News

Politics

Focus

Spotlight

Editorial

Interviews

Insight

Review

Sports

Business

Arts

Letters

Nutshell

Fashion

Archives

17th October, 2004  Volume 11, Issue  14

First with the news and free with its views                                     First with the news and free with its views                             First with the news and free with its views                                    

Issues

Bar Council uproar over a note by CJ

By Frederica Jansz 

Controversy erupted at an emergency meeting summoned by the Bar Association of Sri Lanka (BASL) on Saturday, October 9, when BASL Chief, Ikram Mohamed read out a note from Chief Justice.......

 

More...


 Top Issues Stories

> Trading charges on tanks and rice

> Uniflow system - chaos and confusion

> School children stranded

> Anti-Indian sentiment over BPC entrance

> A Swiss telegram


Bar Council uproar over a note by CJ

Sarath N. Silva and Ikram Mohamed

By Frederica Jansz 

Controversy erupted at an emergency meeting summoned by the Bar Association of Sri Lanka (BASL) on Saturday, October 9, when BASL Chief, Ikram Mohamed read out a note from Chief Justice Sarath N. Silva warning members of possible contempt of court action.

An emergency meeting of the Bar Council was called for October 9 and held at 10 a.m. at the BASL auditorium at Mihindu Mawatha, Colombo 12.

A notice issued by Secretary Anoma Goonetilleke stated the council was meeting to consider what action the BASL should take with regard to the direction given by the Judicial Services Commission (JSC) to Wellawaya Magistrate Kelum Bandara for the judge to recall the warrant he had issued for the arrest of SSP Sheriff Deen.

Recalling a warrant

Following orders issued by the JSC, Judge Bandara was compelled to recall a warrant for the arrest of SSP Sheriff Dean of Wellawaya despite the evidence of three witnesses who identified Sheriff Dean to have been behind the wheel of a vehicle that mowed to death a resident of Wellawaya.

At the Bar Council meeting last Saturday, President's Counsel Ikram Mohamed read out a letter he said was from the Chief Justice which stated words to the effect that members should not discuss the incident revolving around the Wellawaya magistrate as it may amount to contempt of court.

The unprecedented note caused a furor as members loudly voiced their protest. President's Counsel N. R. M. Daluwatte pointed out that the Bar Council was a body comprising of independent members and irrespective of what the JSC had said this was a matter that must be taken up for discussion. "If not, why call this meeting at all?" he queried.

No power

President's Counsel Nihal Jayamanne however attempted to say that the council should indeed refrain from taking action or discussing the matter as a result of the letter by the CJ. He was shouted down by other members who booed and jeered his comments.

"Then what?" they yelled almost in unison charging their independence as lawyers was being seriously challenged.

Rohan Sahabandu, one time treasurer of the BASL said, in view of the letter from the Chief Justice "all of us are in danger of facing contempt proceedings." Therefore, he suggested the Bar Council refer this matter to an advisory committee consisting of past presidents for an opinion whether discussion on this matter amounts to contempt of court.

The senior attorney had also told the BASL President, Ikram Mohamed that it was he who started all this talk of contempt of court and should take responsibility for solving the problem.

Zonal Vice President for the Bar in Badulla under which Wellawaya comes, Niranjan Perera also spoke. He observed the JSC has no powers to issue directions to a magistrate to change judicial orders. He said the powers of the JSC are restricted to disciplining a judicial officer. "If a wrong judicial order is made the aggrieved party should go before a superior court for remedial action," he said.

Fact finders

Zonal Vice President for Matara, Muttukumaran expressed the same view.

In this case however, the police officer charged with murder, SSP Sheriff Dean wrote personally to the JSC seeking redress and a withdrawal of the magistrate's order. A request the JSC complied with when it ordered Judge Bandara to withdraw his warrant on Sheriff Dean.

Bandula Manawadu also rose and said he as a junior lawyer would like to know the procedure by which a suspect may appeal to the JSC against an order made by a judge.

Ikram Mohamed was asked to table the letter from the CJ, but he refused and not a single member of the Bar Council has to date been given a copy.

And while tempers raged and the meeting grew more vociferous it was decided to appoint a fact finding committee.

No probe

President's Counsels H. L. de Silva, Desmond Fernando, Ranjit Abeysuriya, Romesh de Silva and N. R. M. Daluwatte were nominated.

Later however, H. L. de Silva PC, declined to sit on the committee. Asked why he had made such a decision he said, "I don't think it was appropriate for me to participate in such a committee. I doubt I could make a proper contribution given the circumstances of the case... I have used my own discretion and decided not to sit." Beyond saying this, he refused to comment further.

Desmond Fernando PC, reiterated the point that he would continue to sit on the committee but asserted "there is nothing I can do until I get the documents."

He maintained that if the committee is to reach any conclusion it must be given the documents pertaining to the court proceedings, the letter written by Ikram Mohamed to the CJ, and Sarath N. Silva's response. "Otherwise we cannot report back to the Bar Council," Fernando said.

Following the Bar Council meeting Secretary Anoma Goonetilleke had sought an appointment from the CJ for a delegation from the Bar Association to meet with him, but the CJ declined showing displeasure at the development.

