military groups and CFA in the balance
there is one single aspect of the peace process by which
international facilitators and the Sri Lankan government could
be seriously faulted it would be that it has failed -
the port's computer deal
tax takes toll on importers
and sugar deals raise eyebrows
military groups and CFA in the balance
Commander Lt. Gen. Shantha Kottegoda, Velupillai Pirapaharan
and Karuna Amman
there is one single aspect of the peace process by which
international facilitators and the Sri Lankan government could
be seriously faulted it would be that it has failed -
collectively - to clamp down on extra judicial killings
carried out by both the LTTE and para military groups or, so
the Karuna faction.
LTTE is today charging that auxiliary forces under the pay of
the Sri Lanka military are guilty of killing over 60 LTTE
cadres in these last six months.
LTTE cadres are being killed perhaps is true. That they are
being killed by special forces secretly employed and trained
by government forces is debatable. Available evidence proves
that Karuna loyalists appear to have been engaged in a silent
but deadly war against LTTE cadres. And vice versa.
giving credence to the LTTE claim would be premature by far,
the fact however is that cadres attached to the Eelam People's
Democratic Party (EPDP) are publicly seen in Colombo carrying
weapons. Not only do they carry guns they have also been known
to threaten members of the public with these weapons.
Commander Lt. Gen. Shantha Kottegoda, said he is unaware if EPDP
members are on any government payroll, but reiterated that the army
has been over a period of time "feeding these people and giving
them rations." Gen.
Kottegoda said the army compensates cadres in this manner from the
EPDP, EPRLF (Perumal faction) and PLOTE as they have been, and are
used as informants. (See box for army chief's comments)
Gen. Kottegoda denied the army continues to use para military forces
to target and kill LTTE cadres. "This is an accusation the LTTE
makes," Kottegoda said, adding however that if indeed over 60
Tiger cadres have been killed this last six months "it is due
to Karuna loyalists carrying out an internecine war," he said.
for the sake of argument, the LTTE accusation in relation to para
military forces carries any truth, what cannot be ignored is that
the LTTE, from the very inception of the ceasefire in February 2002,
have also never called a halt to extra judicial killings. The Tamil
Tigers have continued to target and kill intelligence operatives as
well as Tamil people identified to be lending information to
government forces and Tamil political opponents.
reality is that the LTTE did not begin killing Tamil political
opponents and informants as a kind of tit for tat when some of their
cadres were apparently targeted and killed. The Tamil Tigers have
systematically and mercilessly been wiping out Tamil opponents
including members of the EPDP, the Varathan group, Saba group and
the PLOTE Mohan Group. These murders have been going on before and
after the signing of the ceasefire agreement in 2002. Neither the
then United National Front (UNF) government, nor Norwegian
facilitators nor for that matter Scandinavian peace monitors have
had the courage or the moral and social integrity to call a halt to
these diabolical killings and say enough is enough.
peace monitors and facilitators lamely proclaim that these murders
come under the jurisdiction of the law enforcement authorities - and
that is that. No effort has been made to halt the Tigers in their
in this pre negotiation period, the government should perhaps first
consider how it would be possible to even negotiate terms and
conditions laid down by the Tigers for an Interim Self Governing
Authority (ISGA) - one that would mean passing on the powers of
governance to the LTTE when they have proved they are incapable of
conforming to any form of democratic principles of governance given
their high level of intolerance towards political opponents.
all, whatever the faults the UPFA may have it does not go around
taking pot shots at opposition political party members. If it did,
half the UNF would be dead. As, history records, are members of the
EPDP, EPRLF and TELO. And their members have been killed - brutally
- all because these Tamil groups dared to oppose the policies of the
the Karuna-LTTE clashes, from March to September 2004, there have
been 78 murders. Over 60 are identified to be LTTE cadres and some
civilians. Most of these murders took place within government
LTTE continues to insist that eight para military groups are working
for the Sri Lanka Army. They claim they are the Razik Group, the
PLOTE Mohan Group, EPDP, PLOTE, EPRLF - Varathan Wing, Varathan
Group, Saba Group and TELO. The Army Commander confirmed that these
groups did work with government forces, but have subsequently been
enlisted as soldiers. At least those that escaped assassination by
LTTE claims and sources based in Batticaloa also claim that the
"current position" of the Razik group is that it is
operating as a para military outfit directly under the Sri Lanka
Army. However, Lt. Gen. Kottegoda said members of the Razik group
have now enlisted with the Sri Lanka Army. Therefore, they wear
military uniforms, carry weapons publicly and similar to any other
soldier they are paid a monthly salary for their services.
PLOTE Mohan Group has been identified by the LTTE as operating
directly under the Directorate of Military Intelligence (DMI). This
group consisted of some PLOTE cadres who originally broke away from
LTTE ranks. They used to operate from four different places in
Batticaloa. One at Siripala Building in Batticaloa town, another at
Palpody Company which was formerly Sam Thambimuttu's residence in
Batticaloa, also at the SL Army's 233 Brigade Headquarters in
Batticaloa, and from the army camp in Paper Mill, Valachchenai.
is alleged that the members of this group openly carry weapons and
that security protection is provided to their families on request.
That they constitute part of the Army's Long Range Reconnaissance
Patrol (LRRP) and are called 'Deep Penetration Commandos.' One 'Paneer'
has been identified as being in charge of the activities of the
group since PLOTE Mohan himself was gunned down in July this year in
Colombo outside the House of Fashion. PLOTE Mohan was unarmed at the
time he was murdered.
Kandiah Yogarajah from Kannakudah, PLOTE Mohan became a Sri Lanka
Army informer in 1989. In 1990 the DMI setup its office at the
Batticaloa prison and began operations. This group is believed to
have made successful infiltrations into LTTE territory and carried
out several ambushes against LTTE cadres. There is speculation that
later PLOTE Mohan was brought to Colombo and put in charge of
counter insurgency activities. This group consisted of members
carrying names such as Kuyilan, Saleem, Niththy and Cashiyar. In
2000, Niththy together with some other members of the group were
killed in front of the Siripala Building in Batticaloa in a suicide
attack carried out by the LTTE. Later Cashiyar was also killed after
the ceasefire agreement came into being. PLOTE Mohan himself fell
victim to the LTTE's pistol gang on July 31, 2004, and his deputy,
Ramesh suffered the same fate on August 28, 2004.
