Sri Lanka’s public health care service that is intended to benefit many, especially the poor, is plagued with corruption and malpractices. While the government and higher officials at the Health Ministry are allegedly making money from the Health Ministry budgetary allocations, those who go to government hospitals seeking free health services face difficulties as they have to buy their medicines from private pharmacies as a result of an acute medicinal drug and medical supplies shortage in government hospitals in the country. Although sources in all main hospitals on the island including the Colombo National Hospital, Colombo South Teaching Hospital Kalubowila, Kandy General Hospital, Peradeniya Teaching Hospital, Kurunegala General Hospital, Cancer Institute Maharagama, Karapitiya Teaching Hospital, Matara General Hospital and Anuradhapura General Hospital confirmed to The Sunday Leader that there has been a severe drug and medicinal supplies shortage over the past few months. However, Director Medical Supply Division (MSD) of the Health Ministry Dr Kamal Jayasinghe claims otherwise.

Secretary to the President Lalith Weeratunge’s letter to Health Secretary Dr T. R. C. Ruberu requesting to take diciplinary action against Dr Ajith Mendis and The letter sent to Secretary to the President Lalith Weeratunge by the presidential investigation unit informing Dr Ajith Mendis’ frauds

According to Dr Jayasinghe, there is no drug shortage in the country but only a fake drug shortage that has been created by the media to put the government in difficulty. Health service trade unions accused the government for the continuous drug shortage in the country which they said was a direct consequence of not implementing the Senaka Bibile Drug Policy. Prof. Bibile played a leading role in developing a rational pharmaceutical policy aimed at ensuring that impoverished people would get quality drugs at a low price. A careful selection of drugs was an essential component of the policies he advocated. Since there were allegations that pharmaceutical companies in the country made considerable profits by selling drugs under their trade name, Prof. Bibile investigated the issue and recommended the establishment of a national policy and a state body to regularize the trade. He became the founder Chairman of the State Pharmaceuticals Corporation (SPC). The SPC then channelled all imports of pharmaceuticals, calling for worldwide bulk tenders which were limited to the approved drugs listed in the national formulary. The public and private health sectors obtained all their requirements from the SPC. Hence the drug trade was regulated by this body and drug sellers were forced to compete with each other.

“Who says that there is a drug shortage in hospitals when there are adequate stocks,” - Health Ministry When The Sunday Leader contacted Media Officer W. Wanninayake since Minister Sirisena was not contactable, he too said that there is no shortage of medicines in the country. “Who says that there is a drug shortage in hospitals when there are adequate stocks,” said Wanninayake. However Wanninayake did not wish to answer any question posed at him with regard to the malpractice and corruption taking place in the Health Ministry but said that he was unaware of any allegations against any one at the ministry for alleged corruption or malpractice. When asked what was meant by the Health Minister last week in his reference to the mafia, Wanninayake said that he could not make any comment about it and suggested that we speak to the Minister. With regard to the Health Ministry’s failure to take action against the former DG Dr Ajith Mendis as instructed by the Presidential Investigation Unit, Wanninayake said that there was no such allegation levelled against Dr Mendis. “Who said that there is such a directive from the Presidential Investigation Unit? As far as I know there is no such directive,” said Wanninayake.

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“If the Minister knows that there is such a mafia, why cannot he take any action against them?” - Chairman Healt Services Trade Union Alliance

In run up to the 2005 presidential election, Mahinda Rajapaksa in his election manifesto- Mahinda Chinthanaya promised to implement the much needed Senaka Bibile Drug Policy to put a complete stop to the drug shortage and inflow of sub-standard drugs to the country. Nimal Siripala De Silva too gave the same assurance when he became the Health Minister. All became mere promises to words as none of them wanted to implement this as it would affect their stooges who were engaged in medicinal drug supply to the country. Had the drug policy been implemented, these politicians and their stooges would not have benefited,” said Chairman Health Services Trade Union Alliance (HSTUA) Saman Ratnapriya. According to Ratnapriya, it has now emerged that a sizeable amount of public funds allocated to the country’s health sector ends up in the pockets of certain ‘big wigs’ within the administrative setup. “For 2013, the government allocated Rs 125 billion to the health sector out of which only Rs 16 billion was allocated for drugs and other medicinal supplies which was not enough at all. However 30% of this amount too was lost due to corruption. Although we have brought to the notice of the government and the Health Minister that the main reason behind this drug shortage is corruption and malpractices with authentic documents, instead of taking action against the higher officials who earned millions of rupees through shoddy deals only the lower ranking employees who helped to expose the fraud have been transferred to cover up the mater,” alleged Ratnapriya. He further said that although there is plenty of evidence about these shoddy deals and the names of those involved have been exposed, nothing has been done to take action against them. “When the Presidential Investigation Unit wanted the Health Ministry to take disciplinary action against the then Director General of Health Services Dr Ajith Mendis for alleged fraud, the Health Ministry did not take any action but allowed him to go on retirement last August,” said Ratnapriya. According to Ratnapriya, the Health Ministry loses a considerable amount of its allocation for local purchases. “When the Ministry can place orders for medicine and other supplies in advance without waiting till the stocks are over, they prefer to go for local purchases as these Ministry officials too can manipulate the prices. This was what happened when the Medical Supplies Division purchased surgical gloves at a cost of Rs 45 per pair when they could have been purchased for between Rs 20-25 through the tender procedure. The same gloves have been purchased for Rs 67 by the National Hospital. It was the same with examination gloves. When a pair of examination gloves could have been bought for Rs 2.50 through local purchase they have been bought at a rate of Rs 7.68 to 7.80. This shows as to how certain Health Ministry officials and local suppliers have robbed our own money to the tune of over Rs 1 billion on this shoddy deal alone,” alleged Ratnapriya. He further said that action has not been taken against the company that supplied the Cloxaciline vials which contained glass particles in one injection at Kalubowila Hospital. “Although the Cloxaciline vials were withdrawn from the Kalubowila hospital, they were not withdrawn from any other hospital. It has now been revealed that although Cloxaciline is purchased at a cost of Rs 8.78 per vial through tenders, this particular batch of vials have been purchased locally at a cost of Rs 30.38 per vial. The loss to the country through this deal was Rs 25.3 million,” added Ratnapriya. He further queried as to why Health Minister Maithripala Sirisena is not taking any action against his (Sirisena) own officials for engaging in fraudulent drug and surgical instrument purchase deals but only stating that there is a drug mafia in the country. “The Minister recently said that there is a drug mafia in the country. If the minister knows that there is such a mafia, why can’t he take any action against them? He is the Health Minister who has all powers. It was during his tenure as Health Minister that the Presidential Investigation Unit wanted the Health Ministry to take disciplinary action against Dr. Ajith Mendis for misusing public money which ran into billions of rupees. Why didn’t the Minister take action against Dr Mendis? Why can’t the minister implement the much needed Senaka Bibile Drug Policy which has no room for illegal drug purchase which has now become a curse,” added Ratnapriya.

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“Very rarely there would be a drug shortage but it is not bad as the way the media highlighted,”  - Director Medical Supplies Division

While refuting that there is a drug shortage in the country, Dr Kamal Jayasinghe said that out of the 21, 000 medical supplies only 5 or 6 items goes out of stock and that too rarely. “Very rarely would there be a drug shortage but it is not bad as the way the media highlighted. Regularly we have review meetings with Ministry officials and the SPC to discuss the availability of drugs and other medical supplies in the country,” said Dr Jayasinghe. When asked as to why the Health Ministry is very keen in going for local purchases without following tender procedure which costs the Ministry dearly, Dr Jayasinghe said that there is no other option for him than going for local purchase if the supplier has failed to supply the items regularly. Asked as to why the drugs that are imported are not tested for quality and as a result the inflows of substandard drugs have become uncontrollable, Dr Mendis said that it is up to the SPC to follow the criteria. “I am responsible in selecting the necessary drugs, estimating, placing orders with SPC and ensuring the medicine is stored according to the proper standard. I also monitor the drug shortages and if so have discussions with the SPC and Ministry officials and rectify the situation. In an emergency I have to purchase the necessary drugs or any other medical supplies locally,” said Dr Jayasinghe. Dr Jayasinghe meanwhile said that he does not know why the companies that have supplied substandard drugs have not been blacklisted. He said we would have to ask the SPC as it is their responsibility and not the MSD’s.

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“The Ministry officials allow their friends to supply drugs and get a good commission” - General Secretary of All Ceylon Health Services Union

Meanwhile, General Secretary of All Ceylon Health Services Union Gamini Kumarasinghe said that the drug shortage has become a serious issue now and added that under the present government this has become a regular problem. “Although the government boasts that Rs 125 billion has been allocated for the country’s health sector we wish to know as to where these monies have gone. The Treasury does not release the required money to purchase the medicine. As a result the Health Ministry has not paid the drug companies their dues which has resulted in stopping the supply of medicines. Kumarasinghe accused the government of not implementing Senaka Bibile Drug Policy as the budgetary allocations have gone in vain as there is no drug policy in the country. “The Ministry officials allow their friends to supply drugs and get a good commission. Even if these companies are found guilty for importing substandard drugs they are not blacklisted,” said Kumarasinghe. He further queried as to how the 21 complaints that have been lodged against former Director General Dr Ajith Mendis at the Bribery Commission has ignored. “Even the Presidential Investigation Unit has found out that Dr Mendis is guilty but it is surprising why the Bribery Commission with all the documents provided has failed to initiate any investigation. If these complaints were lodged against a person without any political clout, by this time investigations would have been initiated,” added Kumarasinghe

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Unless the drug policy is implemented the irregularities that takes place in the drug purchasing process cannot be revived  - Chairman SPC

Prof. Lal Jayaratne is of the view that in the absence of a drug policy in the country, the prevailing drug mafia cannot be stopped. “The drug policy has to be presented to parliament and approval obtained for implementation if we need to stop the inflow of substandard drugs to the country,” said Prof. Jayaratne. According to him it is the multinational drug companies that control the drug mafia in the country by influencing the higher officials. Speaking on the blacklisting of drug suppliers, Prof. Jayaratne said that unless investigations prove that a particular company has supplied substandard drugs on a few occasions, there is no system to blacklist a company that had a good past record. “If we start to blacklist all the companies that supply substandard drugs on each and every occasion, then there would be no companies for us to purchase medicine. However we have blacklisted many drug companies. Although allegations have been levelled against us for being biased we have taken the right decision at the right time,” said Prof. Jayaratne. When asked as to why there is an acute drug shortage in the country, Prof. Jayaratne said that it was due to many reasons – from quality failure to storage problems. “There is no acute drug shortage at present as the situation is far better than when compared to a decade ago. With regard to the failure to quality check the medicine that enters the country, unless we improve the capacity of NDQAL we cannot quality check all the medicine that comes to Sri Lanka. This is not good and that is why we are getting more and more substandard drugs,” said Prof. Jayaratne.