Up until Friday, October 15, almost a week since the stormy meeting, no member of the fact finding committee had been given any documents to begin a probe on whether the Bar Council was justified in its decision to discuss and take action on this issue.


Trading charges on tanks and rice

Six months into office, government ministers and President Chandrika Kumaratunga have begun finger pointing charges against each other.

On the one hand Kumaratunga has accused the JVP of violating the 13th Amendment to the 

Anura Dissanayake, Siripala Gamlath and Maithripala Sirisena

Constitution accusing them of resorting to illegal procedure with regard to the Marxists 10,000 tanks project.

 On the other, JVP's Agriculture Minister, Anura Kumara Dissanayake has charged the Deputy Marketing Development Minister as well as the brother of government Minister Maithripala Sirisena with manipulating the rice market leading to shortages and the resultant price rise.

The issue at hand is what the JVP who promised to uphold accountability and transparency in government intends to do about this situation.

No investigation

As far as the Commission to Investigate Allegations of Bribery and Corruption is concerned, Director General Piyasena Ranasinghe does not think there is sufficient material to kick-start a probe. He said the charges are mere allegations and lack concrete or comprehensive evidence to begin an investigation.

Ranasinghe was responding to a request received by him last week seeking an investigation both into the charges made by Kumaratunga as well as Dissanayake. He said files have been opened and the matters would be scrutinised by a legal officer who would then make recommendations on whether the cases warranted a thorough investigation. Having already perused the allegations Ranasinghe was however doubtful the statement by the JVP Minister would evolve into a full scale probe. "He has merely made an allegation - there is insufficient material to even consider beginning an investigation" Ranasinghe said. He was non committal on the President's statements with regard to the JVP's 10,000 tanks project.

The question is whether the Bribery Commission should record statements from both Dissanayake and the President to substantiate their allegations or simply sweep it under the carpet.

Not concerned

Anura Kumara Dissanayake last Sunday when addressing a gathering of farmers publicly slammed President Kumaratunga whom he referred to as "Loku Nona" and some of her ministers. He named Minister Maithripala Sirisena, accusing the Minister's brother Nipuna Sirisena and Siripala Gamlath who is deputy marketing development minister of masterminding a rice scam.

Nipuna Sirisena is owner of Nipuna Rice Mills which purchases paddy and produces rice.

The point is, if indeed the JVP and Dissanayake are genuinely concerned and have proof that both Sirisena's brother as well as a government servant namely, Siripala Gamlath, are engaged in some kind of rice scam then they must provide that evidence to the Bribery Commission and ensure a thorough probe is initiated. There is little point in making mere allegations and thereafter sweeping the issue under a carpet of subterfuge.

The JVP Minister at this meeting also went a step further. He made an even more serious charge against the President saying, "Loku Nonala (big madams) are spinning false allegations of corruption against the JVP and its programmes in order to cover up alleged acts of corruption by her own party men."

Dissanayake's wrath is as a result of the rising prices in rice as well as a decision by Consumer Affairs Minister Jeyaraj Fernandopulle to import rice from India and Pakistan.

Around March this year due to previous floods followed by a drought in the districts of Polonnaruwa and Anuradhapura, a shortage of rice was predicted. Official statistics at the time revealed the shortage would amount to a lack of approximately 500,000 metric tonnes.

This shortage continued up to October this year. Dissanayake and his counterparts in the JVP actively opposed the import of rice by the government. His opposition was based on protecting the farmers. But the fact is, the farmers had no stocks of paddy in hand to sell as it had all been bought for very low rates by the millers.

Controlling the market

Recently, UNP MP, Kabir Hashim charged that it was the millers who had held back a considerable amount of paddy and rice, in a bid to control the market.

The JVP Minister meantime had "inside" information which he revealed to the public last Sunday. He charged that a hidden interest lies within Nipuna Rice Mills in the way of Maithripala Sirisena's brother Nipuna as well as the Deputy Marketing Development Minister who he charged were engaged in a racket, controlling the paddy and rice produce from Anuradhapura, Polonnaruwa, and Amparai districts.

The second issue, this time pointing a finger of corruption at the Consumer Affairs Minister is that disregarding procedure Fernandopulle apparently authorised two state agencies, Markfed and Coopfed to individually select sellers in India and Pakistan and import rice in order to meet the shortage.

In a note to cabinet on October 5, Fernandopulle stated the government had decided to import 150,000 metric tonnes of rice free of import duty up to December 31 this year.

Sidelined

He states he has taken steps to import rice from Pakistan and India as an emergency measure to inject into the local market in order to stabilise prices. As a result he says he has obtained a bank guarantee for US$ 10 million to open Letters of Credit for this purpose from the Treasury. He has also negotiated with the People's Bank to open Letters of Credit upon the bank guarantee.

In his cabinet paper Fernandopulle explains how after negotiations with Pakistan the government ordered 2,000 metric tonnes of IRRI 6 Pakistani white raw rice at US$ 250 per metric tonne and 2,000 metric tonnes of Basmathi rice at US$ 350 per metric tonne from Mian Amin Trading Establishment in Pakistan.