Gen. Kottegoda said PLOTE Mohan was indeed an army informant. As to
the other members of this group he said even as Army Chief he is not
aware of other names as it was the DMI that handled this group.
Army Chief says he is also not aware if members of the EPDP are on a
government pay roll. "As far as I know we only give some of
their cadres in the east rations," he said.
we reliably learn that members of the EPDP are indeed on government
payrolls - the Defence Ministry pays a monthly remuneration package
to certain EPDP members, the payments are classified as being made
for homeguards. The LTTE has long claimed that the EPDP works
alongside government forces. The Tigers charge the EPDP is very
strong in Batticaloa and have considerable financial backing.
LTTE has accused the EPDP of carrying out psychological operations
against the Tamil Tigers. That
they conduct poster campaigns, and a broadcasting radio service from
their offices. The LTTE maintains that the EPDP carries weapons
openly and supports the Sri Lanka Army. That all members of the EPDP
are considered as para military members of government forces.
person known as Viji who was in charge of EPDP cadres in Batticaloa
was killed by the LTTE during the ceasefire agreement. Other senior
cadres of the EPDP have also been killed during this period.
is alleged that PLOTE, which is separate to the PLOTE Mohan group,
continues to have a presence in Batticaloa and are armed, working
alongside government forces. The factual position is the PLOTE
movement began to have connections with Sri Lankan security forces
during August of 1987. During the IPKF period PLOTE leaders like Uma
Maheswaran, Vasudeva, Sivaram, Manikkathasan, Kannan and Subash had
a series of discussions with then National Security Minister Lalith
Athulathmudali and agreed PLOTE would operate jointly with Sri
Lankan security forces. They established camps in Colombo and areas
in the south and were trained by the Sri Lanka Army.
they established camps in Vavuniya under the leadership of
Manikkathasan. They also established camps in Batticaloa under the
leadership of Vasudeva, Kannan and Subash. After the IPKF left Sri
Lanka PLOTE actively assisted government forces in conducting
interrogations, ambushes and roundups. PLOTE has contested elections
under the name Eelam People's Democratic Liberation Front.
Gen. Kottegoda confirmed the army hands out rations to members of
the PLOTE group.
EPRLF Varathan Wing also continue to have an armed presence in
Batticaloa. They have a camp at Lake Road, Batticaloa. After 1992,
the EPRLF established their offices in Batticaloa and began to work
jointly with government security forces.
the Varathan group, an arm of Tamil Eelam Liberation Organisation (TELO)
was also absorbed by the military. Varathan, a hardcore cadre
attached to TELO, was later enlisted by the army. Varathan, together
with two of his brothers and some other TELO members operated out of
the Arayampathy army camp in Batticaloa. The LTTE claims that this
group assassinated many LTTE cadres and sympathisers in the
the ceasefire period, Varathan and his brother were killed by the
LTTE's pistol gang. One brother was seriously wounded in a shoot-out
and crippled. Subsequently, Varathan's followers were also murdered.
One by one, by the LTTE's feared pistol gangs. All these murders
were after the ceasefire was implemented in February 2002. The group
is now completely defunct.
group known as the Saba group was also wiped out by the Tamil
Tigers. Identified by the LTTE to be also working as a para military
group with government forces they were targeted and killed by the
LTTE during the ceasefire period. Saba himself was first taken in by
the Tigers held in their custody for sometime and brought back later
to Batticaloa where he was executed. Other members were also killed
and the Saba group is no more in existence.
these killings continue is a gross violation of the ceasefire
agreement. Head, Government Peace Secretariat, Jayantha Dhanapala
maintains that he is not aware if indeed auxiliary forces are still
in operation. He says there is no proof but that this is a constant
complaint made by the LTTE.
the available evidence the fact remains the LTTE has hardly cause to
complain. It's a case typical to that of the pot calling the kettle
black. This then surely, is political duplicity of the worst kind -
from both sides.
number of army intelligence operatives have not been
Commander, Lt. Gen. Shantha Kottegoda said contrary to
reports, a large number of special forces intelligence
operatives have not been killed by the LTTE. The factual
position is that a total of seven army and police special
forces intelligence operatives have been killed by the LTTE
since the signing of the ceasefire agreement.
know that after the safe house at Athurugiriya was exposed
there was a perception that as a result, intelligence
operatives were identified and assassinated - but this is not
factually correct," the Army Chief said.
another 25 civilians, according to military statistics
comprising of both Tamils and Muslims have also been murdered
since the ceasefire came into being. They have been
assassinated after being identified by the LTTE to be serving
the military as informants.
on LTTE cadres being killed in recent months, Lt. Gen.
Kottegoda said "the LTTE is trying to blame us - but
these killings have been carried out by Karuna
loyalists." He said even the murders "at a Kottawa
safe house - the army had nothing to do with." The Army
Chief maintains that a Sinhala man killed with the others at
this house was by choice working with this group who were all
added that the LTTE has now realised "they cannot resolve
this situation and that they are unable to move freely within
their so called controlled areas due to the Karuna faction
still operating in these areas in the east. This is why they
are now trying to blame us," he said. "As much as
the LTTE claims to have lost over 60 cadres the Karuna faction
has also lost 30 to 40 people," he maintained.
insists the army is not using auxiliary forces to kill LTTE
cadres. He says the killings are all as a result of the split
with Karuna and are being carried out by pro Karuna loyalists.
if he believes the murders will stop he said the army has
brought it to the attention of the SLMM but "this, after
all, is a terrorist group," he said, not sounding
optimistic that they can be counted on to cease the brutal
assassinations. "I think it will take some time since
Karuna's people are still in the area," he said.
if the army is glad Karuna loyalists are eliminating LTTE
cadres, the Army Chief responded, "I won't say killing
each other is a good thing. If the LTTE cannot get a foothold
in the Eastern Province and the people of the area also don't
want the Wanni cadres don't you think this is a
disadvantageous position for Pirapaharan? He wants to project
himself as being the sole representative of the Tamil people
in the entire north and east. So, if the LTTE does not have
control in the east, but some other party gains control it's
not an advantageous position for him. The point is that the
LTTE must realise they will never get what they want by
fighting - by war. Only a political solution can resolve this
speaking in true military style, Lt. Gen. Kottegoda said,
"they thought they could defeat us. I think now we are
the port's computer deal
government may cancel the awarding of a US$ 9.4 million contract to
a Japanese computer firm after Sri Lanka Ports Authority Chief (SLPA)
insisted the deal is too expensive and unsuitable for the SLPA
whilst at the same time identifying suitable suppliers.
