeting held on 17th November 2000  had granted approval to allocate a further 85 acres of low lying land inclusive of the 19.5 acre block of land originally allocated to the Kaduwela Pradeshiya Sabha free of cost on the condition that such land will be maintained by the company for public purposes at its own cost as stipulated by the UDA. The UDA had also agreed to permit APGC to sell the golf villas on stilts on a freehold basis. These proposals were to be implemented with the approval of the Hon. Minister of Urban Development, Construction and Public Utilities.

xvi) The Acting Chairman of the UDA by letter dated 28th November 2000 addressed to the Chairman, BOI stated that the UDA board felt that it may be necessary to request the cabinet for covering approval to the above decision. A draft cabinet paper had been attached to the letter.

xvii) The Hon. Minister for Urban Development, Construction and Public Utilities by a cabinet memo dated January 18th 2001 concurring with the decision of the UDA Board sought the approval of the cabinet for the following:

a) Release 84 acres 2 roods 39.1 perches on a 99 year lease, free of charge, for the proposed flood detention arrangements with compatible recreational uses subject to adherence of the EIA recommendation including the approved storm water management plan and subject to the condition that the play ground and the park should be made available to the public after development in keeping with the decision of the UDA.

b) Permit the company to construct villas, apartments, resorts and cottage houses and other related activities within the golf course site, and to transfer the freehold title to buyers of villas and apartments upon receipt of a 100% premium in value of the chief valuer's valuation for the demised premises on a pro-rata basis for free hold areas in question in one lump sum, or market value as may be determined by the cabinet, from the APGC.

c) To revoke the decision of the cabinet of ministers dated 23/3/2000 for the allocation of land in extent of 19 acres 1 rood and 2.56 perches to Kaduwela Pradeshiya Sabha and to reimburse any expenditure incurred by the latter for the development of the said land after recovering such amount from APGC.

xvii). The cabinet of ministers at its meeting held on January 31st 2001 approved the recommendation made by the Hon. Minister of Urban Development, Construction and Public Utilities. At a subsequent cabinet meeting responding to a further cabinet paper submitted by the Minister dated 29th June 2001, cabinet specifically approved the "100% premium method" as the basis of recovery of the value of the freehold land as proposed as one of the two alternatives set out in the cabinet paper dated 18th January, 2001.

xviii) The chief valuer by his letter dated 28th August, 1997 addressed to the UDA has communicated the valuation he placed on the property in extent approximately 135 acres. In doing so, he states that the value of Rs. 300 million has been arrived at on the basis that the use of the land will be restricted to its present state without being permitted to develop same. He further sets out the assumptions made in arriving at this value. These assumptions, set out below, are, apart from the third, as per the terms of the assignment given to him by the UDA.

1) No permanent building or semi permanent building which will yield profit or temporary building will be permitted to be built on this land, other than a club-house.

2) No permission will be given to fill this land.

3) The land will be transferred to an investor as a single unit and that the transferee will not re-transfer the said land in parcels to other investors.

xxi) The lease agreement pertaining to this land was executed by the UDA and the company in September 2000. The value placed on the property as per the lease agreement was Rs. 300 million. The cabinet memo proposing the grant of permission to build villas, residential service apartments on the land and to permit the company to transfer the freehold title of the relevant operations of land was submitted to the cabinet in January, 2001. The changes as to the use of the land was at complete variance with the assumptions made by the chief valuer. Such a change would necessarily enhance the value of the entire property. This was confirmed by the chief valuer when questioned by the committee. The amendment made to increase the price for the parcels of land for which freehold title could be transferred by imposing a premium of 100% of the value placed earlier (on a pro-rata basis) does not adequately reflect the enhanced value of the entire property, once planning restrictions in respect of constructing permanent structures and parceling and selling of the land on a freehold basis was removed.

xxii) The committee questioned the chief valuer who stated that if the matter was referred to him after the change of the above conditions, the valuation of the land would have been materially higher.

xxiii) The above facts indicated that several additional concessions have been afforded to the project viz.

a) the lease rental for the first five years being only 2% although the investment proposed at that time (4th March 1998) fell short of the Rs 1 billion stipulated in the cabinet approved scheme. Later by letter dated 23rd February 2001, the investor informed the BOI that the scope of the project has changed and that the new investment cost is Rs. 1.96 billion.

b) The reduction of Rs. 90 million from the valuation on account of the usable land being only 40%-50% of the full extent of the land although such fact has been taken into account by the chief valuer in placing the value of Rs. 300 million. The schedule to the lease agreement however has been signed with the lease rental being calculated assuming the value of land at Rs. 300 million. The UDA intends adjusting the lease rental as and when expenditure is incurred by the company on flood protection related structures.

c) The Rs. 300 million valuation has remained unchanged despite the fact that the assumptions made in arriving at such valuation have fundamentally changed thereafter. Further the extent of the land leased is now firmed up at 141 acres. Thus the valuation of Rs. 300 million which was made on an estimated extent of 135 acres needs to be unleased pro-rata.