The chart shows the price difference of some of the medicines sold under generic and brand names

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“Knowing the loopholes, India keeps on sending substandard, quality failed drugs to Sri Lanka,”  - National Organizer of the Prof. Senaka Bibile Commemorative Association

National Organizer of the Prof. Senaka Bibile Commemorative Association Dr Jayantha Bandara said that the long delay in implementing the Senaka Bibile Drug Policy was due to the actions of persons with vested interests. Dr Bandara accused the government for its failure to implement the Senaka Bibile Drug Policy though many assurances had been given by Ministers Nimal Siripala de Silva and Maithripala Sirisena since 2005. “The delay is to please their stooges. If the Senaka Bibile Drug Policy is implemented, drugs and other medical supplies cannot be purchased according to the whims and fancies of those who are near and dear to these politicians,” said Dr Bandara. According to him, all attempts to get the Drug Policy Bill passed in parliament over the years in order to ensure quality medicines for the people was hampered due to the ulterior motives of multinational drug companies. “The government is not concerned with providing quality medicine to its people as the ‘big wigs’ are bribed by multinational drug companies. The Health Ministry dances to the tunes of these drug companies without providing the people a value oriented health service. When the Health Ministry blacklisted eight Indian drug companies in 2011 for supplying substandard drugs, the Indian government got the blacklisting withdrawn immediately. As a result the Health Ministry still purchases substandard, quality failed drugs from these companies,” said Dr Bandara. He noted that multinational drug companies have openly stated that they do not need the Senaka Bibile drug policy implemented but only a national drug policy knowing that in the event the Senaka Bibile drug policy is implemented, there are no loopholes to import quality failed substandard drugs especially from Tamil Nadu. He further noted that this policy was supported by the World Health Organization (WHO) and other UN agencies with enormous benefit to third world countries and this is now being followed by over 100 countries including developed nations. “The advantage would be enormous and people would be able to purchase any kind of drug under its generic name at a fair price. If this policy is implemented the government does not need to spend billions in foreign exchange to import a number of essential drugs, but only a few hundred varieties of drugs. Fixed prices for drugs with quality assurance would come into the market instead of substandard and quality failed drugs,” added Dr Bandara. Meanwhile, Dr Bandara challenged the Health Minister to take action against the officers who have misplaced the government draft National Medicinal Drug Policy (NMDP). “According to Minister Sirisena the draft copy of the NMDP has been sent to the Legal Draftsmen’s Department where it has gone missing. If the draft has gone missing why can’t they send another copy? Why can’t the Health Ministry request the Legal Draftsmen’s Department to take action against the officers who are responsible for the document?” said Dr Bandara. Dr Bandara further explained as to how the drug prices are different when they are sold under brand names instead of the generic name. “When our own State Pharmaceuticals Manufacturing Corporation (SPMC) has the capacity and the knowledge to manufacture most of the drugs that we need with the best quality assurance, the Health Ministry instead of supplying raw materials to them, keep on importing medicines which are commonly sub standard. When I made a field visit to the SPC and some leading drug stores in and around the General Hospital I found out there is a big price difference between the SPMC drugs which are sold under their generic name and the drugs that are sold under brand names. When doctors prescribe these brand names the patients have no choice but to pay higher prices,” said Dr Bandara. According to Dr. Bandara, the Medical Supply and Technology Division of the Health Ministry is the Drug Authority which has the National Drug Quality Assurance Laboratory (NDQAL) that can check the quality of all drugs that are imported. “The SPC Chairman clearly states that 90% of the required drugs are imported from India and have no quality assurance since we have no facilities to check the quality of these medicines. The NDQAL’s role should be to check the sample from the manufacturer to give approval to import the medicine and then to carry out a random check before the stock is shipped. Once the stocks are brought to the country another random check has to be done before they are distributed and to check once again if there are any complaints from the public. Other than carrying out tests to see the quality of the medicine if there are complaints from the public, the other procedures are not carried out. Knowing these loopholes India keeps on sending substandard quality failed drugs to Sri Lanka ,” said Dr Bandara.

The Sri Lanka Navy and the Special Task Force (STF) are accused of grabbing 1,220 acres of forestlands in Shasthrawela, Ragamwela, Ulpassawela, Horowkanda and Ella in Panama chasing away the villagers whose forefathers too had been occupying these lands even during the Uva-Wellassa rebellion

However though sanctions have been imposed by the Forest Department, Archaeological Department, Coast Conservation Department and Central Environmental Authority on carrying out any development work on forestlands, the Sri Lanka Navy claims that such formalities are totally discarded when the Defence Ministry approves their projects.

Speaking on the construction work carried out by the Navy in Panama in the Ampara District, Navy Spokesman Commander Kosala Warnakulasuriya said that they have not followed any of these procedures nor would they require permission from the said institutions as the construction is being carried out on Defence Ministry land.

“This is a Defence Ministry land and there is no necessity to obtain approval from any department to carry out any of our development work,” claimed Warnakulasuriya.

Of the total number of lands, over 1000 acres are forestlands that come under the control of the Forest Conservation Department.
The villagers on the other hand have a different story to tell. “These are our native lands. Some of us have deeds and the rest of us have licenses,” said Somasiri one of the villagers who alleges he had to vacate his land.

For the villagers losing their occupational lands and the dwellings therein, have pushed them from pillar to post.
According to the villagers, no sooner the war was over the Pottuvil Police had allegedly evicted the villagers from their properties claiming that the government wants to construct a hotel project along the coastal belt.

“Even though they continued to demand that we move away from our native lands we did not heed the instructions of the Pottuvil Police. The then OIC of the Pottuvil Police once threatened us and said that we would not be allowed to stay on our lands for much longer. When we protested against the Police demand I was asked to come to the Police Station and threatened,” said Somasiri.

Meanwhile, the Chief Incumbent of the Panama Temple, Ven. Panama Sri Chandrarathana Thero said it is clear as to who chased away the villagers on that fateful night leaving all the families homeless and depriving them of their livelihoods.

“The sole income of these villagers was either from chena cultivation or fishing. After being chased away from their villages, the people are now homeless and with no source of income. No other party in this area has T-56 riffles. The day after these villagers were chased away, an Air Force detachment came and the entire area was cordoned off and other than the security personnel no other party was allowed to even approach,” said the Thero.

According to the Thero, although complaints were lodged with the Pottuvil Police no action was taken to make any arrests in this regard.

“It is almost three years now since the villagers were chased out; and the Pottuvil Police has been extremely lethargic towards making a breakthrough in the case. Even those who were engaged in fishing are not allowed to continue with their livelihood activities as the Navy has restricted the people going out to sea along that coastal stretch,” said the Thero.

Meanwhile, Coordinator of the Movement for Land and Agricultural Reform (MONLAR) Lakpriya Nanayakkara said that although the Navy is claiming that they are constructing a camp, the pictures they have taken from afar shows that they are constructing a hotel complex.

“The Lahugala Pradeshiya Sabha took legal action against the Air Force for doing illegal construction within the forest. When the case was first called on March 5, the Magistrate asked the Air Force what they were constructing in the forest and was told that it is an Air Force Base. Then the Magistrate wanted the Air Force to bring the Pradeshiya Sabha approvals for construction work. Although they promised to produce them at the next hearing scheduled for March 19, they failed to do so. At the third hearing Pradeshiya Sabha Lahugala obtained an injunction order against the Air Force construction work. Now the work has come to a standstill,” said Nanayakkara.

Meanwhile, Director, Environment Conservation Trust Sajeewa Chamikara said neither the Navy nor the Air Force has carried out an Environmental Impact Assessment (EIA), although they have destroyed the forests that come under the purview of the Forest Department.

“In addition they have violated the Coast Conservation and Coastal Resources Management Act No. 57 of 1981 (Amended), Section 20 of the Forest Conservation Ordinance as amended by Act No. 65 of 2009, the Archaeological Ordinance No. 49 of 1940 and the National Environment Act No. 47 of 1980,” said Chamikara.

However Deputy Director Archaeology Ampara W.H.A. Sumanadasa said that neither has the Navy obtained permission to carry out any development work on the archaeological sites nor has it requested any approvals.

“How can the Archaeology Department expect the Sri Lanka Navy to obtain approval from us when it does not even allow archaeology officials to visit the sites? There are many archaeological ruins which are said to date back to the prehistoric era, within the Navy camp in Panama,” said Sumanadasa.

According to Sumanadasa, all attempts taken by him to visit these archaeological sites in Panama on the directive of Director General Archaeology Dr. Senarath Dissanayake one and a half years ago failed, as the Navy did not allow anyone to even approach these sites.

“Before the war began we had a circuit bungalow on this site in Panama. However after the war the bungalow was ransacked and only the walls were remaining. The walls too collapsed during the tsunami and the land was acquired by the Navy after the end of the war. Our Director General wanted me to get this land released and construct a circuit bungalow but how can I implement his directive when the Navy is not even allowing me to get closer to the land,” said Sumanadasa.

Although Sumanadasa was not able to visit these archaeological sites, he says that people in the area have told him that the ruins date back to the prehistoric era and that there are many ruins found in all the places the Navy has taken over.

“I have written to our Director General and I am awaiting his reply to take the next step,” said Sumanadasa.

Meanwhile Navy Spokesman Commander Kosala Warnakulasuriya said that no one can be allowed inside the Navy camp as it is military land.

“If the Archaeology Department officials want to pay a visit, permission has to be obtained from us. No one will be allowed to walk into our areas without permission. However with permission obtained through the proper channels, anyone can visit the camp area,” said Commander Warnakulasuriya.

Air Force Spokesman Wing Commander Shiraz Jaldeen said that he is not aware of any court injunction to stop construction work.
“We are in a small detachment and the Air Force is not doing any construction work. We are only guarding this particular area. It is the Presidential Secretariat that engages in construction work,” said the Wing Commander.

When asked whether there is an injunction order taken by the Pradeshiya Sabha Lahugala against the construction work, Jaldeen said that he is unable to furnish further details as it is the Presidential Secretariat and not the Air Force that is involved in development work.