Accordingly, the government he maintains has also made arrangements to import 1,000 mt of Ponni rice at US$ 285 per mt from Veera Exports Pvt. Ltd India. Another 1,000 mt Ponni rice also at US$ 285 per mt from Capro Connection India and 2,000 mt of Ponni Samba for US$ 289 per mt from Spices Trading Corp. Ltd., India.

From Omvishka Exports 1,000 mt at the rate of US$ 285 per ton of Ponni rice and another 1,000 mt of red rice from the same dealer for US$ 290 per mt, 2,000 mt from Bharath Exporters of Ponni Samba for US$ 283 per mt and 1,000 mt of IR 65 from Ananthamal Kasi for US$ 265 per mt.

The Private Sector Food Importers Association has since charged that they have been unfairly sidelined. They point out that in the past the CWE, called for open tender, by which all rice exporters from India, Pakistan and Vietnam would participate offering a performance bond. This time however Markfed and Coopfed were allowed by Fernandopulle to individually choose the Indian and Pakistani wholesalers and Letters of Credit opened in order to facilitate the arrival of the imports.

Commissions

As is typical in such transactions it is being whispered that multi million rupee commissions have oiled palms.

Kabir Hashim charges that not only Fernandopulle but even the JVP's Anura Kumara Dissanayake must be held accountable for this situation charging that by withholding rice imports over the last four months not only allowed local rice millers to capitalise on the shortage and thereby mark massive profits, but, also, the cost of a kilogram of rice today is astronomical as a result of the government botch, he said.

At present, prices have zoomed and a kilo of white raw rice is sold to the consumer for Rs. 32, white par boiled rice is Rs. 36 per kg, Samba is sold at Rs. 44 per kg, red raw rice is Rs. 42 per kg and red par boiled rice is Rs. 44 per kg.

- Frederica Jansz


Uniflow system - chaos and confusion

By Dharisha Bastians 

It was a Monday morning from hell last week - for pedestrians, commuters and motorists alike - with the traffic police deciding to implement the uniflow system on Galle Road and R. A. De Mel Mawatha with little or no prior notice to the public.

Effective Sunday (10), the stretch of Galle Road from Savoy junction in Wellawatte upto the Colpetty junction was made one way towards Colombo and R. A. De Mel Mawatha was made one way in the opposite direction all the way from the Liberty Plaza round about in Colpetty to Dharmarama Road in Wellawatte. Given that weekend traffic is minimal, things proceeded smoothly, but with the Monday morning school and office rush, hiccup after hiccup in the plan began to surface.

Going round in circles

Commuters were confused as to where bus stands had been shifted to and motorists went around in circles trying to get to work since the plan was not previously communicated to the public. Previously quiet bylanes were overnight transformed into three lane highways and shop owners on both roads complained that they had lost out on business because of parking problems. Vendor, H. B. Gunapala sells vegetables on R. A. De Mel Mawatha and has been doing so for 20 years now. He travels from Mount Lavinia to Bambalapitiya every day in a three wheeler with his produce.

"If this system comes into force permanently, it will be disastrous for shop owners and vendors in this area. I usually make about Rs. 2,000 a day, but that Monday I made less than Rs. 300. They didn't allow any vehicles to park so how were we to sell anything?" Gunapala complained. "I hope they abandon the idea," he added.

Utter chaos

Chaos reigned nearly all day Monday until police reverted to the normal system at about 6 p.m. On the upside however, several motorists commented that the system had resulted in reducing traffic congestion especially at 5 p.m. to a great degree. Most of them agreed that there were serious problems to be resolved before the plan could be properly implemented.

The one way system, which has been on the cards for some time now to reduce congestion on the two main roads during peak hours, was first put into practice on Sunday, October 3 and was due to be tried out for a period of one week. Studies conducted by the traffic police indicate that upto 20 minutes drive time can be saved during peak hours if the system is put in place.

No awareness

However, police officials say that since the awareness campaign had been insufficient and unsuccessful, they scrapped the one week plan until the problems encountered in putting the system into practice could be ironed out.

"It was necessary to put the system into practice to test it out; despite the studies it is only in practice that the weaknesses of the system can be identified and rectified," said Director, Traffic Administration and Road Safety, SSP Lucky Peiris. "The system involved a change of routine and habit, which understandably cannot be done overnight but we received both negative and positive feedback about the scheme," SSP Peiris added.

According to SSP Peiris, some of the problems identified during the experiment included the fact that the centre island on Galle Road made lane changing difficult. "There was also the volume of pedestrians on both sides of the roads and the alternate location of bus stops and of course the distance to the railway stations and things," SSP Peiris told The Sunday Leader.

Solutions

SSP Peiris believes that motorists and the general public need to be properly educated about the working of the uniflow system before the plan can be put into practice on a regular basis. "We need to use the electronic and print media to make people more aware, that was the problem with the trial, there was some confusion as to turn offs and things like that," Peiris said. He said that the aim of the exercise was to allow motorists to get to the city without delay, thereby minimising fuel consumption and stress for motorists. "We knew there would be problems, but anywhere in the world such experiments are carried out in order to make life better for the general public," Peiris asserted.