new computer terminal management system is to be purchased to
service the Jaya Container Terminal (JCT) and the North Pier
Development Project at the Colombo Port.
new SLPA Chairman, Dileepa Wijeysundara has gone so far as to
identify "suitable" suppliers, two of whom were
disqualified at a pre-qualification stage by a Technical Evaluation
the supplier selected by a TEC and a Cabinet Appointed Tender Board
(CATB) Wijeysundara maintains the UPFA government is to soon call
for fresh bids, of which he says those who made offers previously
will be requested to do so once again, and their bids re-evaluated.
Wijeysundara has already identified "suitable suppliers"
it is not clear why the government is going ahead with the process
of calling a fresh tender. Will this mean the already selected
supplier will be immediately disqualified?
full scale controversy erupted soon after Wijeysundara accepted the
position of Chairman SLPA, following the April 2 general election.
He has initiated a strong lobby, calling upon the government to
cancel a contract already recommended and approved by a CATB.
insists that the multi million dollar contract earmarked for award
to Mitsui Engineering and Shipbuilding Company (MES) is over priced
by at least US$ 2 million. Wijeysundara claims further that the IT
system on offer by MES is inadequate and not the best in comparison
with at least four other bids that were disqualified by a previous
financial offer by MES costs an estimated Rs. 945 million (US$ 9.4
million). Monies for which are to be drawn out of an aid loan
amounting to Rs. 1.3 billion (US$ 13 million) by the Japan Bank for
International Cooperation (JBIC).
tussle as to who should secure this lucrative deal and the
controversy created by Wijeysundara has even compelled Chief
Representative, JBIC in Colombo, Shafiya Ejima to write on October
8, 2004 to the Director General, External Resources Department,
Finance Ministry. In this letter Ejima urges the Sri Lankan
government to solve this issue amicably and probe "the
possibility of negotiating with the selected applicants for a
mutually beneficial solution to the issues now raised" by this
charges that some previous members of the TEC who had raised
objections to this contract being awarded to MES were pressured or
removed from the committee in order to ensure that MES was selected.
Wijeysundara maintains that the American based Navis Access
International Joint Venture, Cosmos from Belgium and HPC/HHLA from
Germany are more widely used in over "15 trans-shipment ports
around the world" unlike the Japanese MES he said, which has
experience of installing such systems in only two ports - Japan and
three suppliers Wijeysundara has identified as being "more
suitable" were among seven bidders who made offers when this
tender was initially called in June 2003 by the previous UNF
two out of the three were disqualified at a pre-qualification stage.
seven offers initially received by the UNF regime were from Navis
LLC - Access International Venture, Mitsui Engineering &
Shipbuilding Co., Japan, CMC - SSC India Joint Venture, Marubeni
Corporation, Japan, Cosmos, Belgium, Tomen - Japan - JRC - Japan
Joint Venture, HPC / HHLA - Germany and ICICI Infotech Joint Venture
having examined the bids, Navis - Access JV, CMC - SSC JV, Marubeni
Corporation and ICICI JV were determined as failing to qualify with
required criteria. The remaining three were recommended for
acceptance. Bidding documents were then issued to the three
TEC comprising of Deputy Chief Manager SLPA, U. K. D. A. A.
Hemachandra, Chief Operations Manager SLPA, U. Bopitiya, Deputy
Chief Engineer, SLPA, A. D. T. Gunasekera, Senior Systems Analyst
SLPA, G. A. Dharmadasa and Director, Department of State Accounts,
P.M.P. Fernando examined the applications.
recommended to CATB to consider the bid of MES and open its
financial proposal together with the concurrence of JBIC. The
bidding process was conducted under new government guidelines using
a "two envelope system." This involves the technical
proposal being evaluated first and if accepted the financial
proposal is opened.
the recommendations of TEC, on December 15, 2003, the government
accepted two bids and one withdrawal. M/s HPC/HHLA, Germany, one out
of the three short-listed suppliers, informed their withdrawal from
technical proposals of the two bids, MES and Cosmos NV, were opened
and read out. The financial proposals were sealed and kept in the
custody of the CATB.
cabinet appointed tender board comprised of Tourism Ministry
Secretary, Dr. P. Ramanujam, Additional Secretary, Tertiary
Education Ministry, W. Ellawala and Additional Director General,
Department of National Planning, M. Karunaratne.
March 1, 2004, CATB granted permission to open the financial
packages of MES. A date to do so was fixed for March 22.
concurrence of JBIC was also obtained with regard to the technical
proposal submitted by MES. The financial proposal was opened in the
presence of the bidder's representatives and prices read out. On
April 7, 2004 TEC submitted its report on the financial proposal to
the CATB. The CATB approved and recommended that this contract be
awarded to the Japanese owned Mitsui Engineering and Shipbuilding
the meantime, the government changed and the UPFA came into office.
The government decided to appoint new members to the CATB on May 25,
2004. As a result, Ports Ministry Secretary, A. Hewage, George
Micheal and Sumith Amerasinghe took over as the new members.
contacted Wijeysundara said, "there were serious
irregularities, bias, and incorrect information," with regard
to MES being selected.
June 7 this year, Wijeysundara, wrote to Hewage informing him that
with regard to the proposed computer system for the two port
terminals he intends to appoint a project team to prepare fresh
terms of reference (TOR). He states in this letter the proposed
system by the "consultant appears to be lacking in meeting the
present and future needs of a modern computer container
told The Sunday Leader that "the Japanese consultant" was
paid "far too much - by one million dollars" to submit a
report for this project. "We should not forget or underestimate
the talent we have in our country," Wijeysundara claimed,
asserting "my engineers produced a very good TOR in four weeks
which is far better than the TOR we had from the Japanese where we
spent US$ 1 million."
had to admit however that despite "the new CATB having been
given all the facts in June this year it is yet to act and cancel
the recommendations of the previous CATB," he said.