“Can you please call the Presidential Secretariat and find out all these details. I am very sorry for not being able to give you any answers as I am not aware of these issues,” said the Air Force Spokesman.

Divisional Secretary Lahugala A. Somarathana meanwhile said that all those who lost their lands would be given alternative lands at the earliest.

“Out of all the families only one family had a license for his land and we have already settled him in a nearby village. The rest of the families did not approach us; maybe it is because they do not have any legal document to prove that they were living in this area. However we will not desert them, and will provide them with alternate lands in due course,” said the Divisional Secretary.
When The Sunday Leader contacted the Director, Coast Conservation Department, to find out whether the Navy has obtained approval, Premaratne said that he has to check the files before making any comments.

“Since we are receiving a number of applications every day and we are in the process of granting approvals, I cannot say off hand whether the Navy has sought approval or whether we have granted them the necessary approvals. Anyway we have to help the Forces as they are guarding us and for defence matters we cannot ask them to obtain our approval. I am going for a meeting at the Defence Ministry now so please call me next week if you need any more details,” said the Director.
All attempts to contact Conservator General of Forests K.P. Ariyadasa for a comment failed.

Facing massive financial losses due to mismanagement…. and Attachment 2
Pricing difference of PV Oil Singapore PTE. LTD

Astonishing revelations have now emerged as to how the Ceylon Petroleum Corporation (CPC) incurred enormous losses over the past one-and-a-half years due to agreements signed by two of its former Chairmen.

Meanwhile questions have been raised as to why the government has failed to probe a blatantly corrupt transaction the CPC entered into with PV Oil Singapore which is considered to be the most outrageous transaction the Corporation has ever entered into in the recent past.

Former CPC Chairmen, Harry Jayawardena and P. Vidanagamachchi are accused of entering into corrupt agreements with PV Oil Singapore which are more favourable to the supplier than the CPC. Due to these scandalous transactions the Corporation has lost a staggering sum of over Rs 3 billion between October 7, 2011 and March 31, 2013.

“Chairman Jayawardena entered into an agreement with PV Oil Singapore on October 7, 2011 to purchase 240,000 MT (six shipments) of gas oil and subsequently increased it to 320,000 MT (eight shipments). When this transaction went through Vidanagamachchi was the Chairman of the cabinet appointed procurement committee. It was initially told that the gas oil would be purchased according to the standard procedure – the average of the Mean Singapore Spot Price of gas oil published in Platt’s Marketscan plus a fixed premium of US$ 1.57 per barrel. We agreed that this is an advantageous rate.  But when we understood that the payment terms of the agreement has been manipulated and allowing the supplier to calculate the price based on the arithmetic average of the mean of low and high quotations of gas oil published by Platt’s Asia Pacific/ Arab Gulf Marketscan for either five consecutive quotes around the Bill of Lading date (B/L date) or any five consecutive quotes during Bill of Lading month declared by the supplier, most of our senior staff were vehemently opposed to this transaction but to no avail.

The agreement had been manipulated blatantly and it is a colossal loss to the already cash strapped CPC. Knowing the financial situation of the Corporation, this transaction is equal to nothing but a shocking crime,” said a senior CPC Officer on conditions of anonymity.

The source further said that had the standard procedure – the average of the Mean Singapore Spot Price of gas oil published in Platt’s Marketscan and a fixed premium of US$ 1.57 per barrel – been followed, the CPC would not have had to pay an additional Rs 3 billion to the supplier.

According to the sources, Vidanagamachchi who succeed Jayawardena as the Chairman too was involved in this practice as he (Vidanagamachchi) not only continued with Jayawardena’s corrupt transaction despite the fact that several requests were made to cancel the questionable agreement, but went ahead to extend the contract further by six months once again amending the payment terms which were more harmful than those of Jayawardena.

“Instead of cancelling the scandalous deal, Vidanagamachchi extend the PV Oil Singapore agreement on January 25, 2012 for another six months to purchase 480,000 MT to 560,000 MT of gas oil with amended terms and conditions which was more detrimental and disadvantageous to the CPC,” he added.

“Vidanagamachchi’s agreement allowed PV Oil Singapore to follow two payment methods – to calculate the price based on the arithmetic average of the mean of low and high quotations for gas oil as published by Platt’s Asia Pacific/Arab Gulf Marketscan during either the month in which the date of the Bill of Lading issued in respect of the relevant delivery falls or the month in which the first day of relevant laycan falls is the suppliers’ option and which was more harmful than that of Jayawardena’s,” added the source.

According to the source, Vidanagamachchi executed this manipulation to give the advantage to PV Oil Singapore so the laycan, which was scheduled for April 29 and 30 could be moved to May 2 and 3 at the discretion of the supplier allowing them another financial advantage of using both months’ pricing formula which cost CPC an additional US$ 1.5 million average per cargo which is nothing but daylight robbery.

“In the same manner Vidanagamachchi misled the cabinet of ministers stating that CPC will buy gas oil from PV Oil Singapore at a premium of US$ 1.57 per barrel but in reality he had amended the payment clause of the agreement to hoodwink the cabinet of ministers and purchased at a premium that ranged from US$ 1.17 to US$ 8.44 per barrel blatantly violating the mandate of the cabinet,” he added.

Meanwhile it has now been revealed how Chairman Vidanagamachchi entered into the said agreement on January 25, 2012 as Acting Chairman and Managing Director of CPC when he was not the Acting Chairman and MD at this time.

“Although Vidanagamachchi entered into this scandalous agreement as the Acting Chairman and MD, it was Vasantha Ekanayake who was overlooking the duties of Chairman and MD at that time. According to reliable sources since Ekanayake refused to sign this agreement which he knew was immoral, he was removed from CPC. If it is true, then not only the Petroleum Ministry but also the government was involved in this scandalous agreement. If so that would be the same reason why the government is not taking any action to probe this matter although CPC employees have repeatedly asked that the wrongdoers be bough to book,” said the source.

Although this scandalous transaction has now been brought to the notice of the higher officials of the Petroleum Ministry and the Treasury according to the source, it is questionable as to why the authorities concerned have been silent over the past three months without holding any inquiry to recover the losses incurred by the CPC from the individuals who were involved.

“The already cash strapped CPC is facing a huge financial crisis because of the mismanagement of its funds. Although the government is trying to imply to the masses that fuel prices have to be adjusted to minimize CPC losses giving various reasons, they never say that the Petroleum Corporation has incurred losses because of scandalous deals and mismanagement of its funds. As a result fuel prices have been increased more often even though the world prices are decreasing. All these are done to cover up their ‘sins’. Ultimately it is the general public that has had to bear the brunt of these ‘sins’. In regard to these particular transactions, we have reason to believe that both Jayawardena and Vidanagamachchi benefited handsomely in addition to those who were behind this deal as they worked closely with PV Oil Singapore to draw money from the CPC’s limited resources,” claimed the source.

According to the source nowhere in the CPC’s history have payment terms were amended to benefit the supplier as it is a colossal loss to the corporation.

“This is the dirtiest strategy both former Chairmen adopted in order to pay PV Oil Singapore more than what actually had to be paid. If the standard procedure was followed, our agent in that country would have sent us the sample report before and after the oil was loaded to the ship which indicates the date. If that was the case then we would have known the date of loading and the supplier could not have given us a higher rate. That was why the supplier was allowed not to send the lab report to us but to send us strait the prices without any indications as to when it was loaded,” said the sources.

Meanwhile, Managing Director CPC Susantha Silva, when contacted, said that he couldn’t make any comment in this regard as the matter is now being probed by the Attorney General.

When asked as to why he (Silva) together with some of CPC higher officials made a visit to PV Oil Singapore two weeks before and whether there is a plan to extend the contract further, Silva did not wish to make any comment.

“Since the matter is now being probed by the Attorney General I cannot say anything. We have answered to the AG’s queries and when the suitable time comes the right person will answer all these questions,” said Silva.

Although several messages were left with Ms. Mallika, the Coordinating Secretary to Petroleum Ministry Secretary R. H. S. Samaratunge seeking a comment from Samaratunge, there was no response from the Ministry Secretary’s office till the paper went for publication.

Meanwhile, a text message was sent to Chairman CPC Tilak Collure seeking a comment with regard to these scandalous deals, but Collure too failed to respond to the message.

Whistle-blower Gets Warning Letter!

Meanwhile, Secretary, Jathika Sevaka Sangamaya Petroleum Branch, Ananada Palitha thanked the newly-appointed Petroleum Minister Anura Priyadharshana Yapa for his quick action to amend the once manipulated agreement to the standard procedure.

“No sooner this was brought to the new minister’s notice, the scandalous agreement was rectified. However we are surprised as to whether CPC is going to purchase gas oil from the same company or will make any changes in future. Since higher officials have made a visit to PV Oil Singapore two weeks before, we assume that future purchases too would be done from the same company which is questionable,” said Palitha.

Palitha further added that because he revealed those deals to the public, Human Resources Manager of Ceylon Petroleum Storage Terminal Limited (CPSTL) P. D. Dharmawansa has sent him a warning letter advising him to refrain from exposing CPC scandalous deals in future. “The warning letter states that because I discredited CPC by exposing the shocking deal, the company can expel me from office if I continue to expose confidential matters to the public. If they can warn us for exposing these issues, why cannot they take action against the wrongdoers who mismanaged public funds in the same manner? These are all public money that has been swindled for the benefit of a few people. I do not think that it is wrong to highlight these issues in public. If not do they want us to hide all these scandalous deals and protect the big time swindlers. The general public has a right to know what is happening to their hard earned money,” said Palitha.

When contacted HR Manager P. D. Dharmawansa as to whether it is true that he has issued a warning letter to Ananda Palitha for exposing the scandalous deals, Dharmawansa said that the matter should have discussed either with the Chairmen or the management before it was leaked out to the media. “Leaking this information to the masses in not good for the company image. We have to take disciplinary action against anyone who breaks our disciplinary rules and regulations,” said Dharmawansa.

When asked whether he as the HR Manager has taken any disciplinary action against the two parties who were signatories to these shocking deals in the same the way he has sent a letter to Ananda Palitha for exposing the truth, Dharmawansa said that he knew nothing about these transactions.

“Ananda Palitha is one of our employees at CPSTL. I cannot take any action against CPC employees,” said Dharmawansa.

———————————————-

No Response!

When contacted Harry Jayewardene for a comment, Jayewardene wanted this reporter to write anything what she wanted claiming that it is the habit of this newspaper to level allegations against people.