Asked if the completion of the Marine Drive highway would help to ease the traffic problem along the Galle Road, SSP Peiris said that the new road will be able to accommodate more vehicles and therefore would definitely improve the situation. He said that media reports had indicated that the project would soon be complete, adding that the traffic division was hopeful the new highway would ease the problems for motorists and commuters alike once it is commissioned.

"We apologise to the public if there was any inconvenience caused, but what the people must understand is that the police carried out this experiment in good faith. We will come up with improvements to the plan and implement them accordingly in the near future," SSP Peiris said. He said the assistance of the Road Development Authority, the Colombo Municipal Council and the Highways Ministry would be necessary to properly put the plan into action to actually find a permanent solution to the traffic problems on this route.

SSP Lafir's brain-child 

SSP City Traffic, Colombo Y. G. R. M. Lafir after extensive study came up with the uniflow traffic plan for Galle Road and R. A. De Mel Mawatha which runs parallel, which he says has worked fairly well when implemented in other parts of the city.

"The first one or two days there were always complaints and confusion. But as people got used to the system they realised how much smoother the traffic flow is and they have now totally adjusted," SSP Lafir told The Sunday Leader referring to how he streamlined traffic at the Pamankada and Saranankara junctions a few years ago.

During his study, SSP Lafir found that between 100,000 and 150,000 vehicles enter Colombo daily using the Galle Road/R.A. De Mel Mawatha route. If the roads were made one way on a particular stretch, SSP Lafir found that upto 20 minutes of driving time could be saved, because congestion would be greatly eased. If implemented, the uniflow system would also ensure that pedestrians only cross the road at pedestrian crossings because otherwise, the constant flow of traffic would make sporadic crossing extremely dangerous, the study found. The system would also allow for six lanes on each route to deal with peak hour traffic. "In as far as the working population is concerned, the saving of 15-20 minutes a day will undoubtedly make a positive contribution towards the overall economy of this country in addition to minimising wear and tear on motor vehicles" the report says.

"The failure of course was the inability to properly educate the public, especially motorists about the system," SSP Lafir acknowledged. However, he said that many people who had understood the benefits of the scheme properly being put in to effect had urged the traffic police to continue with its implementation. "Some of them, especially business owners and corporations even offered to put up overhead crossings and erect bus halts at their own cost to assist in the plans successful implementation," Lafir added.

He said that the problem the traffic police was facing in terms of education of the public was that no amount of theoretical explanation will be sufficient to give them an idea about what happens on the ground. "Even though we showed them maps and gave them thorough explanations and leaflets, very few comprehended the system like that," he said. Lafir also added that although there had been several complaints from merchants along the route that their businesses had been affected, the police had in fact made special provisions for parking space to be allocated on by lanes just as was the case previously.

What we need to understand is that in the last 10 years, the number of motor vehicles in this country has more than doubled. But our road systems have not kept up with that growth. Eighty per cent of all these vehicles enter Colombo daily, so we have to find a solution to this and the uniflow system, once properly put in place will be very efficient," SSP Lafir reiterated.

According to statistics, in 1993 there were 1 million vehicles in the country, and by 2003 the number had swelled to 2.3 million, Lafir said.


No plans for toll introduction yet - Transport Minister

Transport Minister Felix Perera last week scotched rumours about the introduction of a toll system for containers entering the city of Colombo, saying that a decision on the matter had not been made as yet. Speaking to The Sunday Leader the Minister said that however there were several proposals put forward by experts and consultants to bring containers into the city using the railway network in order to ease congestion. "However the Ministry of Transport has not yet discussed the matter and we are yet to make a decision about this," Perera added.


Public feedback

Everyone had an opinion about Monday's traffic experiment and many of them agreed that it had not significantly eased congestion on the streets during peak hours. The general opinion among merchants in the affected area in particular was that they strongly opposed making the scheme permanent. Motorists complained that fuel consumption had been higher that day because they found themselves going around in circles and three wheelers hiked up their fares inconveniencing the general public. The Sunday Leader spoke to several people who found that their business and daily activity was affected by last Monday's uniflow trial. Following are excerpts:

Wickrema, Three wheel driver, Bambalapitiya:

"It was a real mess in the morning because people had no idea where the new bus halts were and motorists were confused but in the evening something we noticed was that traffic congestion was significantly less than usual on Galle Road. We were affected in the morning because our three wheeler stand is situated in the spot that the new bus halt was to be, but I think that if the parking problems and things can be worked out it will be a good system."

Proprietor, Charlie's Mini Market, Bambalapitiya, Lisa Perera:

"Monday's traffic system affected us big time. There were customers coming here, being unable to park and turning away. As a result we had much lower sales. To add to this, the noise and congestion even on the by-lanes was terrible. Even if the police provides parking facilities for customers I don't think the one way system is a very good idea because the lack of pavements and excessive congestion would still deter customers."

Manager, Fresh Fish, R. A. De Mel Mawatha, Dharmasiri Gunesekera:

"We usually have about 300 customers a day. On Monday, we had less than 50 people coming into the shop. Usually we stay open till about 6:30 p.m. but because of poor sales we just closed at about 4:30 p.m. It was a huge problem for us. There were two police constables here conducting traffic and they were not allowing people to stop near our shop. I think the system would be alright as long as they provide parking for people. But we did see a lot of congestion in the early hours of the day."