SLPA Chief has however been more successful in his endeavours with
the Strategic Enterprise Management Agency (SEMA). Wijeysundara said
SEMA on the instructions "of Mano Tittawella has called for a
cancellation" of the previous choice.
October 11, Wijeysundara wrote to Special Advisor to the President,
Mano Tittawella informing him a new TOR for this project has been
produced. In this letter he advises Tittawella that negotiations
with the selected party should be based on the JBIC loan being
repaid within 10 years, which would include a grace period for the
selected party to give a price based on the new TOR, for the party
to propose a software package widely used in trans-shipment ports,
that the SLPA would need a major savings on the package price and
that supervision of the implementation to be supervised primarily by
adds, "Unless these conditions are met it is impossible to
proceed with the selected party as we are keen to have the best
system at the right price implemented at SLPA."
is strange in this entire issue is that Wijeysundara has clearly
identified a suitable supplier while condemning one already chosen
by a TEC and a CATB. How fresh bids could in this context be
entertained and evaluated without bias is a question that the new
CATB will have to consider if it plans to act with transparency and
allegations being made against the current SLPA Chairman, is that
his attempt to cancel the previous decision to award the contract to
MES is in order to ensure the multi million dollar award is given to
Navis LLC - of Access International.
in fact is on record telling this newspaper that Navis, one of the
suppliers who made a bid previously was the most suitable to handle
this project. Navis LLC - Access International at the time of
prequalification, was disqualified by the TEC for failing to comply
with pre qualification criteria.
to the TEC report, Navis failed to prove it possessed an annual
average turnover of at least US$ 40 million for the last five years.
In a report to the chairman, CATB dated August 21, 2002, TEC wrote
that Navis LLC - Access International's average turnover over the
last five years is approximately US$ 30 million, which is less than
US$ 10 million or 25% of the required value of US$ 40 million.
Moreover, the company according to TEC did not attach evidence from
general experience or demonstrate a cash flow capacity required for
the successful execution of the project. The company in fact was
unable to provide a satisfactory bank reference with regard to its
SLPA Chief Dileepa Wijeysundara discounts these concerns as being
"irrelevant." He scoffed at the previous criteria which
requested the chosen company to prove an average turnover of US$ 40
million over the last five years as being "totally unnecessary,
merely to install an IT system at the port."
SLPA meantime had also requested MES to extend their bid validity
period for a further 90 days since the bid bond of MES was due to
expire on May 11, 2004.
controversy over the multi million dollar contract even prompted the
US government to raise concerns. On September 23, 2003 Economic
Officer, United States Embassy in Colombo, Teresa Manlowe wrote to
Charitha Ratwatte, who was at the time secretary, Finance Ministry.
In this letter, Manlowe draws Ratwatte's attention to a letter
received by the embassy from Navis, an American company which she
states "is seriously interested in the Port of Colombo Computer
System Project." She asserts that at the time the US embassy
received this letter from Navis, a company representative had
briefed US officials "on some concerns they had about the
reiterates that while the US government supports this US company's
bid to pre-qualify, the US would also want Sri Lanka to get the best
system for the port while ensuring "that there is an adequate
number of competent competitors."
meantime insists MES apart from lacking in required experience to
install an IT system of this nature at a trans-shipment port like
Colombo, also did not include an offer for a billing system.
"How can you have a system without a billing module which is
essential to our operations?" he asked, adding the SLPA
"would become a guinea pig" as it would be forced to
purchase a billing system later and incur additional costs.
are giving priority to the supplier who has a proven track record of
the most number of installations in the world. Then we will have the
confidence we are buying the right product. The other priority will
obviously be to consider the turnover of the company as well - but
more important is to take into account the number of installations
and number of recent installations and also that the system is
available for purchase off the shelf," Wijeysundara said,
adding "Cosmos is also very good. You can buy a module off the
shelf. So this is the whole thing behind this cancellation."
denied he had any links to the Access Group, claiming he had worked
overseas for the last 25 years before returning to Sri Lanka to
accept this post.
can only but wonder. Strange indeed, are the ways of man!
P. Ramanujam says.
Ministry Secretary, Dr. Prathap Ramanujam said at the time he
sat as a member on the Cabinet Appointed Tender Board (CATB)
to evaluate this contract, the CATB unanimously decided that
Mitsui Engineering and Shipbuilding (MES) was the best offer
both at a technical and financial level.
Ramanujam however said that thereafter the government changed
and the new UPFA cabinet decided to call for fresh bids,
rejecting the choice of the previous CATB and TEC.
why the US embassy had also voiced some concern with regard to
the manner in which this tender had been handled, Ramanujam
asserted that the CATB did take into consideration Teresa
Manlowe's letter, but reiterated, "we still did not find
any reason to change the recommendations of TEC and our own
questions SLPA Chief
parliamentary Committee on Public Enterprises (COPE) recently
summoned Dileepa Wijeysundara and questioned him in detail as
to why he is insisting on cancelling a tender which had
already received approval and recommendations by a CATB.
members Ravi Karunanayake, Rohitha Bogollagama, Dilan Perera
and Sripathy Sooriarachchi had vigorously quizzed Wijeysundara
insisting he give adequate reason why he personally is seeking
a cancellation of this contract to the Japanese firm when even
the new CATB under the chairmanship of A. Hewage is yet to
take a decision on the matter.
has now called for a detailed report, reiterating no decision
can be made until it studies thoroughly the charges put
forward by Wijeysundara.
tax takes toll on importers
Jamila Najmuddin and Dharisha Bastians
UPFA government's overnight decision to increase import duty on
private vehicles has earned the ire of vehicle importers and
sections of the public as being unfair and a further burden on
middle income earning families in light of the escalating cost of
Finance Ministry, which issued a communique removing the existing 25
percent duty on imported vehicles, replacing it with a three-tiered
duty structure on October 14, has justified its move by saying it
was aimed at reducing fuel consumption, saving foreign exchange and
minimising damage to the environment.
environmentalists who spoke to The Sunday Leader said it was too
soon to say whether the increase in duty would have a direct bearing
on the environment, adding that the move was not principally aimed
at environmental protection, but additional revenue for the state
coffers instead. (See box for details)
officials at the Ports Authority speaking to The Sunday Leader on
condition of anonymity said that currently a great many vehicles
remained at the Colombo harbour awaiting clearance. The officials
said that the backlog in vehicle clearance had become an issue since
the government imposed the new duty structure.