“I will not comment on this and you can write anything you want. I too can level allegations against you. Since your paper is famous for attacking people and leveling allegations, I don’t mind what you write about me,” said Jayewardene.

Meanwhile, all attempts to speak to P. Vidanagamachchi failed as he did not wish to talk to this reporter.
Although a message was conveyed to Vidanagamachchi through the Media Officer CPC seeking a comment, he (Vidanagamachchi) refused to talk to the paper claiming that he was busy but to talk to the Suppliers Manager CPC for any comment on his behalf.

However, the gross mismanagement of its assets and lack of accountability by the CEB, which are major reasons for the present electricity hikes are well exemplified by the performance and dividend payback of its investments in LTL Holdings, and the way the ownership of its profitable subsidiaries were stolen by its top management.

According to the CEB’s Annual Report for 2009/2010, the dividend income from its subsidiaries is a paltry total of Rs. 28.193 Mn. The website of LTL Holdings states that its intrinsic value is Rs. 5.0 Billion, of which the CEB owns 63 percent. How is it then that a CEB investment of 3.15 Bn has not provided sufficient dividends to the CEB?

Enter LTL Projects (Pvt) Ltd

Lanka Transformers Ltd. was set up as a subsidiary of CEB in 1982, as a joint venture with ABB of Norway, which initially had a 30 percent stake. When ABB wanted to exit, the management team led by the present General Manager U. D. Jayawardhana negotiated a management buyout. ABB sold its share of 30 percent for a value of Rs. 600 Mn., to LTL ESOT (Pvt) Ltd., while the CEB contributed further 7 percent free shares to this company, resulting in LTL ESOT ultimately owning 37 percent of LTL Holdings, and the CEB holding 63 percent.

The projects division, of LTL was created in 1995, to engage in lucrative project development activities in the energy sector. Subsequently LTL got into the very lucrative thermal generation business with Lakdhanavi, of which CEB holds a 52 percent share through its holding in LTL.

It was LTL Projects which was carrying out the bulk of the sub-contracting work for the main contracts acquired by Lakdhanavi in its thermal generation plants, which included the 25 MW Lakdhanavi Plant and 100 MW Heladhanavi plant – a joint venture with the Hemas Group and some small hydro power plants.

Through a masterful maneuver carried out together with the top CEB management at the time, around 2004/5, the LTL top management was successful in acquiring the highly lucrative LTL Projects (Pvt) Ltd. for ZERO value from LTL Holdings, for LTL ESOT (Pvt) Ltd. This resulted in LTL ESOT (Pvt) Ltd., which is now owned 100 percent by the employees of LTL Holdings, having 100 percent ownership of LTL Projects (Pvt) Ltd., in addition to its 37 percent shareholding of LTL Holdings (Pvt) Ltd.

Ownership of ESOT is sensational

There were seven subscription shareholders comprising the senior management team at the time, each holding a single share. Of this seven, three have already left LTL, and their shares were taken over by the three main shareholders, while the subscription share of the fourth member, was also transferred to the three main shareholders. These three main shareholders are U.D. Jayawardhana, M. J. M. N. Marikkar and Ravindra Pitigalage, who are the CEO, COO and CFO of LTL Holdings respectively. While employees were told that they will hold shares in relation to their position and seniority in the company, they were also informed that the only way to exit from the ownership was to sell their shares back to the Trust at the prevailing market rates.

However no employees at LTL have ever received any documentation on the Trust or on their shares or even the basis of share allocation. Neither has any one received a single share or payment from the Trust when they left LTL.

Notwithstanding the haze in ownership, LTL Projects (Pvt) Ltd., owned by LTL ESOT and the three Directors continues to win over all the contracting work taken over by LTL. The Thermal power projects, which have been contracted substantially by LTL Projects subsequent to the takeover by LTL ESOT, include Lakdhanavi ii, iii and iv, Heladhanavi, and the recently concluded Yugadhanavi power plant.

The Yugadhanavi power plant, the 300 MW combined cycle plant built in Kerawalapitya, is a classic example of how LTL Projects, and LTL ESOT has earned substantially by being the preferred contractor. The total value of the plant is US$ 300 Mn. The entire Engineering Procurement and Construction (EPC) contract was carried out by Lakdhanavi which is also a substantial owner in the project, together with Lanka Electricity Company (Pvt) Ltd. (LECO), and the Employees Provident Fund and Employees Trust Fund (EPF/ETF). The CEB Annual report records a total revenue of Rs. 7.6 Billion as “Setting up of the 300 MW CC (Combined Cycle) Power plant”, and a further sum of Rs. 2.7 Billion as “Technical and Engineering Services for the CC Power Plant”. However, although the revenue has been consolidated in the CEB accounts, no profits have been recorded from these activities for 2009 and 2010. However, activities of this nature usually result in over 25 percent profit, whereby CEB group balance sheets should have recorded a profit of over Rs. 2.5 Bn from this operation.

Out of the entire project cost of US$ 300 Mn, the local contractual cost is estimated easily at over US$ 100 Mn, which is reflected in the Rs. 10 Bn recorded in the 2009/10 revenue of CEB. The reason for CEB’s almost zero profit from such a large revenue, is due to the fact that while Lakdhanavi, which is a CEB group company with a 52 percent
CEB share, it is the main EPC Contractor and the sub contracts for local works and services are transferred entirely to LTL Projects (Pvt) Ltd, without going through proper tender procedures, whereby entire operational profits are ripped from the CEB controlled Lakdhanavi to LTL Projects, and thereby to the U.D. Jayawardhana and his two cronies owned LTL ESOT (Pvt) Ltd., where all the profits in the LTL project operations have filtered through. It is estimated that LTL Projects, and subsequently LTL ESOT, has made clean profits in the area of US$ 25 Mn from the work on the Combined Cycle (CC) plant work alone.

The profits are no doubt sitting in the rich coffers of LTL ESOT. LTL ESOT has over Rs. 1 Billion known reserves in the form of Bonds, Bills and even Fixed Deposits of over Rs. 600 Million just sitting in one branch of a local private bank in Cinnamon Gardens.
The LTL employees who have left, and who are still in employment at LTL, are completely clueless on the ownership and operations of LTL ESOT. On paper, the original seven subscribers are still on board. However, none have received any documentation and neither has any other employee received any documentation at all in the form of annual reports, accounts or financials, or indeed dividends.

So the million, or rather billion dollar question is, how did the most lucrative subsidiary of LTL, LTL Projects, which could have brought in so much profit for CEB, end up in the private hands of the LTL’s top three? And how, despite being a subsidiary of a state Board, did they manage to operate this company in utmost secrecy, (last annual reports submitted to the Company Registrar on 7th November 2008 for LTL Projects and on 14th January 2008 for LTL ESOT), and hide profits that would otherwise have been mostly due to their other subsidiaries where CEB is the major shareholder?
All attempts to contact the persons named herein had failed at the time of going to print.

Investigations Desk

LTL PROJECTS (PVT) LIMITED – PV 2737/ PVS 21196
Company Reg Date -  29 February 2008 (New Reg.)
No 48/A. Dickmans Road, Colombo 05.
Company Secretaries – Anthony Naleem Swarnajith De Silva
No 31. Joseph Dias Mawatha, Mutwal, Colombo 15.

ANNUAL RETURNS – Form 15 – Last Date – 07/11/2008

BOARD OF DIRECTORS

MR UPALI DAYARATHNA Jayawardhana
NIC 5122973396 V
No 63/3. Galpotta Road, Nawala, Rajagiriya.

MR MOHOMMED NUHUMAN MOHOMMED JALALDEEN MARIKKAR
NIC 632641877 V
No 15. Shady Grove Avenue, Colombo 08.

MR RAVINDRA KUMAR PITIGALAGE
NIC 673600840 V
No 101/3. Kalalgoda Road, Pannipitiya.

SHARE HOLDERS

LTL ESOT (PVT) LIMITED – 1 Million Ordinary Shares

MR UPALI DAYARATHNA

MR MOHOMMED NUHUMAN MOHOMMED JALALDEEN MARIKKAR

MR RAVINDRA KUMAR PITIGALAGE
01 Ordinary Share each

N(PBS) 1210

LTL (ESOT) (Pvt) Ltd. – 19 Nov 2004
N/A 75165 – Company Reg. No.
NPBS 1210 – Reg No. PB 109

Company Secretary

N.A.S. Akuretiyagama
50/9 Madinnagoda Road,

Last Annual Returns Filed on 14/01/2008
Directors

Upali Dayarathne Jayawardhana

M.J.M.N. Marikkar

Ravidra Kumar Pitigalage
Shareholders

1. U.D. Jayawardhana
2. M.J.M.N. Marikkar
3. R. K. Pitigalage
4. W.D.A.S. Wijepala
5. Dhammika Ajith Jayathilaka Nanayakkara
6. Sudath Annasiwatte
7. Kanahela Bandarage Manjula Ignatius Perera

LTL ESOT (Pvt) Ltd.

There is a cash fixed deposit of SL Rs. 645 Mn., at Hatton National Bank Cinnamon Gardens Branch.
There is other funds on treasury bills and Repos.

The increase in electricity tariffs further burdens the apparel industry workers who are already facing great hardships. The apparel factory owners are also serious about moving their factories to countries more lucrative to their business such as Bangladesh, Myanmar and Vietnam. According to garment factory workers, who are mostly from outstation areas, following the electricity tariffs increase, boarding fees has also increased leaving them nothing to take back home.

However, when the workers took their grievances to their employers and requested them to increase salaries, they declined claiming that even running factories in this condition is doubtful. They claim that having been hit very badly by the GSP plus removal, the increase in electricity tariffs is practically the final nail in the coffin because it is impossible to operate companies and be competitive in the field with such high costs.

Meagre salaries

Speaking to The Sunday Leader Chamila Fernando, a resident of Matara said that her salary is Rs. 13,500 per month. “I was paying Rs. 2,750 for boarding place and now its owner tells that following the electricity rate the boarding fees too will be increased by 60%. Once we paid the lodging charges and charges for other basic necessities we have nothing to take back home. This job no longer benefits us and I now think if it is worth it to continue in this field,” she said.

Lalitha, another worker employed at the Katunayake Free Trade Zone claimed, “My salary is about Rs. 14,000, and I am now forced to pay Rs. 4,000 for the boarding place. Once I pay it only a mere Rs. 10,000 is left for my other commitments. At this rate how do we survive and what is our future? We are in a dilemma as to what would happen to us because we hear that the factory owners are considering moving to other countries that have cheaper overheads. There is also speculation that the garment factory owners are to import cheaper labour from countries such as Bangladesh and Myanmar. If this happens what is our plight? We have worked in this trade for so long and we have given our blood, sweat and tears to the industry. Why is the government not helping us?” she lamented.