School children stranded

The one-way system introduced on Sunday hit the bottom within a day as it had not only inconvenienced and confused the public, but people were also of the view that a lot of fuel had been wasted through unwanted rounds around Galle Road and Duplication Road.

School children had also been delayed to attend their schools, as van drivers had been confused as to which roads were accessible. After school hours, many little children had been missing as the school entrances had been changed which led to a chaotic situation amongst the van drivers, parents and teachers.

According to a school van driver, the day had been so confusing for the little kids that an 11 year old school boy had suddenly become panicky when his school van had not arrived on time. "When he finally saw the van, across the road, he crossed the road ignoring the speeding vehicles. Luckily the boy received only minor injuries when a three wheeler hit him but if the police continue with this system, it will not only be dangerous for the children but it will also be dangerous for drivers and pedestrians," he warned.

When The Sunday Leader visited the streets, this is what the general public had to say... 

By Jamila Najmuddin 

A. Yogaraja (Wellawatte)

"The one way system which was introduced on Sunday left the public 'clueless' and confused. Although there had been a lot of excitement that such a system would be introduced, the police had not informed the public that it would be on Sunday. Suddenly on Sunday morning when people stepped out onto the Galle Road and Duplication Road, it was extremely confusing as we did not know which by-lanes to turn from. The entire day was chaotic and it was further chaotic on Monday - being the first day of the week.

"Even though cars were allowed to travel only one way on Galle Road, there were a few vehicles coming from the opposite direction, which was dangerous. Such a system is not viable for such small roads."

M. Fazeel (Bambalapitiya)

"Although the one way system was introduced by the police to ease congestion on Galle Road and Duplication Road during peak hours, traffic only increased and people were confused. On Sunday, although there were cops standing at every bylane and on the main roads directing the people, this served no purpose, as people still remained unaware. There were many accidents and school kids were also harassed and although the police introduced this system in good faith, it's a pity that it is not viable on our roads." 

Jehan Rajendram (Bambalapitiya)

"Although a Sri Lankan, I have been living in the United States for 15 years. Although this system was introduced to ease congestion especially during peak hours, what the cops have to realise is that our roads are too small and the distance is too short. In the US, this system is practiced only on the highways and the 'wide' main roads. Our roads are too narrow for such a system." 

Manel Perera (Wellawatte)

"If this system had been organised in a proper manner, then maybe it would have been successful. Although the media had been informing the public that the police would be introducing such a system, what the police had forgotten was to inform the public about the specific date and educating the public about the system, beforehand. When we stepped out on Sunday morning, everything was 'haywire' on the two main roads. The public needs at least a week to get used to such a system and maybe if the police had continued with the system, the people would have been used to it by now." 

Lilian Fernando (Wellawatte)

"This system caused a lot of inconvenience as people were confused, school children had been delayed and people had been late to reach their offices. Traffic had only increased and the congestion near St. Peter's College and the Colpetty Junction (where the system ended) was unbearable on Monday. There were many accidents, a few school children had been missing and the public had only been harassed. If the police had educated the public beforehand then maybe the system would have been successful."

The Sunday Leader also visited a few people who had been overly inconvenienced by the system as they had been the victims of minor accidents. 

Ashoka Jayasundera:

"When I stepped onto the Galle Road on Sunday morning, I did not know which roads to take to get to the Duplication Road. Although there were many police personnel on the streets to guide the public, suddenly I saw a car speeding at me from the opposite direction. Obviously this man had not been informed about the one-way system or he had just not been able to adjust to it. Although he and I both received only minor injuries our vehicles were damaged. When questioned by the cops as to what he was doing traveling on the opposite direction, he just gave the cops a confused look which said it all." 

Nimal Vitharana:

"Obviously with the chaos on the roads on Sunday and Monday and with the number of accidents, its obvious that our people cannot adjust to such a system. It was introduced in good faith but what the cops have to realise is that this is too complicated for our people." 

Organiser, School Service Society, J. Waidyaratne:

"This system was introduced without informing the public and when we started our work in picking and dropping the children on Monday morning, we were so confused that we did not know which routes to take. We were finally able to drop the children to school by 8.45 a.m. and in the afternoon, when picking the kids, we had to make several rounds as we were not able to park on Duplication Road. We had to make rounds to pick up each child and on Monday alone, I spent more than Rs. 500 on diesel."


Anti-Indian sentiment over BPC entrance

The two existing players in the petroleum sector - CPC and IOC
and Treasury Secretary, Dr. P.B. Jayasundera

By Mandana Ismail Abeywickrema 

Although the government of Sri Lanka has still not finalised details  with regard to a third player in the petroleum sector, the entrance of Bharath Petroleum Corporation (BPC) - yet another company owned by the government of India - has created anti-Indian sentiments among Sri Lankans.

The Indian government too has expressed concern over the matter as it  too does not wish to antagonise Sri Lankans while the Ceylon Petroleum Corporation (CPC) has expressed concern that bringing in a third player also from India would wipe out CPC from the local petroleum market for good.

Third player

However, the entrance of a third player to the country's petroleum market is inevitable as the tripartite agreement signed between the government of Sri Lanka, Indian Oil Corporation (IOC) and CPC stipulates the market would, in the first few years, be limited to three players.