Secretary, Dr. P.B. Jayasundara, explaining the government's
rationale behind the introduction of the new tax structure, said
that vehicle imports constituted 30 percent of the country's import
revenue, a figure the government considered far too high. Dr.
Jayasundara said that there were large numbers of vehicles entering
the country annually and this system was introduced especially in a
bid to reduce demand for petroleum products in the market which was
having an adverse impact on the rupee and the exchange rates.
Treasury Secretary was also quick to add that while the moves were
not aimed at completely stopping imports of motor vehicles, the
Ministry was hoping to curtail the number of vehicles entering the
country by implementing the new tax scheme.
government officials maintain that the new tax system will only
affect the high income earning sections of society, car dealers
argue that the middle class man's dream of owning a personal vehicle
is now almost completely out of reach.
new tax system imposes duties based on the size and engine capacity
of the vehicle imported, with a 30% customs duty on vehicles with
the engine capacity of less than 1 litre, 40% on mid size cars with
engines upto 1.5 litres and 60% for even bigger cars, according to
the Finance Ministry communique. The government's move to increase
duty on motor vehicles, came amidst widespread speculation that the
UPFA's maiden budget to be unveiled on November 18 too, would impose
further hikes in customs and import duties.
the new tax structure in place for the last two weeks, small and
medium scale car dealers and importers have expressed fears that
they would have to soon close up shop, since they were not only
unable to sell the vehicles currently in their showrooms, but they
also remained unable to clear vehicles ordered and stuck in the
harbour awaiting clearance because of a severe shortage of funds.
mixing up economic priorities" - economist
to The Sunday Leader, Principal Researcher, Point Pedro
Institute of Development, Dr. Muttukrishna Sarvananthan said
this government appears to be mixing up economic policy
said that while he could understand the reason for raising the
vehicle import tax by the government in order to reduce the
number of vehicle imports, save foreign exchange which is fast
depleting as a result of soaring world oil prices and the
inability to get adequate foreign aid, the downside was that
lesser vehicle imports meant lesser government revenue by way
of import duty, VAT and excise duty.
the government may be saving foreign exchange as a result of
reduction in vehicle imports, at the same time it will also
lose valuable tax revenue which is critically needed.
Moreover, higher import tax would also spur greater
undervaluation of vehicle imports which would in turn reduce
tax revenue due to the govt. An indirect effect of this would
be heightened bribery and corruption at the customs,"
an alternative method to reduce vehicle imports, Sarvananthan
said that the government should charge the full cost of
petrol, diesel and kerosene to the customers, instead of
subsidising fuel, which would in turn reduce the use of
private vehicles. "This way government can achieve
two objectives/benefits out of one policy measure.
Selling petroleum products at world market prices would reduce
vehicle imports (particularly private cars) thereby
saving foreign exchange, and save the government the
fuel subsidy which is said to be about Rs.600 million a
month," he said.
added that while it was natural that vehicle dealers will pass
on the increase in import tax to the customers, it was
far-fetched to believe that this increase would hurt the
common man. "It is car imports that are mostly affected
by the increase in import duty and cars cannot be termed a
common man's mode of transport," Sarvananthan said.
car dealers eager to voice their opinion, The Sunday Leader
visited many 'sales' in the city and while a few have already
been forced to close their showrooms due to the lack of sales,
others claim that they wait eagerly each day for customers to
purchase vehicles in order to clear the new vehicles which
have already arrived at the Colombo harbour but remain there
due to the lack of money to clear these vehicles.
Consultant, Motor Vehicles Association, Siramasiri
increase in import duty of vehicles does not only affect the
importers. A lot of people depend on this industry as there
are over a 1000 people employed in this field and this
increase will affect them as well. A certain section of
society earns a living by importing vehicles from abroad.
finance minister claims that this increase will not affect
middle class society. How can it now? This increase affects
prices of non-luxury cars as well and it is the normal and
semi-luxury cars that the middle class can afford to purchase.
government has decided to increase the tax since they are
completely bankrupt. Due to this, importers are not going to
import vehicles anymore. How long is the government going to
run the country in this manner? With the high cost of living
how does the government expect us to pay such high taxes? We
can only pay if the customers buy vehicles from us. Before the
government declared this increase, we used to sell atleast 25
to 30 vehicles per month. However, since the day of the
increase we have not been able to sell even one vehicle and
our showrooms are deserted. Business is running at a loss.
government is under the impression that people who deal in
importing cars are all millionaires. This is not true because
a lot of importers remain in business by taking loans from the
association has decided that we will discuss this matter
further. Due to this we have asked for discussions with the
finance minister and the President. We are giving the
government a period of two weeks and within this time frame if
the government does not reach a decision, we will summon all
the motor vehicle dealers in the island and hold a massive
protest campaign in Colombo. Even after that if the government
does not reconsider we will stop the import of vehicles to
this country completely.
official from Ishara Traders, Colombo:
the day the government increased the taxes, we have not been
able to sell even one vehicle. How are we going to sell when
yesterday a vehicle which was available for Rs. 1.2 million is
now sold at Rs. 1.8 million? People are not foolish to
purchase vehicles at these prices.
though our showrooms are open, we do not have any sales.
Nobody comes to purchase vehicles anymore. Earlier for a
vehicle costing Rs. 1 million we had to pay 2. 4 million with
tax. However, now we have to pay 3.1 million for the same
haven't dealers been able to clear their vehicles from the
customs? To clear those vehicles we will have to sell all our
existing vehicles at the new prices and nobody is willing to
buy. We have had to increase the prices of all our old
vehicles by Rs. 300,000.
government says one thing and does something else. Now rather
than stopping imports, it is better for the government to
broaden the roads. The UPFA has not taken into consideration
the plight of the business community.
Vehicle Importers Association, Pushpakumara
to the increas in import duty, the entire motor vehicle
industry in the island will collapse. This is something that
we had never expected and we cannot bear such a high increase.