Other side of the coin

Meanwhile, the boarding house owners claim they too are finding it difficult to survive as the electricity rate increase not only affects the monthly electricity bill but it also has an impact on all other essential commodities. S. Weerasinghe who runs a boarding house in Katunayake said that he had been operating the facility for the past 10 years, now it is increasingly difficult to provide food and lodging at such low rates. “I understand that it is hard for these workers to bear the increasing boarding house fees. But we and our families too have to survive and this is our only income. The electricity rate hike will increase the prices of food items as well and we cannot bear the burden. Sometimes the occupants fail to pay the boarding house charges on time due to their commitments. But we are also helpless. We can do nothing either. I wish the government would do something to cover the losses incurred by the CEB and not keep taxing the people at every turn,” he added.

Meanwhile, Convener and General Secretary of the Free Trade Zones & General Services Employees’ Union (FTZ&GSEU) Anton Marcus told The Sunday Leader that the 60% increase in electricity rates was the highest increase ever imposed in the country.
According to Marcus, about 50,000 garment workers are employed in the Free Trade Zone. “They receive a basic salary of less than Rs. 10,000 and they have to manage their expenses with that amount, and with the increase in boarding house fees they will not have anything left to take home. The majority of the workers in the FTZ garment sector are migrant workers living in private boarding houses. Their owners inevitably will raise the charges because they have no other option. On the other hand, the employers now agitate claiming that they are badly affected with the power rate hike. We are certain they will curtail most facilities the workers enjoy to reduce overheads. The employers will also deny employees’ future demands,” he warned.

Unfilled vacancies

He said that over 30,000 vacancies were in the garment industry now and the number would increase since the workers would leave and return to their villages or find alternative employment because they would not receive any benefit being in the field. “Then even the boarding house owners will be affected without their income. Therefore we are signing this petition together with the FTZ workers, boarding house owners and even shop keepers in protest of the electricity rate hike that will certainly have a negative impact on their income,” he said.

The petition was signed on April 30 at the Katunayake Free Trade Zone main gate and in Biyagama industrial area.
Marcus further said that the Apparel Exporters’ Association had decided at its annual general meeting that it was going to import workers to fill the vacancies from Bangladesh, India and Bhutan.

Migrant workers

“They know that the conditions in Bangladesh are so bad with the deplorable safety records. They would prefer to come to Sri Lanka and work. The Apparel Exporters’ Association said that it was even prepared to provide hostel facilities for the migrant workers. However, it is not willing to provide hostel facilities for the Sri Lankan workers already employed in the garment sector and to ease their burden of boarding house fees, etc. It is clear by the AEA actions that its members are planning to provide the workers with hostel facilities within their factory premises, so that they could keep them inside as bonded labour and get them to work 24 hours.

Already migrant workers are employed in the ironing sector under the tourist visas, and they cannot go out from the factory premises as they could be caught and deported. The BOI has arranged to give some migrant workers service permits under the tourist visa, which is completely unlawful,” he stressed.

“If the situation continues, Sri Lanka too will be converted into a Bangladesh with poor facilities and deplorable working conditions” he warned. “Earlier we told the Bangladeshi government to take Sri Lanka as a model, yet today the tables have turned. If the Sri Lankan employers are going to continue in this manner they cannot claim that the garments produced in Sri Lanka are guilt-free garments. When workers are available in Sri Lanka for the garment sector and the employers are ready to improve the working conditions, and pay reasonable salaries, their effort to import labour is very sad. The government has provided all infrastructure facilities for investors to start up factories because they are supposed to generate employment, but if they are not doing so, the government should cancel their licences.

The government has granted them facilities with the people’s taxes and they owe it to the people. Finally what will take place is Sri Lanka will lose its markets in Europe and America. Now Sri Lankan garments have a good market because its quality products,” he said.

“If the government continues in this manner, we will certainly rally the workers and protest making the world aware that the garments produced in Sri Lanka are not guilt free, which will certainly affect the industry,” he warned.

Revised electricity tariffs effects

Instead of taxing the consumers the CEB could cover their losses if they would recover arrears due to them from several government institutions. It has to obtain 13,758 ordinary and 1,003 bulk supply accounts that are in arrears amounting to Rs. 324,85 million and outstanding Rs. 1705 million as at November billing date 2012, excluding the November Bill.
Meanwhile the government has decided to revise electricity tariff enabling the consumers who use only 61 to 180 units to receive a 25% fuel surcharge reduction.

According to the Ministry of Power and Energy those using less than 60 units do not have to pay any tariff increase as per the President’s May Day pledge.

Tea Smallholders Lament

Sri Lanka’s tea smallholders, who account for 79% of the national tea output, warn the high production cost can affect the entire industry reducing adversely the national tea output.
Speaking to The Sunday Leader the organiser of the National Federation of Tea Small Holders, Lal Premanath said that earlier a cess tax was charged from exporters and it was deposited and directly used to uplift the tea industry. “But it is now being deposited in the treasury. The new method reduces benefits for the tea smallholders,” he said.

“Recent past, about nine Ceylon Tea promotional centres had shut down even though they were set up spending a large sum of money. Although we had many tea researchers carrying out tests and researches on tea and other related fields to enhance the production, today due to the lack of funds these researchers have either sought alternate income sources or have migrated. Today small scale tea producers have to pay even to a soil sample test,” he said.

He said that tea smallholders are finding it hard to sustain because of the increasing production cost, mainly driven by higher labour costs. “Last year the country’s income from tea exports was about Rs. 355 million, while 79% was by tea smallholders. The smallholders have cultivated about 220,000 hectares in 12 districts and about 500,000 tea smallholders are in the country. Almost three million people throughout the country are in the tea industry directly or indirectly. The three main regions cultivated by the smallholders are Ratnapura, Galle and Matara. However the production cost per kilo of green leaf is about Rs. 55.00 while the market price currently is only about Rs. 55.00 to 60.00, while in certain instances the tea smallholders in fact have to bear losses,” he added.

Re-cultivation which is done once in 12 years is impossible now. It indicates a certain bleak future for the tea industry, added Premanath. “Sri Lankan tea which was in the forefront has now declined to around the fourth position in the world market, while countries like Vietnam, Kenya and China grabbing the international market. It has been a disastrous blow to the industry and now the tea industry is staggering to survive the increased electricity tariffs. The increased electricity charges will also have an impact on transport and processing cost increasing the total production cost drastically making it impossible for the tea industry to be competitive in the world market,” he warned.
Premanath further added the reputation that Ceylon tea enjoys in the world is fast deteriorating, and if the government does not pay attention to revive the tea industry, Ceylon tea will become a thing of the past.

Polonnaruwa Sanctuary electrification

The Archaeological Department is accused of violating the National Environmental Act and the Fauna and Flora Protection Ordinance in order to obtain electricity to one of the archaeological sites in Polonnaruwa, which is a UNESCO World Heritage Site.
Bringing much destruction to the Polonnaruwa Nature Sanctuary, the Ceylon Electricity Board (CEB) is now illegally erecting electrical posts and installing high tension power lines through the sanctuary from the east of the Rankoth Viharaya towards the Gal Viharaya violating environmental laws of the country.

Although large trees have been cut down in the sanctuary to install the high tension power lines, the Archaeological Department as the project proponent has failed to carry out an environmental impact assessment (EIA) and to obtain Wildlife Department approval for the ongoing project.

According to Jagath Gunawardena, Attorney-at-Law specializing in environmental studies, the Archaeological Department has blatantly violated the National Environmental Act (NEA) and the Fauna and Flora Protection Ordinance (FFPO) before starting the project and bringing much destruction to the sanctuary.

“If they wanted to cut down trees or branches in the Polonnaruwa nature sanctuary, the project proponent has to get the Central Environmental Authority and Wildlife Department approvals. For that purpose, they have to do an EIA and open it for 30 working days for public comments. By failing to carry out an EIA before the project was started the Archaeological Department has completely violated the NEA and FFPO. According to Section 7 of the FFPO, it is illegal to bring destruction to wildlife and the Wildlife Department can take legal action against the project proponent,” said Gunawardena.

Reliable sources from the Wildlife Department on conditions of anonymity said that neither the Archaeological Department nor the CEB made any request for permission to install an overhead power line through the sanctuary.
“As usual none of these departments make any request to obtain Wildlife Department permission before destructing the sanctuary and wildlife. It is illegal to remove trees or even to cut branches. Although the Wildlife Department can take legal action against Archaeological Department and CEB for the destruction caused to the sanctuary and the wildlife habitat, it would never happen as in the case of other places as well,” said the sources.

Meanwhile, an environmentalist on condition of anonymity said that it is questionable as to how the authorities concerned refutes allegations levelled against them for erecting electrical posts and high-tension wires within the sanctuary.
“These electrical posts have been erected in the center of the sanctuary alongside the road that leads from Gal Viharaya to Lotus Pond and Tivanka Image House. These high-tension wires and posts pose not only a threat to wildlife but is an eyesore in a place of natural beauty. The CEB workers are hurriedly carrying out the work in the hope of completing the work before any legal action is taken against them,” added the sources.

The sources accused the Central Cultural Fund and the Archaeological Department for the lame excuses given that lighting is essential because of a looming threat to the archaeological sites.

“When these archaeological sites already have underground electrical supply that was installed with a foreign donation about 15 years ago, why do they want another power supply? If the existing wiring system is now out of order, the CEB can easily re-wire the sites and save millions of money to the country. In addition, how can the Archaeological Department claim that there is a looming threat to the ruins from treasure hunters when there is a contingent of security guards to provide security? If these ruins could be protected from the terrorists even during the height of the war, why do the Central Cultural Fund and the Archaeological Department now want more illumination to these sites. Providing electricity for any place of religious or for an archaeological site is laudable as they are part of our heritage but destroying the sanctuary to provide an additional electricity supply is not acceptable,” added the sources.
The sources further claimed that, had the Archaeological Department made a request to the CEB, to bring the high tension wires under ground, there wouldn’t have been any impact to the wildlife.

“Either the Archaeological Department would have requested the CEB to erect these electrical posts and the wires along the sanctuary boundary line or laid it underground; we would not have opposed the idea. But since these wires go right across the sanctuary the wildlife will face a great threat,” added the sources.