The previous administration  when looking at sectors for liberalisation identified the petroleum sector and decided to break the monopoly in the market by bringing in a second player and then a third player later on. The matter was overseen  by the Public Interest Programme Unit (PIPU) under the Economic Reforms Ministry.

The unit, after analysing the pros and cons of the matter, decided it to be a politically strategic move to introduce IOC to the local petroleum market, which till then was monopolised by CPC. Leasing the oil tank farm in Trincomalee to the Indians was made in order to provide the necessary security to the location as an Indian presence would ensure its safety.

Former team leader, PIPU, Lakshman Siriwardena explained to The Sunday Leader that bringing in IOC to the country while liberalising the petroleum market created a competitive environment and also solved the problems related to a single monopoly in the field.

Siriwardena went on to say that unlike the earlier liberalisations - Sri Lanka Telecom (SLT), Shell and SriLankan Airlines - bringing in a second player and then a third player to the petroleum market was done in accordance to a clear plan.

He pointed out there was no exclusivity as the tripartite agreement outlined the sector would be limited to three players for the first five years, after which it would be an open market.

Tripartite agreement

The agreement states "and whereas recognising the fact that the total retail market size of Sri Lanka is not large enough to accommodate too many players to operate in the petroleum sector, GOSL has decided to initially restrict the number of participants in the petroleum sector to three players for an initial period of five years from the date of this agreement, consisting of CPC, LIOC and another to be identified in the future."

The PIPU, apart from introducing broad sectoral reforms, also intended to introduce a multi sector regulatory commission - Public Utilities Commission of Sri Lanka - which would be the regulatory authority for several fields including petroleum and electricity.

Siriwardena pointed out it was the intention of the PIPU to give priority to introduce the legal framework simultaneously with the introduction of other players to various sectors.

He further observed that duopoly, which is the present scenario with regard to the petroleum sector, is definitely worse than monopoly.

According to Siriwardena, PIPU was looking at introducing a regional player as the third player, adding that Sinopec would have been the ideal option. The ultimate goal with regard to the petroleum sector of  the UNF government  was to open the market and keep the pricing formula among other decisive factors with the Public Utilities Commission.

In such a scenario, providing subsidies too would be possible as it would subsidise the product and not an entity as a whole.

No regulatory authority

Siriwardena observed that the new Petroleum Reforms Act, which empowers the Public Utilities Commission to perform as a regulator to the sector, which was approved by the previous cabinet, is still with the legal draftsman thereby leaving the present petroleum market without a proper regulatory authority.

However, it is under such circumstances that the Sri Lanka government now plans to bring in a third player also from India and most of all yet another state-owned institution.

After calling for bid bonds, three interested parties were short listed during the UNF adminstration - Sinopec from China, Hindustan Oil Corporation from India and PBC also from India - with Sinopec being the highest bidder.

With the change of government and policy in April this year, Sinopec withdrew leaving Hindustan and BPC from India in the race. Although bringing in a third player into the petroleum market would be good for the CPC, bringing in another state-owned player from the same country as LIOC would be detrimental to CPC's existence.

If the government decides to bring in BPC as the third player to the market, it would instead of creating a competitive environment, create a battle of two against one. However, a third player from a private sector company would benefit the country's petroleum sector as it would create an equal playing field for all players, including CPC.

Monopoly

It is also interesting to note that in case the government decides to bring in BPC to the country's petroleum market, it too would have the trademark of the three key privatisation deals done earlier - SriLankan Airlines, Sri Lanka Telecom and gas - exclusivity.

In some instances, the agreements have undermined the functions of regulators in the respective fields.

The telecommunication sector was one such example where for five years, NTT - the main stakeholder of SLT - was monopolising the IDD sector leaving the Telecommunications Regulatory Commission (TRC) helpless. In such a scenario, if BPC is given the green light to become the third player in the local petroleum market, economists fear that Indian-owned monopolies would strangle the Sri Lankan market. 

Oil exploration: India requests preference

Treasury Secretary, Dr. P.B. Jayasundera denied the rumour the government of Sri Lanka in a bid to secure the US$ 150 million Indian line of credit has offered the country's oil exploration sites to them. However, Dr. Jayasundera pointed out the Indians have requested the Sri Lankan government to give preference to them when calling for bidders to work on the sites.


CPC Chairman's views

CPC Chairman, Jaliya Medagama noted there was still no problem of a third player entering the market as the President has suspended the issue after speaking to the CPC trade unions who were up in arms against bringing a third player to the petroleum sector.

When asked about the clause in the agreement between IOC, CPC and the government of Sri Lanka which states the country's petroleum market would initially be opened for three players, Medagama maintained there would be no doubt on the matter as the Treasury would hold on to its one third share.

As for the position of IOC in such an event since the government of Sri Lanka holds two thirds of the share, preventing equal competition, Medagama said the agreement does not categorically mention that the third player would have to be a private sector company.

However, he observed in the event the government decides to bring in a third player, then CPC would have to think of strategic ways of improving its position in the market.