Lifestyle Health Services (Pvt) Ltd.

i) The BOI received an application dated 8th December, 1998 for the establishment of a Recreational Center for the provision of consultation services, exercise facility, recuperative services, physical training etc. The project was to be set up at No. 11, Flower Road Colombo -7 and the initial investment was to be not less than Rs. 250,000. The BOI approved the project and conveyed such approval by letter dated 6th January, 1999.

ii) The Chairman BOI by letter dated 23rd February 2000, (more than a year after the original approval) addressed to the Chairman UDA, has stated that the sponsors have identified a two acre block of land at Lake Drive and requested the UDA to allocate such land for the project on a 99 year lease on concessionary terms.

iii) On 10th March 2000, the sponsor has written to the Secretary, Ministry of Housing and Urban Development seeking his intervention for acquiring 188 perches at the Lake Drive site for the project. The sponsor has also written a letter on the same day to the Chairman BOI, stating his requirement to be 188 perches and requesting the lease of such land on a 12% initial payment and 4% lease rental thereafter.

iv) The Chairman BOI by letter dated 21st March 2000 has requested the SLLR & DC to release the land on the following terms:

- 50 year lease

- 12% down payment

- 4% thereafter

- rent to be reviewed at five  year intervals

The BOI Chairman has followed up on 31st March 2000  with a letter to the Chairman, SLLR&DC regretting the delay in finalising the lease of the land, to which the latter replies by his letter dated 3rd April, 2000 stating that the board of the SLLR&DC has approved the allocation of land on 31st March, 2000.

v). The chief valuer by his letter dated 20th March, 2000 has valued the property on the basis of a 99 year, 50 year and 30 year lease. These values are stated to be Rs. 50 million, Rs. 42 million and Rs. 34.5 million respectively. The valuation also states that it has assumed that the investor at his cost will have to obtain services such as water, electricity, sewerage from the present point of availability.

vi) The Minister of Urban Development, Housing and Construction by his cabinet memorandum dated 3rd April 2000 recommended the allocation of the land for this project on a 50 year lease with an up-front payment of Rs. 6 million and thereafter a lease rental of Rs. 2 million per annum.

vii) H. E. the President submitting her observations on the cabinet memo referred to above, has pointed out that although the land has been offered on a 50 year lease, the lease rental indicated in the cabinet memo has been based on the 99 year valuation as determined by the chief valuer. She therefore proposed that "as the lease rental has already been based on a 99 year period and considering the importance of the project, I suggest that the lease period should be for 99 years and not 50 years."

viii) Cabinet at its meeting of 7th April, 2000, approved the allocation of land as proposed in the cabinet memo. The period of the lease was however increased to 99 years.

ix) The Chairman BOI in response to an inquiry from H. E. the President as to whether the vesting of the land for the project can be made in favour of the BOI and thereafter for the BOI to lease same to the investor, points out that such a procedure would result in further delays. H. E. the President by a minute dated 11th May, instructs the Consultant, BOI to expedite the process by eliminating some of the steps outlined or by accelerating same.

x) By letter dated 15th May 2000, Senior Advisor of the BOI has written to the Additional Secretary of the Ministry of Agriculture and Lands proposing stating that since the land is not vested in the SLLRDC yet and in order to minimise delays in implementing the project, that H. E. the President has directed that the said lease to be effected by the Land Commissioner's Department.

xi) By letter dated 26th May, 200, H. E. the President has requested the Hon. Minister of Agriculture and Lands to expedite the lease and that the BOI would forward a note to the cabinet regarding the change of the agency executing the lease agreement. The lease agreement has been executed on 4th July, 2000. By letter dated 25th September 2000, the BOI informs the Survey Department that the investor is unable to obtain the assessment number for the premises since the access road identified as Model Farm Road in the plan is non-existent. The BOI by letter dated 19/10/2000 informed the SLLR&DC that the blocking out plan for the land in question has not been submitted to the Colombo Municipal Council (CMC).

xii) The BOI by letter dated 11th December 2000, has requested the sponsors to pay the initial up-front payment of Rs. 6 million before 31st December , 2000. The sponsor by letter dated 14th December points out that although the lease was signed in July, no legitimate access to the land has been given to them. He also refers to the dispute that had arisen with shanty dwellers when the SLLR&DC removed the culvert across the channel to alleviate flood situation. The SLLR & DC had proposed the construction of a bridge to alleviate the problem which construction has started in early December. He concludes by stating that legal advise to him is that the up front payment should not be effected till access is provided. However, letter dated June 4, 2001 by the sponsor addressed to the Land Commissioner states that the CMC is unable to allocate an assessment number for the provision of water and electricity until such time as the deed to this land shows a legitimate and legal access. He also assures that the Rs. 6 million payment as well as the first year's annual lease rental of Rs. 2 million will be paid the day "access" is granted.

xiii) By letter dated 17th October, 2001, the sponsor states that they are in the final throes of rectifying the access issue and are now in a position to secure the tenancy of the land. They also confirmed that arrangements have been made with the Divisional Secretary for the Rs. 6 million up-front payment to be effected. The first annual rental they said will be due in October 2002.

xiv) By letter dated 26th February, 2002, Divisional Secretary informs the sponsor that if full payment is not received on or before 31st March, 2002, action will be initiated to terminate the lease agreement. The sponsor has effected the payment on the 27th of March 2002.

xv) It is clear from the above that the Sponsor of the project was not in a position to use the land and start implementing the project due to problems associated with obtaining legal access. The BOI and others concerned have been informed of the situation and have taken steps to find a solution to the problem. Unfortunately this had taken a considerable length of time. Finally at or around the time the problem was getting solved, the sponsor has been given a final deadline of 31st March 2002 to effect payment. He has accordingly paid the money due prior to the date stipulated. As such we do not think there is cause for further action or inquiry.

Ranjit Fernando
Ministry of Enterprise Development
Industrial Policy and Investment Promotion

Mrs. Chitra Athurugiriya
Additional Secretary
Presidential Secretariat

Dr. R. M. R. Ratnayake
Additional Secretary
Ministry of Finance

R. Gooneratne
Additional Land Commissioner
Land Commissioner's Department

Prasanna Goonetilleke
Senior State Counsel
Attorney General's Department

L. D. Dickman
Executive Director (RD & SP)
Board of Investment of Sri Lanka




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