However refuting allegations, the Director General Archaeology Dr Senarath Dissanayake said that he knew nothing about any destruction to the nature sanctuary and added that it was the responsibility of the CEB to look into it.
“We asked the CEB to take the power line along the sanctuary boundary line. This lighting programme was initiated on a request made by President Mahinda Rajapaksa at the provincial progress review meeting and all the meetings were coordinated by the District Secretary Polonnaruwa. Ask the CEB and the District Secretary as to why they are providing electricity supply through the sanctuary,” said Dr Dissanayake.

When asked whether the overhead power lines will go through the archaeological sites as well, Dr Dissanayake said that not a single electrical post would be erected within the archaeological sites as it would visually pollute the ancient ruins.
“Although overhead power lines are fixed when it comes to the archaeological sites they would go underground. The illuminations within the archaeological sites should be concealed and dim,” said Dr Dissanayake.
Asked whether his department carried out an EIA before the implementation of the project, Dr Dissanayake said that it was up to the CEB to carry out the necessary assessments.

“Ask the CEB about it as it is their responsibility,” claimed Dr Dissanayake.

Meanwhile District Secretary Polonnaruwa Nimal Abeysiri said that the plans to erect all the electrical posts had been carried out on the directives of the Archaeological Department but not by him (Abeysiri) or the CEB.

“We have not cut down trees or erected these posts through the sanctuary. These are baseless allegations. It was President Rajapaksa that wanted us to provide the much needed illumination to the archaeological site, which is one of the UNESCO World Heritage Sites. All the stakeholders including the CEB, Central Environmental Authority (CEA), Central Cultural Fund, National Water Supply and Drainage Board, Road Development Authority participated at the progress review meeting headed by the President. I cannot take any blame as I only coordinated the meetings held later but did not take any decision,” said Abeysiri.

However, Deputy General Manager, Ceylon Electricity Board North Central Province Gratien Muthukudarachchi confirmed to The Sunday Leader that overhead power supply connection through the sanctuary to the archaeological site was now underway.
“Since it costs a lot of money to provide an underground power supply to the archaeological site, the high tension wires are going above the ground within the sanctuary. Underground power supply will be given only to the archaeological site. The CEB’s responsibility is to provide the power supply as required by our consumer. It was the Archaeology Department that decided as to how the power lines have to be drawn whether overhead or underground. It is the government that funds this programme not the CEB as claimed by certain parties,” said Muthukudarachchi.
However he claimed that the overhead wiring would not bring any adverse impact for the wildlife as they use insulated (covered) wires.

All attempts to contact the Director General Wildlife H. D. Ratnayake and Chairman CEA Wimal Rubasinghe for comments failed.

By Faraz Shauketaly

Brand Sri Lanka is marketed as being “Miraculous” and thousands of visitors to the island most certainly feel that way after a week or two of fulfilling sun, sea and historic culture. Many however miss the miraculous service delivery of some of the politicians in the country. The recent price hike in electricity and the subsequent allegations and counter allegations made by successive decision makers in the power sectors also call this miraculous nature to question! One Minister appears to have underplayed the role he has had in almost ensuring that the price of electricity would be on the up. Today we can reveal the true extent of the grave role played by Ministers and other officials – entrusted with protecting the peoples’ interests – in the parlous current state of a part of the energy sector in Sri Lanka during their tenure as Chief Operating Officer of the peoples’ energy requirement. Even if we say so ourselves, it makes compelling reading.

Much of the high cost in electricity today is a result of years of ill-informed political decisions fuelled by what some now term ‘the diesel mafia-leaning’ public officials’ recommendations. For instance what was perceived in 1996 to be a short-term emergency-led measure, the reliance on ‘emergency power’ had started. Aggreko – one of the bigger beneficiaries of emergency power – the company that came in 1996, has never left Sri Lanka since. In short because they almost always had a contract for the supply of ‘emergency power’ at all times for the past 17 years. It is estimated that on average, Aggreko alone may have billed the Ceylon Electricity Board (CEB) well over US$ 100 Million. A staggering amount of money that could have been capitalised in a far more long-term fashion and which over a period of time would have ensured cheaper electricity prices.

25 MW plant in Jaffna

When one individual took over as the Minster of Power and Energy, the CEB had already planned to discontinue the Aggreko plants and build its own plant at Chunnakam to supply electricity to the Jaffna Peninsula. This plant would have become operational in 2011, if implemented according to original plans. However, he stopped this project – did not approve its implementation – and extended the Aggreko contracts for one more year. His choice of Chairman of the CEB extended this contract without seeking Cabinet approval. Additionally, several concessions to Aggreko were granted when extending this contract. When engineers gave publicity to this highly irregular action in April-May 2011, Ministry Secretary M. M. C. Ferdinando sent a letter calling explanation from the Chairman for not obtaining Cabinet approval. The Minister, it could be said, had saved the Chairman by submitting a Cabinet Paper and obtaining covering approval – with the effect of granting approval for his actions per se. However, this Cabinet paper did not discuss any of the concessions given to Aggreko which carried significant financial implications.

One year after virtually stopping the proposed 25 MW power plant in Jaffna, it appeared the Minister was to realise his mistake and it was left to the CEB to award a tender for this plant to be completed on a fast-track basis. When bids were called, the Technical Committee recommended the offer by LTL Projects but there appeared to be a need to award the contract to a Korean company. Despite what a source described as “attempts at intimidation”, the engineers stood by their decision and the contract was finally awarded to LTL Projects. This plant was completed within one year.

The Ministry of Power and Energy has simply failed to take advantage of what promises the Norochcholai Power Station had in store. Instead of helping to reduce the cost of electricity, the flagship project for the power sector in Sri Lanka has in fact cost the people far more than steadier prices. By all accounts some of the financials of the project are creditable and offers financial stability in terms of the pricing and repayment. However, when it came to handling of the delivery, there have been numerous claims and counter claims pitting professional Chinese against professional Sri Lankans with some sections of the CEB highly critical of the Chinese contractor for not supplying the ‘as built’ drawings and technical records and operation manuals required for CEB staff to operate the plant independent of the contractor. There is also disagreement over the standards to which the plant has been built. Are they Chinese or “international” is a question that has been parried between the CEB and the Chinese contractor but as yet unresolved. Coupled with the irregular and controversial supply of coal that was shown to be under tender specifications, but now nevertheless accepted as part of the supply and to be mixed and used, as well as the problematic distribution network; Norochcholai has never been permitted to be able to live up to the gilt-edged promises that accompanied this mega project of national importance.

Sri Lanka’s flagship power station came with high hopes and expectations that the price of power on the island would be steadied. Instead, power cuts returned to the island; and to add insult to visible injury, the cost of electricity has once again been raised. The consumer has been hit with a double-whammy: they pay for higher electricity costs and they pay the interest and capital on the loan of a project that has not delivered on performance.

The Plantation Trade Union Federation (PTUF) has alleged that some thugs sent by the Leader of the Ceylon Workers’ Congress (CWC) and the Minister of Livestock and Rural Community Development, Arumugam Thondaman, had attacked their protest held last week in Kotagala causing injury to the Leader of the Democratic People’s Front (DPF) and former parliamentarian Mano Ganesan. The PTUF also accuses the police of not taking any action to prevent the attack and in fact had been protecting the drunken thugs who were attacking the protesters with stones and clubs.

Speaking to The Sunday Leader the President of the PTUF Mano Ganesan said that the protest was organized by the Plantation Trade Union Federation against the recently signed collective agreement between the Employers Federation of Ceylon (EFC) and the CWC and UNP affiliated Lanka Jathika Estate Workers Union (LJEWU).

“As the President of the PTUF, I played a lead role in the protest. On the day of the protest police blocked all buses carrying our members travelling to the protest location at two points. One block was at the Hatton junction preventing buses entering from Hatton and the other at Pattana blocking buses entering from Nuwara Eliya. They allowed NSSP Leader Vickramabahu, United Socialist Party (USP) Leader Siritunga and I to proceed to the protest location at Kotagala. But they blocked government MPs Digambaram and Radhakrishnan at Pattana. Their plan was to isolate me and others who were with me from the rest of the protesters. When we arrived at the location a group of 50 CWC members suddenly arrived and started shouting slogans against us, particularly against me, and they were all intoxicated. They used foul language on Bahu, Siritunga, PTUF General Secretary Lawrence and me as well as some other supporters who were there,” he explained.

“The CWC men were pushing the police ring. In the scuffle they even pushed Siritunga. Our party’s Kotmale organizer Mayil Samy was manhandled while the policemen were watching. They shouted at me telling me that it is Thondaman’s Raj and told me to get back to Colombo. Suddenly the CWC goons pelted stones. A very sharp solid stone was thrown at my head, but I instinctively blocked it with my bare hands. It was pure luck, I escaped. I would have sustained a very serious head injury if it had struck my head. I knew they were targeting me. My security personnel bundled me into the vehicle. But the stone had injured the fingers on my left hand. I proceeded to the nearby Kotagala government hospital and received first aid treatment. The doctor advised me to stay in the hospital. But I did not want to stay in Kotagala and proceeded against medical advice”

He accused the police of failing in their duty to protect the innocent party and instead protected the perpetrators. “The Police were totally inactive in maintaining law and order. We had announced our intention of conducting this protest two weeks before on 4th April. We had announced the date, time and venue. It was to be held on Sunday, 21st April at 10 a.m. in Kotagala. But on the 20th night, the day before the protest, I came to know that the CWC was also planning to hold a protest at the same venue, day and time. This was a clear indication of a confrontational hostile act. I also came to know that in the guise of a protest they planned to attack us.

This plan was revealed to me by a senior CWC member. I kept most diplomatic missions in Colombo and many of my civil society friends informed of the development and impending danger. Some of my friends wanted me to call off the protest. But we stood by our principles and went ahead with the protest,” he said.

Ganesan said that he had immediately called the IGP on his mobile, but he failed to respond. “Late that night I called Minister Vasudeva Nanayakkara, who is also a member of PTUF and informed him of the CWC’s plan. I requested him to talk to the IGP. Vasu had called the IGP and had kept him informed of the intentions of the CWC and also demanded security for those attending our protest.

But even this advance notice by a cabinet minister did not turn out positively. We were attacked while the police watched in silence. SSP Mahagedara who was at the scene was standing just witnessing the hooliganism of the CWC,” he said.

Ganesan said that the PTUF had immediately expressed its opposition to the collective agreement that was signed on 4th April between the EFC and the CWC and UNP affiliated LJEWU, but they wanted to allow the New Year holidays to pass before protesting.