"Yet to decide" - Dr. P.B. Jayasundera

The government is yet to decide on whether to give one third of the petroleum market to BPC. Treasury Secretary, Dr. P. B. Jayasundera told The Sunday Leader the government has not made any agreement with the Indian government in this regard.

However, Dr. Jayasundera pointed out that according to the tripartite agreement between IOC, CPC and the GOSL, the market would be opened to three equal players, adding that under the present circumstances, LIOC is against the Sri Lanka government as the CPC owns one third with the other being held by the Treasury.

He also noted that Indians have shown concern over the anti-Indian sentiment building in the country.

Dr. Jayasundera observed the entrance of a third player would not change the terminal value. When asked as to why the highest bidder, Sinopec, withdrew at the last minute, Dr. Jayasundera said the party when discussing the matter with the new government did not wish to continue as the government had by then decided to keep 51% of the terminal ownership with it.

The second and third highest bidders - Hindustan Oil and BPC - held back. The government was then holding discussions with BPC, when CPC trade unions were up in arms against the matter, adding that they could forward a better alternate proposal.

Dr. Jayasundera asserted that while the proposals were forwarded by the trade unions, they have been now sent to the Strategic Enterprise Management Agency (SEMA), under whose purview the CPC is functioning at present. Explaining further, Dr. Jayasundera observed the government has to maintain cordial relations with the bidders, adding that if not the country would run the risk of not receiving any bidders for future tenders.

When asked about the danger in bringing in a third player without forming a regulator, the the Public Utilities Commission, which would be the regulator for electricity and fuel, Dr. Jayasundera pointed out that to formulate such a regulator one has to look at several aspects such as legal framework and capacity building.

He went on to say although it would be ideal to have the necessary regulations in place before bringing in a market player, it would also not be practical to hold on to a deal merely to formulate the regulation. However, Dr. Jayasundera observed in case the necessary regulation is not in place, the important issues could be included in the respective shareholder agreements.

He pointed out that when gas was privatised in 1995, it was agreed to introduce a regulator within five years, but that has failed to materialise to date. As for the risk of bringing in a third player also owned by the Indian government, Dr. Jayasundera said there would be no problem except if BPC and IOC decides to merge.

Keeping in mind such an event, Dr. Jayasundera said the government would then include a clause in the agreement outlining the necessity of the Indian government to first consult the government of Sri Lanka before taking any such decision.

When asked of the possibility of two Indian players strangling CPC, Dr. Jayasundera said it would not be the case as CPC would have to compete with all players and vice versa.

He went on to say CPC should be restructured in order to be a strong competitor.


A Swiss telegram

The visit of a prominent foreign dignitary to Sri Lanka went largely unnoticed, specifically because her tour was not given much publicity. Swiss Foreign Minister, Micheline Calmey-Rey arrived in Colombo last week and the reasons behind the virtual media blackout of her visit are only just coming to light.

A LTTE delegation headed by the LTTE's Political Wing Head, S.P. Tamilselvan is currently in Switzerland. He held extensive discussions there with the LTTE's constitutional council about the future of the peace process. Soon after this meeting, Tamilselvan and the rest of the delegation held talks with Swiss government officials and informed them of the Tigers' stance on the peace process.

Calmey-Rey arrived in Sri Lanka last week armed with this message and met with the President, Prime Minister, Foreign Minister and several other officials from NGOs. She informed government officials that the LTTE was rigid on its position regarding the ISGA proposals and that the LTTE would only commence negotiations based on the ISGA. The unique feature of her message was the rebels' latest position that they would not accept any alternate proposals either.

With peace talks already stalled, this latest message indicated even further delays and stalemates. The government for its part informed the Swiss Foreign Minister that it was ready to start peace talks. But well armed to counter the government's claims, Calmey-Rey informed the government about the allegations by the LTTE that the government was in fact postponing peace talks.

At her meeting with Foreign Minister Lakshman Kadirgamar, Calmey-Rey asked him whether the government had a unified position on policy and although Kadirgamar tried to explain away the situation at first, he was eventually compelled to admit to differences.

"Yes, there are problems," he said. Responding to this, Calmey Rey said, "The ball is in your court. You have to decide whether you will throw it in the direction of the LTTE or not. It is therefore up to the government to decide what it wants to do."

She also advised Kadirgamar not to treat the ceasefire agreement as a joke. "From discussions with both parties we can see that the ceasefire is in jeopardy. Please do everything you can to make sure it stays in force," Calmey Rey appealed. 

JVP time bomb 

Last Tuesday a deputy minister representing the Kandy District arrived to meet the President. He detailed at the meeting how the Media Ministry which was functioning under Minister Mangala Samaraweera was pursuing the JVP's agenda. He also informed Kumaratunga about a certain programme that had been telecast over the Independent Television Network (ITN).

The deputy minister said that during a documentary about the granting of jobs to unemployed graduates, one frame had been a shot of young people clad in red shirts shouting, "We got all this because of our fight." He said that the programme to grant jobs to 17,000 graduates which is one of the President's best projects was being portrayed as being an achievement of the JVP as a result of the ITN telecast, the deputy minister charged.

He said that although he had not seen the programme himself, several of his supporters had described it to him and added that he had come to see the President that day specifically to make sure she got the tape of the documentary down and viewed it.