We have imported a large number of vehicles and to clear all
these vehicles we need a large amount of money. To gather
these amounts, we have no choice but to increase the prices of
all our old vehicles to the new prices. Due to this we have no
sales and are facing severe losses.
we cannot decide what the future holds for us as the
government has not reached a final decision as yet. It is not
only millionaires that depend on this industry. Today dealers
keep a profit of only 2% to 3%. Now due to this increase, we
will lose even that minimal profit.
have requested the authorities in charge to refrain from
applying this tax on vehicles that arrive at the port within
the next 14 days. This is an unjust and unfair decision by the
government. We hope to hold discussions with the minister and
the President in the coming weeks.
move was not for the benefit of the environment"
Sunday Leader also spoke to Environmentalist, Jagath
Gunewardene, about the benefits a reduction in the number of
vehicles entering the country would entail for the
environment. Gunewardane said that although there currently
was congestion, "we cannot refer to this decision as an
environmental friendly move as the government has taken these
steps to increase their income rather than to cut down on air
are other direct methods that the government can apply to
reduce air pollution, including the ban on old vehicles that
emit toxic fumes plying the roads. The increase of import
duties will only further affect the middle and lower middle
classes. It is too early to congratulate the government
claiming the move is beneficial to the environment as we will
have to wait and see whether the curtailment of vehicles on
the roads will finally impact air pollution.
and sugar deals raise eyebrows
Fernandopulle and Chairman, CWE, Upali Gunaratne
are being raised both here and abroad over Sri Lanka's import of
rice and sugar. The role of Commerce and Consumer Affairs Minister
Jeyaraj Fernandopulle is being queried following import deals signed
by the government with Pakistani rice exporters and a Bharain
company to import sugar outside tender procedure. Both commodities
are being bought at extremely low prices causing concerns among
Pakistani exporters and Lankan traders.
from the commodities being bought at unbelievably low rates no
tender procedures have been followed. Instead, the suppliers have
been independently identified by the Consumer Affairs Ministry. With
regard to the sugar imports Chairman, Mushin Traders, Indrajith
Joseph told The Sunday Leader "I am doing this only for the
honourable minister, not for anybody else," when quizzed on how
he is bringing down sugar at such a low rate. (See box)
a rice deal signed by the government for the import of 2,000 tonnes
of basmati rice and 2,000 tonnes of white raw rice from a Pakistani
exporter has raised several questions due to the extremely low
leading Pakistani exporter clinched the deal for 2,000 tonnes of
basmati rice at the rate of US$ 350 per tonne duty free to Colombo.
Also, for 2,000 tonnes of white raw rice (irri) at the rate of US$
250 per tonne to Colombo. The very low rates have raised questions
in Pakistan as other exporters have said the rice deal at such a low
price may hurt exports in addition to questions over quality.
year, the average price for super basmati was over US$ 525 per tonne
and around US$ 480 for the 385 variety of basmati - the only two
known varieties grown in Pakistan.
the rate of US$ 350 per tonne to Colombo for pure basmati, exporters
say, is not possible. Fears are being expressed that the Pakistani
exporter maybe dispatching a blended variety to Sri Lanka which
would finally result in tarnishing the entire exports of basmati
rice for Pakistan. Chairman, CWE, Upali Gunaratne however insists
that 500 metric tonnes of basmati received from Pakistan so far have
not been blended, but is pure basmati.
serious concerns are being voiced in Pakistan that the rice deal to
Sri Lanka would bring down the prices of basmati variety globally.
For instance other importers of Pakistani rice like Oman and
Mauritius may now feel they have been cheated and also demand
Pakistan sell basmati and white rice to them at the same low rates
as it has done to Sri Lanka.
facilitate this order, Ministry Secretary, S. Wirithamulla
personally visited India and Pakistan to inspect the rice.
Wirithamulla later instructed CWE Chief Gunaratne to purchase 25,000
tonnes of sugar from Brazil - also at an unbelievably low rate of
only US$ 197 per tonne when the going rate is at least US$ 100 more.
If the sugar does arrive in Sri Lanka the government will be in a
position to sell a kilo of sugar at a nominal Rs. 25. If this is the
challenge Fernandopulle has set himself the country would certainly
like to see him meet it.
meantime as we reported last week has refused to comply with the
Ministry directive to buy this sugar from a favoured supplier,
namely Indrajith Joseph who was selected by Fernandopulle bypassing
tender procedure. Joseph is the local agent for a company based in
Bahrain which goes under the name, M/s Kingdom Trading International
based at 55th Floor, Dauhi Building, Municipality Building, Manama,
Kingdom of Bahrain.
is chairman and managing director, Mushin Traders as well as Ace
Holiday Lanka (Pvt) Ltd., which is located at Colombo 8. Gunaratne
took a firm stand on the issue after Wirithamulla wrote to him
telling him he must buy 25,000 metric tonnes of sugar from Mushin
Traders at US$ 197 per tonne. Gunaratne's bone of contention is that
when the contract was forwarded to him for signing he found a clause
stipulating the sugar can only be inspected at the point of loading
and not at the port of discharge. A load port survey is usually
conducted before and after items are sent and received in order to
make certain, before payment is made, they do not carry a shortfall
or are in violation of the specifications stipulated.
to ensure the transaction is fool-proof Gunaratne said he has now
written to the Kuwait Embassy seeking "feedback" on the
sugar supplier based in Bahrain. The CWE Chief further asserted that
any sugar exporter registered with the London Sugar Refinery
Association would not be in a position to sell sugar at this rate.
was unable to explain why and how the ministry has purchased both
rice and sugar internationally at such low rates. "I don't
know" he said confirming however that in both cases, the
consignments have been bought for prices less than US$ 100 and in
the case of basmati rice less than US$ 200 per tonne.