Explaining the reason that the PTUF had launched this protest he said, “We are not happy with the collective agreement as the current wage components granted in the agreement are not reasonable. The basic wage of Rs. 450, price wage allowance of Rs. 30, attendance allowance of Rs. 140 adds up to Rs. 620. However ETF/EPF contributions are paid only on the basic wage of Rs. 450; therefore the amount of Rs. 620 is only the theoretical salary. Our surveys have found that only about 25 percent of the workers receive the attendance allowance. You have to work at least 75 percent that is around 19 days per month to receive the attendance allowance. Even if you fail by half a day, you lose the attendance allowance for the days you have already worked. It is a trick by the CWC and LJEWU which was agreed upon with the employers.

Most of the workers are getting only Rs. 450+Rs. 30, amounting to Rs. 480 per day. The employers are of the view that the attendance allowance would encourage workers to attend work without fail. But this is not happening as they are also human and have days that they fall ill and face other calamities. These conditions invariably affect all workers and most of these workers are unable to obtain that attendance allowance,” he said.

When asked what alternatives the PTUF proposes he said, “Our alternative proposal is to change the components without changing the total. We demand a basic wage of Rs. 520, price wage allowance of Rs. 30 and attendance allowance of Rs. 70 while maintaining the total at Rs. 620. That means that ETF/EPF contributions must be paid according to the basic wage. This way the worker would be encouraged to attend work. We have the interest of the industry also in our minds. But the CWC and LJEWU not only betrayed the workers but also misguided the Employers Federation of Ceylon. There was no discussion; it was all over in just four days,” alleged Ganesan.

However he said that the PTUF was not only demanding a wage hike but was also fighting for three prime goals. “Firstly, it is the plantation worker’s wage. Secondly, it is land ownership for housing and livelihood and thirdly, the protection and well being of the plantation industry. In addition to the wages issue, the land ownership issue is very important to us. Plantation workers have been promised small plots of land for a very long time by successive governments.

These workers are no longer aliens. They are very much Sri Lankans. They did not come here as aggressors but slaves. They have by their blood, sweat and tears built up the plantation industry. Even today, tea and rubber exports are the frontline foreign exchange earners in real terms. So it is time the workers are brought into the national mainstream. They must be offered plots of land for their housing and livelihood. The unplanted identified land in the plantations should be distributed to them,” he added.

Elaborating on the land entitlement of the estate workers the General Secretary of the United Socialist Party (USP) Siritunga Jayasuriya said that the government has plans of distributing estate land to their friends.

“Our demand is that if these estate lands are to be distributed then the distribution needs to be done in a very transparent manner. Especially the estate workers should be given the opportunity of receiving these lands either through their respective societies or organisations or in some manner. After all they are ones who have been slaving their whole life for the upliftment of the estate sector and they deserve it. The government claims that the estates could be made into profitable ventures by dividing up and distributing the land to small holders. These estate workers are the ones who have been living on these lands for a long period of time and they are the rightful owners. The government should not be allowed to bring in their friends and simply handover the lands to them,” he said.
He said that the previous collective agreement had ended on March 31st, and normally discussions are held between the estate workers and the unions and companies, which sometimes lead to protests, token strikes etc demanding certain wage hikes.

“It is after this that negotiations are held and an agreement is reached between all parties concerned regarding the wage increase. However this time just after the earlier two year agreement expiring on the 31st of March, the Employers Federation of Ceylon and CWC and UNP affiliated LJEWU secretly signed the new collective agreement in a mere four days, without leaving any room for discussions regarding the matter. By their actions they have violated the rights of the estate workers to voice their concerns regarding the wage hike.”

Jayasuriya also refuted claims by the EFC, CWC and LJEWU, that the majority of the estate workers were being represented by them, adding that in fact the majority of the estate workers are with the PTUF.

The Plantation Trade Union Federation (PTUF) brings together 16 plantation-based trade unions including the Democratic Workers Congress (DWC), and all these unions are affiliated to political parties within the government as well in the opposition. They have kept the party and election politics aside to campaign for the trade union rights of the working people in the tea and rubber plantations.

Trade unions of the Democratic Left Front led by Minister Vasudeva Nanayakkara, National Union of Workers led by P. Digambaram (MP), Up-Country Peoples Front led by P. Radhakrishnan (MP) are within the PTUF along with unions led by opposition firebrands like Vickramabahu Karunaratne and Siritunga Jayasuriya.

The decision is that the PTUF does not sign the collective agreement in its present form. Hence they are opposed to it and reject it. The CWC and UNP led union LJEWU have signed the collective agreement with the EFC, which the PTUF considers a sell-out.

Meanwhile, Leader of the Democratic Left Front (DLF), Minister Vasudeva Nanayakkara addressing a press conference in Colombo last week said that he received information about the attack planned against the protestors and had informed the IGP, N. K. Ilangakoon. Yet, the police had not taken any steps to prevent the attack on the protesters. He stressed Minister Thondaman had no right to use government powers to control estate workers, and added he will urge the President to conduct an inquiry regarding the incident and take action against the perpetrators.

In response to the allegations by the PTUF the Deputy Director General of the Employees Federation of Ceylon Kanishka Weerasinghe claims that the collective agreement had been signed on 2nd April between the three unions that represent the majority of the estate workers, and agreed upon the current wage of Rs. 450.00 as the basic daily wage. “In addition to the basic wage they are given an attendance allowance of Rs. 140.00 and price share supplement and many other benefits,” he added.

According to Weerasinghe, the current wage agreed on for the estate workers, has put tremendous pressure on the employers who themselves are struggling to survive. He said that the tea and rubber prices have taken a plunge and in spite of the decrease in revenue, they had agreed on the wage increase this year. He added that even the current increase in wages is costing the plantation companies around five billion rupees annually, which they are already finding hard to bear.

Mano Ganesan however says that he has absolutely no faith in the government or the police with regard to upholding the Rule of Law. He said that the cabinet minister Vasudeva Nanayakkara and MPs P. Digambaram and P. Radhakrishnan and all in the government should answer this question. “I have no faith in this government. The breakdown of law and order is simply visible everywhere. People coming within the regime’s own circle can get away even with murder and rape in this country today.

It is impunity. Therefore if I had been killed it would have been just another news story and not more than what happened to my friend Lasantha Wickrematunge. But now I understand that there is an inner circle within the government and Vasudeva, Digambaram and Radhakrishnan are not in it. This is news to me and to the country.

It is very disheartening that the IGP was unable to adhere to the request of Cabinet Minister Nanayakkara when the good minister had given him advance warning on what was to be expected the next morning,” he said.

In spite of the setback the PTUF is determined to continue the struggle for the rights of the plantation workers. “One should understand that the PTUF is the biggest trade union center in the country today. We have the largest numbers. We have to consolidate it. We will go ahead with strengthening the PTUF to further develop it as a responsible trade union center not only for the workers but also for the industry,” he vowed.

Repeated attempts by The Sunday Leader to contact Minister Thondaman and the police with regard to the allegations against them had failed by the time this article went to print.

Protest against electricity tariff hike

Giving a terrible smack in the face of the ordinary poor and middle class people, the Rajapaksa regime, on the 17th of April, increased the electricity tariffs. This ‘New Year Gift’ of the government, which was under numerous discussions and debates, has now become an unbearable plight to the ordinary public in the country. This is evident from the array of protests and objections against this unfair hike throughout the country.

Instead of using the traditional method of charging according to a unit range, this new and surprising method of calculating the price for each unit from “0” will skyrocket the current electricity bill in twice the amount. The government, by this new pricing scheme, is expecting to supply an additional Rs. 45 billion to the CEB apart from its current earnings.

Govt excuse on the hike

The government repeatedly tried to justify the tariff hike as a step taken to minimize the losses incurred by the CEB. Thus the idea of the ministers who are trying to whitewash the government is that in order to continue the supply of electricity, a price hike is essential. They also didn’t forget to mention that this was not an act which they willingly do.

List of private companies established under CEB and The 14 companies created by CEB

The new Power and Energy Minister Pavithra Devi Wanniarachchi, who stepped forward to justify the government’s action in increasing the electricity tariffs on the 23rd of April, also sang the same old song of losses. According to her explanation, as the income of the CEB in 2011 was Rs. 137 billion, compared to the expenditure of Rs. 156 billion, the CEB has had to bear a loss of Rs. 19 billion.

The reason which was given for it was that the high price the government had to pay to buy electricity and fuel from private electricity providers. The total loss in 2012 has been Rs. 61 billion. When considering 2013, according to what the Minister says, when the expenditure of CEB goes to Rs. 256 billion, the income remains at Rs. 178 billion. And when the Rs. 5 billion profit made by affiliated companies is added, the total income goes to Rs. 183 billion. And when the debts are paid (Rs. 146 billion to the CEYPETCO for borrowing fuel and Rs. 19 billion to the private power plants for buying electricity) the remainder is only Rs. 18 billion. And just to pay the wages of the CEB employees, Rs. 17 billion is needed. And when that is paid, for all the rest of the work in CEB, like generating electricity, distribution, buying material, wiring, etc., has to be done with just Rs. 1 billion. However, all this is just another attempt to justify the price hike that is similar to a highway robbery. According to the government, even though they “Don’t like it” they have to recover Rs. 45 billion from the Rs. 75 billion losses from the pocket of the consumers.

Real story behind the loss

Whatever the Rajapaksa regime and the Energy Minister blabbers to justify this mass robbery, the real reason behind the CEB’s mega loss is not the ‘automatic’ expenditure increase compared to the income. The true untold story of electrocuting the public is the massive amount of corruption carried out by the administration of the CEB led by the Ministers who controlled it.

According to the data revealed by the JVP to the public through public representatives and trade unions, the chairman and the Board of Directors, by investing the money, resources and even the man power, has created 14 companies which do not provide any profit to the CEB. (See Box)

These private companies, who do the same types of work the CEB is engaged in, is using many resources of the CEB ineffectively and the report on CEB prepared by the Auditor General shows that this brings the Electricity Board nothing but more losses.

In the director board of the L.T.L. Holdings Company, in which the CEB has 63% of shares, officials of the CEB are working as its Directors. And furthermore, by deceiving the CEB responsibility, they have created few more companies, like L.T.L Transformers, L.T.L. Galvanize, Lanka Industries Products, and L.T.L. Energy etc. And in the Nivindu (Pvt) Ltd, in which the CEB had 53% shares in 2005, has now been dropped to 28.3%. The L.T.L. Projects Company, in which the CEB had 63% shares in 2004, has now dropped to an utter zero, where the board has no authority of it anymore.