Having heard this tirade, an incensed President Kumaratunga immediately called ITN Chairman, Newton Gooneratne and demanded whether the ITN now dances to the tune of the JVP. "I don't know what these people in the Media Ministry are doing. Was the documentary given to you by that Ruwan Ferdinandez who works for Mangala?" she asked. Gooneratne denied this saying, "No, it was Deputy Finance Minister, Ranjith Siyambalapitiya who approved it." He added that the screen play had been written by K.B. Herath.

But not satisfied with that explanation, Kumaratunga continued to blast Gooneratne and demanded a detailed report about the programme be submitted to her. Gooneratne however maintains the President spoke to him about other programmes and not on issues relating to the JVP. 

CWC's woes

One item on the cabinet agenda last week was a paper submitted by CWC MP Muthu Sivalingam on the Soumayamoorthi Thondaman Foundation. The cabinet paper was requesting for three state institutions and a piece of state owned land. But the President did not look on any of these requests very favourably.

"There is no way we can do that. We can't just hand over three state institutions and land for someone's foundation," she argued, adding "I also have great respect for Mr. Soumyamoorthi Thondaman, he has done a great service for estate workers and I am in no way opposed to the setting up of the foundation but I can't approve the setting up of such things using government funds."

Responding, Sivalingam pointed out that the foundation was being set up with the intention of providing education and training to estate workers. The President accepted these reasons but said that she doubted whether the Attorney General would grant approval for the project.

Unhappy about this situation, Sivalingam then raised another point. He said that he was always opposed to the Upper Kotmale Hydro Power project and continued to be against its implementation.

"But our positions are not relevant to the government. I am also a member of the committee set up to amend the proposals for the project and the committee has met several times now. However, I haven't been summoned for a single meeting. Is this how you treat our people?" he lamented.

President Kumaratunga apologised to the CWC MP about this sidelining and said she would take action against those responsible for this. She added however that there was no way the Upper Kotmale project could be suspended.

"Don't misunderstand. The Upper Kotmale project can't be stopped. If it is, aid flow will also cease. Our biggest problem at the moment is donor funds. But I will take action against those responsible for this injustice to you and I will dissolve that committee. And in its place I will set up another committee to be chaired by you," Kumaratunga said. 

UNPers grievances

The UNP decided to appoint a ministerial group and deputy ministerial group from within its own ranks to monitor the activities of each of the government ministries shortly before Opposition Leader, Ranil Wickremesinghe took wing to India on an official visit.

But the moves led to some amount of conflict within the UNP itself. MP S.B. Dissanayake who was irked at not being assigned the Samurdhi and Agriculture Ministry, which were his subjects during the previous regime and being assigned the Post and Telecommunications Ministry instead, immediately went to meet the Opposition Leader to air his grievances.

However, he had to meet Opposition Whip Mahinda Samarasinghe instead, who had also assisted in the assigning of ministries.  "I don't want Post and Telecommunications. You keep that ministry, I'll just go on with what I was doing," Dissanayake complained. Samarasinghe urged Dissanayake to remain calm and try to find a solution to the problem. He explained that the assignments were merely to better supervise parliamentary activity and promised to convey Dissanayake's position to Wickremesinghe.

"We just organised this system to better coordinate parliamentary affairs and we only gave you this ministry because we know you have much bigger tasks to carry out. If you don't like the assignment, just speak to MP Ravindra Samaraweera who has got the Samurdhi Ministry and exchange it with him," Samarasinghe advised. Accordingly, Dissanayake made the necessary amendments to the assignments and kept the MP informed.

But soon after this, MP Milinda Moragoda too met Wickremesinghe to air similar grievances. He was complaining that he had been assigned the Science and Technology Ministry when all he wanted was the Buddha Sasana Ministry, adding that this had been done to undermine him.

Moragoda told the UNP Leader that if his service to the party was going to be degraded, he should be relieved of all responsibilities currently handed over to him. Wickremesinghe then spoke to Samarasinghe and asked him to suspend the alternate ministerial committee idea for the moment. 

Cost of living

The cost of living was another key topic at the cabinet meeting last week. Ministers discussed this matter at length, but the President maintained that there was very little that could be done in the face of escalating global oil prices. "We have to reduce the cost of living. But please suggest things that we can actually do," Kumaratunga urged.  Samurdhi Minister, Pavithra Wanniaarachi also submitted a cabinet paper recommending that an additional Rs. 5 million be added to the Samurdhi Fund in the budget to help Samurdhi beneficiaries to cope with the cost of living. But again, the President shot the suggestion down saying, "This can't be done. Enough of giving subsidies and relief. We never said that we would increase the Samurdhi amount."

She asked the ministers whether all they thought about was granting further subsidies and whether they didn't think of development plans at all. "The government does not have money to grant subsidies. People know that. So people will not protest. If I grant approval for this today, tomorrow I will get another proposal," the President said.

 


©Leader Publication (Pvt) Ltd.
1st Floor, Colombo Commercial Building., 121, Sir James Peiris Mawatha., Colombo 2
Tel : +94-75-365891,2 Fax : +94-75-365891
email :
editor@thesundayleader.lk

 

 

lsdlfkdlfkjjkakskfkd