CWE Chief also admitted that in the case of white raw rice purchased
from Pakistan the government has been "finding it difficult to
sell" due to available quantities of white rice already in the
market. Since basmati rice constitutes part of a rich man's diet it
remains to be seen how effectively the CWE will be able to market
meantime is also battling trade union leaders at the CWE. He said
some 500 employees at the CWE "have nothing to do"
following the closure of wholesale outlets. Salaries of all CWE
employees Gunaratne maintained are paid from Treasury funds and as a
result causing a huge burden on the government. "Only 150
people" Gunaratne said are currently required to serve any
purpose within the CWE. "The government will soon have to take
a decision," he asserted.
can only wonder why the JVP, in particular Wimal Weerawansa, Sunil
Handunnetti, and the PA's Mahindananda Aluthgamage who were
vociferous critics during the previous regime on the import of rice
are today silent. Surely these men, two of whom are presently deputy
ministers should be raising the matter and asking the same questions
they raised before? Not only has the Consumer Affairs Ministry
bypassed tender procedure, but also ignored local traders. Shouldn't
the JVP be referring to the 'Blue Book' prepared by President
Chandrika Kumaratunga detailing guidelines on government procurement
which Kumaratunga insisted the UNF too must follow?
men have previously waxed eloquent on state and private television
insisting such imports must be transparent. Why they are now silent
in the face of such a blatant lack of transparency and
accountability is a matter for this nation to now be judge and jury.
doing this purely for the Minister"
Mushin Traders, Indrajith Joseph when asked how he is selling
sugar at US$ 100 less than market prices said, "I am
doing this for the honourable minister, not for anybody
asserted that he has also not insisted on the government
opening a Letter of Credit as is the norm, but has agreed the
Ministry will pay him only after the consignment reaches the
port of Colombo.
trader can give that facility - it is always a risk - as the
government can backout after the goods arrive," he said.
Asked why he is prepared to take this risk, Joseph replied,
"I do it only because of the Minister. He is trying to
bring down prices and so I must assist him."
Anura Kumara Dissanayake had submitted a cabinet paper pertaining to
a scheme to recruit agriculture graduates to various ministries. The
cabinet paper detailed how these graduates could be integrated not
only into the Ministry of Agriculture but also to several other
Minister, Sarath Amunugama from the time he saw the cabinet paper,
appeared to be fairly displeased with its recommendations. The first
question about the recommendations therefore, came from Amunugama
himself at the cabinet meeting.
forgetting the contents of his own cabinet paper on the foreign
funded projects debated on so hotly only a short while ago, Dr.
Amunugama asked Minister Dissanayake how exactly he saw fit to make
decisions about the recruitment of graduates to ministries not
assigned to him.
replied that he was not attempting to force or influence other
ministries by his cabinet paper, but merely detailing the procedural
guidelines under which agriculture graduates could be integrated
into other sectors. Not satisfied with this response Amunugama took
the issue further, finally practically giving Dissanayake a lecture
on how a cabinet paper had to be presented.
it was President Chandrika Kumaratunga who intervened. "Anura
is right. As the Minister in Charge, he has a right to submit his
recommendations," she said, even going on to advise Dissanayake
to re-submit the paper as a basis for the recruitment of graduates.
cabinet meeting last week saw a battle between the President and the
Minister Rajapakse expressed his displeasure about the fact that
President Chandrika Kumaratunga had dissolved the board of directors
of the E-Sri Lanka Project. The Premier charged that Kumaratunga was
interfering with a subject that came under his ministerial purview.
But the President maintained that the project came under her
told you this for a long time now. That is my subject. It has been
assigned to you by mistake," the President explained.
the Premier insisted that when former Prime Minister Ranil
Wickremesinghe was in office, the project had been carried out under
him and went on to ask whether the President, being caught up the
way she was with so many other responsibilities, needed to concern
herself with yet another matter.
to this, President Chandrika Kumaratunga pointed out that the Prime
Minister already had to contend with the responsibility of the
Highways Ministry into which state organ massive amounts of funds
were being channelled. But Rajapakse replied that only 11,000
kilometers came within his jurisdiction and did not include roadways
all over Sri Lanka.
don't count the kilometers when I assign ministries. If you do as I
say, there will be enough and more money," shot back
content with this reply from the President, Rajapakse said: "I
don't know about all that. All I am saying is don't try to interfere
with my ministries. If you want to appoint someone to a particular
post, we can talk about it and reach some kind of compromise
arrangement. We don't have to discuss it here, we can do it
cabinet of ministers listened to this exchange with some amusement.
But since the President said that the matter could be discussed
later, the tension was eased somewhat.
were rampant in the political arena last week that a deputy minister
was engaged in an attempt to get JHU General Secretary, Ven. Uduwe
Dhammaloka Thero to cross over to government ranks by threatening
and intimidating the monk. The deputy minister had shown the monk a
tape and threatened him with it, the story went.
rumours made the main opposition United National Party (UNP) look
into the issue. The opposition was of the view that if indeed there
was a plot afoot to intimidate the monk into supporting the
government, it should be looked into immediately and prevented.
several senior UNPers met with the Thero last week and asked him to
confide in them if he was facing any such problems. They told the
Thero that if the government was indeed engaged in an attempt to
intimidate a member of the clergy into supporting it, the people of
the country could be kept informed. However, the monk maintained
that he had been subject to no such threats or intimidation of any
UNP political affairs committee meeting on last Monday, October 25,
was a stormy affair. After Colombo District MP Bandula Gunewardena
raised the issue of Milinda Moragoda's Gamin Gamata programme (See
Inside Politics, page 11) invited for discussion was former Minister
of Commerce, Ravi Karunanayake.
at the meeting of the Political Affairs Committee were UNP Leader
Ranil Wickremesinghe, Karu Jayasuriya, Professor G. L. Peiris,
Jayawickrema Perera, John Amaratunga, Lakshman Seneviratne, Tissa
Attanayake, Kabir Hashim, Malik Samarawickrema and N. K. Weragoda.
committee took up three motions Karunanayake had given notice of in
parliament. First was the scrapping of the pension scheme for
parliamentarians. Karunanayake took up the position that though the
JVP was trying to move the motion and take the credit for it, it was
he who had first taken up the issue.
pointed out that the public wanted to see radical action taken by
the party and was also not in favour of a pension scheme for MPs,
hence the motion. But Wickremesinghe was not in agreement saying
that the UNP policy was to provide MPs with a pension and this had
been so since the time of former President J. R. Jayewardene.
being told that it was party policy, Karunanayake referred to a
statement made by Kalutara District MP Mahinda Samarasinghe during a
TV programme sometime earlier to the effect that he was for the
abolition of the executive presidency when party policy was
otherwise. However, Wickremesinghe said that even on that issue,
party policy was clear and everybody had to fall in line with it.
back to the pension issue, Wickremesinghe said that Jayewardene had
been insistent that MPs should be provided with a pension facility
after they retire. "In fact President Jayewardene and I, though
not in need of a pension or the salary paid to MPs always decided to
take it and not even give it to a fund as some people are doing to
set an example for MPs to depend on their salaries as their source
of income. That is party policy," Wickremesinghe reasserted.
however continued to argue that public expectation was otherwise.
But eventually the political affairs committee decided that party
policy would have to be adhered to on this issue.
next issue to be taken up was a motion by Karunanayake to increase
the fine of Rs. 500,000 imposed on persons giving false information
to the Bribery Commission to Rs. 5 million.
again, the PAC said it has to be decided whether this was the
opportune time to take up the issue since it would lead to a mud
slinging campaign rather than the substantive issues being taken up.
however was insistent saying he was being vicitimised with false
allegations and wanted to clear his name. "I have no problem in
defending my position. I welcome the opportunity of confronting all
the issues. I should be allowed to debate the motion to clear my
name." Finally, Wickremesinghe said he would take a decision on
the matter in consultation with the committee and inform
Karunanayake in due course.
long after, the UNP trade union leaders, including Gamini Lokuge,
Rajitha Senaratne, Rohitha Bogollagama, Sirinal De Mel, Raja
Seneviratne among others were called in to discuss their activities.
the outset, Wickreme-singhe took up the issue of letters being
circulated to members of the political affairs committee and
cautioned against it, stating that such letters in future should be
addressed directly to him. Wickremesinghe went on to say that he
would then decide whether such letters need to be discussed at the
committee or not when it comes to organisational matters.
this point, Rajitha Senaratne referring to the incident last week
where a letter of his was circulated among the committee said that
he never wanted his letter to be circulated but had only given the
copies addressed to the party leader to Assistant Secretary, Tissa
Attanayake to take a decision on circulation. It was pointed out by
Attanayake however at this juncture that he circulated the letter
because it was addressed to the committee as well, through the party
Senaratne had another battle to fight. He charged that everything
that had been discussed at the committee meeting had appeared in the
press. He went on to say that he had heard from The Sunday Leader
that it was Mahinda Samarasinghe who had given this information.
umbrage at this allegation, Samarasinghe denied it adding that
Kalutara issues should not be raised in that forum. But Senaratne
did not let go, saying that talking of Kalutara issues, Samarasinghe
had told the newspapers he was not leaving the Kalutara District and
going to Colombo, but that Malik Samarawickrema had informed him
that Samaraesinghe wanted to contest from Colombo.
however said that he had made no such statement. In an attempt to
defuse the verbal battle, Wickremesinghe said that they should
discuss matters pertaining to the trade union movement and not
this time, Samarasinghe refused to let the issue go, insisting he be
given an opportunity to clear his name. He said "The Sunday
Leader can be asked in everyone's presence whether he had anything
to do with the information published," adding that he was
challenging Senaratne to do so.
Senaratne was equally insistent saying that Karunanayake had given
him that information a short while back.
Samarasinghe strongly denied the charge, insisting that the Leader
be asked whether this was in fact so and asked Senaratne not to
attempt to take cheap political advantage by making such
Wickemesinghe intervened and advised both members to stop the
exchange of words and to focus on trade union activities, which they
then proceeded to do.
a subsequent meeting on Wednesday, Wickre-mesinghe had informed the
committee that he had made his own inquiries with regard to the
source of the leak and learnt that Samarasinghe had nothing to do
with what was published in the Leader.
is the 10th year Chandrika Kumara-tunga has served as Head of State
and President of Sri Lanka. The SLFP has decided to organise a
series of ceremonies to mark this decade.
series has been titled 'Battle for Development' and commenced in
Anuradhapura. But the JVP ministers had problems with the ceremonies
because it appeared that the party had been totally left out of the
programme and only invited for the ceremony. So the JVP MPs had
decided at an unofficial level not to attend the opening ceremony in
letter from President Chandrika Kumaratunga asking Minister Anura
Kumara Dissanayake to explain why he made remarks against Minister
Sirisena at Matale within a period of a week had also been given to
Dissanayake the day of the opening ceremony.
usual, the crisis was discussed between Minister Dissanayake, JVP
Propaganda Secretary, Wimal Weerawansa and Ports Minister, Mangala
a result of the discussions, Minister Dissanayake attended the
opening ceremony in Anuradhapura the next day. He travelled to the
site of the ceremony in Minister Samaraweera's vehicle.
religious ceremonies were held at the Sri Maha Bodhi, Minister
Dissanayake went there too with Samaraweera. But at the sacred
temple, it was obvious that Dissanayake was having some trouble
facing the President and tried to remain inconspicuous and away from
Kumaratunga's sight throughout the ceremony.
behaved the same way during the opening of a new provincial council
building in the area. Having noticed Dissanayake's behaviour during
the ceremonies, President Kumaratunga turned to Samaraweera and said
"Is Anura hiding in corners because he is scared? People will
notice. Tell him to stop being silly and come in front and sit with
ready to oblige, Samaraweera proceeded to take Dissanayake's hand
and lead him to a chair in one of the front rows. Soon afterwards,
the crowd moved towards the public grounds where Minister Sirisena
too was to sit on the main podium.
Dissanayake took his seat in a back row. Seeing this, Kumaratunga
called out to the JVP Minister, saying, "Why are you hiding in
corners? You are also a minister. Come and sit in front."
Dissanayake humbly walked up and took his seat.
the fact that Minister Lalkantha is extremely popular in the
Anuradhapura area, his absence at the ceremonies was conspicuous.
Many people present were heard to mumble that it indicated the rift
between the newly appointed 'ministers' and those who remained
'comrades' within the JVP.
cabinet meeting went on till about 10:30 that night. The cost of
living also came up for intense discussion during the meeting, with
the President suggesting that the prices of essential items should
be controlled through the cooperative system.
several ministers felt these moves would prove futile, since there
were no cooperative outlets in urban areas. But the President
disagreed. "The people in Colombo don't have a problem. It is
the people in villages who can't cope with the prices. Find ways to
develop the cooperative system. We need to stregthen this
system," she asserted.
President's plan received cabinet approval.