This is how the government officials with the blessing of the political wing, put the CEB on the Guillotine of Privatization. What all these companies do is nothing but expanding their pockets by providing the same services to the CEB. This racket can be easily identified by looking at the day to day procedure of these companies.

It is now crystal clear that the ones who are really responsible for the crime of giving losses to the CEB is not the general public who has been forced to pay the ransom, but the government and its bureaucratic Mafia who has created ways to engage in corruption.

History of CEB losses

Year Rupees Million
2005 6,851
2006 6,125
2007 14,812
2008 33,870
2009 11,210
2010 4,962 (profit)
2011 19,000
2012 61,000

According to the contracts the CEB has entered into with private companies to buy electricity, up until 2023, even though the board buys or not the energy, Rs. 150 million must be paid to these companies. This is the electrocuting weight the government is trying to impose on the general public.

Results of this public robbery

It is more than clear that the government is engaged in a daylight robbery of public money through these unfair tariff hikes. For the one unit which goes from units 90 to 91, the electricity bill exceeds by more than Rs. 1,000. When the government is increasing the electricity prices, naturally all the industries, businesses and services which are woven around it are also increasing their prices. The government has smacked the rich and poor in an unequal manner and specially, the users who use electricity in the range of 90-120 units, has to pay more than those who use above 500 units. (Only 1.2%)

This is how the Mahinda Chinthanaya has built the future of the rich. When they reap the lion’s share, it is the poor who always gets trampled.

Through these increase of tariffs, this government has shown all the forms of an existence of a Capitalistic government. Compared to this, the Prime Minister of Bulgaria has resigned from his post when 40 people got injured in a rally held against the increase of electricity tariffs. But that is Bulgaria. This is Sri Lanka. Here we need more power to chase away the corrupt leaders. Not only by chasing away the governments, the whole system of public trampling governments must be changed. This is the New Year message the government is giving to the people of Sri Lanka.

One of the privately owned long-haul carriers taking aviation fuel to Mattala and Mattala airport

The already cash strapped Ceylon Petroleum Corporation (CPC) is facing further financial losses due to the transportation of aviation fuel to the Mattala Rajapaksa International Airport from the Kolonnawa refinery, claim trade unionists.

Non-availability of aviation fuel tanks at Mattala Rajapaksa International Airport and Hambantota Port has resulted in the Ceylon Petroleum Storage Terminal Limited (CPSTL) a subsidiary of CPC, sending aviation fuel to Mattala regularly in private road bridges (long haul vehicles) at a massive cost to the Corporation.

“For each load of aviation fuel that is sent to Mattala we have to spend Rs. 64,000 as transportation costs. Had we got the aviation tanks at Mattala and Hambantota we would have sent them by sea or if we have our own fleet of road bridges we would have minimized the losses,” said Secretary of the Jathika Sevaka Sangamaya Petroleum Branch Ananda Palitha.

According to Palitha, had the CPSTL its own fleet of road bridges, the transportation cost could have minimized. He said that the corporation’s failure to purchase road bridges over the years had clearly demonstrated the incompetence of the CPC and CPSTL Managements – both comprise the same Board Members.

“When plans were drawn to build the Mattala Rajapaksa International Airport, the CPSTL signed an agreement to supply aviation fuel for the aircraft. Later the management knew that the aviation fuel tanks either at Mattala airport or at the Hambantota Port were not ready to stock the needed aviation fuel for the aircraft that land at Mattala. But they still failed to purchase the necessary number of road bridges to transport this fuel, which is questionable. There was enough time for the CPSTL to call for tenders and purchase those road bridges but they were not interested to do so as they wanted to allow their ‘friends’ who own road bridges to earn extra money,” alleged Palitha.

Five private owned road bridges have been especially epi-coated by the CPSTL to transport aviation fuel to Mattala, which has cost CPSTL Rs.3 lakhs per Road Bridge. According to Palitha this amount would be deducted from the transportation fee.

“The CPSTL is supplying aviation oil to aircraft for the past 40 years but it is a pity as to why they failed to purchase the required number of road bridges in time. The CPC management is now claiming that calling tenders and to purchase these vehicles complying to government regulations takes a long period and that was why they could not purchase the road bridges by the time the airport was opened. This is hilarious. When the management has failed to abide by the government regulations when purchasing fuel which led to much pandemonium, why are they so particular about following government regulations when purchasing road bridges?” asked Palitha.

According to Palitha, had the CPSTL had their own road bridges with a capacity of 33,000 liters, they would have epi-coated them in order to carry aviation fuel to Mattala.

“Had the Hambantota port aviation tanks were ready by the time the airport was opened, CPSTL would have shipped the fuel consignments to Hambantota which would have cost less. From Hambantota port the fuel would have been transported by road since pipelines are yet to be laid from the port to the airport. Sending fuel to Mattala all the way from Kolonnawa in road bridges is an utter waste of money as we are an almost cash strapped institution. We are losing more money now,” said Palitha.

He further said that although the government kept faith in the Chinese to construct the aviation fuel tanks at the Hambantota port, the five aviation fuel tanks that have been constructed is not up to the standard.

“In these five tanks we can only store petrol or diesel but not the aviation fuel. These tanks have to be modified to international standards to store aviation fuel. Had they consulted the CPC, the corporation would have certainly helped to construct the five aviation fuel tanks but due to their failure, the government is losing more money,” added Palitha.

Palitha further observed that that it would be inevitable to stop fuel prices going up in the near future to cover up the losses.
“Although the CPSTL has got to pay transport fees for the road bridges that carry aviation oil to Mattala, there is no way how they can recover them as the aviation fuel cannot be sold for a higher price. If we do that, the airlines would re-fill aircrafts from Chennai.

Ultimately it is the general public that has to bear this extra expenditure. Very soon the government will increase fuel prices to cover up their ‘sins’ and burden the downtrodden masses,” said Palitha.

Meanwhile, a senior official at the CPC on condition of anonymity told The Sunday Leader that the ground under the oil farm at Hambantota port had started sinking and there were many construction defaults in the five aviation fuel tanks.

“This is dangerous. This would have been identified earlier. There are five tanks to store petrol and diesel and five tanks for aviation fuel. If part of the oil tank farm has started sinking what would happen to the ten tanks in future. If the tank areas too begin to sink when the tanks are full with fuel, the consequences would be grave. Since the work started without a proper evaluation this would happen even in other parts in the port in future as well,” said the sources.

He further said the main reason for the delay in constructing Mattala aviation tanks was because the plans that were initially drawn were not in a proper elevation.

“We had to get the plans re-drawn as there were many defects. Initially the elevations were not equal and that was the main reason for the delay. We have now accelerated the work,” said the sources.

Meanwhile, Managing Director, Ceylon Petroleum Corporation, Susantha Silva said that although there is a delay in purchasing the road bridges, CPC is in the process of getting down the necessary number of road bridges at the earliest.
“We cannot go to a certain place and purchase these road bridges, the way we purchase a motor vehicle. We have to call for tenders and then follow the government procurement procedure. That is why the delay is,” said Silva.

Silva further said that they had to face this situation because the Hambantota port aviation fuel tanks were not ready for storage.
“Since five aviation fuel tanks were under construction at Hambantota port we did not have a rush to purchase these road bridges earlier. However when we understood that these five tanks couldn’t be used to store aviation fuel by the time the airport was opened we had to accelerate the Mattala construction work. However that too did not work, as the Mattala aviation fuel tank construction plans were not in line. There was an issue with night work at Mattala because elephants started entering the construction areas and then came the unexpected rain for one month. In addition, installing the fuel hydrant system (fueling to aircrafts) is very sensitive and takes a long time. All these work cannot be completed within a shorter period. That is where the delay was,” claimed Silva.

However, Silva said that the two aviation fuel tanks at the Mattala airport would be ready to store the fuel by September this year and added that aviation fuel is not send to Mattala every day since there is no necessity.

“Once we finish the work by September, we will then draw plans to lay pipelines from Hambantota port to the Mattala airport to take the aviation fuel. Until then we will have to send the fuel to Mattala in road bridges. For the past week we only sent five loads to Mattala,” said Silva.
Asked as to how the CPC is going to recover the money that is paid as transportation cost for the private road bridges, Silva said that there was no way the corporation could sell the aviation fuel for a higher cost as the airlines would then go to the nearest airport to re-fill their aircraft which would be a colossal loss to the country.

“True we are now paying transport charges but still we cannot increase the aviation fuel prices. We have to supply the fuel to the accepted prices. Transporting the aviation fuel to Mattala from Kolonnawa is not a huge loss to the corporation. The difference between fuel transportation from Kolonnawa to Katunayake and Kolonnawa to Mattala is not a big difference as claimed by the trade unionists,” added Silva.

Asked as to how this transportation cost, which cannot be recovered from the airlines, would be settled and whether it would be recovered from the general public by increasing the fuel prices, Silva failed to give a proper answer.
“Since it is not a big loss, we would certainly not put the burden on the general public. All these allegations are made to mislead the masses,” said Silva.

Also, Colombo District UNP Parliamentarian Ravi Karunanyake said that governments’ ‘sins’ have to be borne by the general public.
“All these projects are white elephants. We had to tighten our belts over the past several years because of the unsuccessful Magampura Port (Hambantota port) and the Mattala International Airport. This is complete misuse of capital expenditure. Rs.68 million was spent on an unsuccessful seaport at Magampura and Rs.38 million at an unsuccessful international airport at Mattala. Have we ever benefited from these two white elephant projects? That is why I am saying that these are international jokes. How many ships have come to the Magampura port and how many aircrafts have landed at Mattala airport by now? This is utter waste of poor man’s hard earned money. This is the first time we have ever heard of an international airport without an aviation fuel tank. When I raised this question in parliament, Ministers Dr Sarath Amunugama and Susil Premjayantha accused me for levelling baseless allegations. Civil Aviation Minister Priyankara Jayarayne said that he would give me a return air ticket free of charge to go to Mattala and to see whether what I said was true or not. All these jokers are trying to mislead the people but what I am saying is the truth. If the aviation tanks are in order at Mattala why do the CPC send fuel stocks everyday to Mattala to meet the demand?” said Karunanayake.

He further said that he had come to know that the tank farm in the Magampura seaport had started sinking and added that the fate of the constructed tanks in the port is unknown.

“I challenge the Civil Aviation Minister to take me to the Magampura sea port, the Mattala airport and also to tell whether his ministry conducted an Environmental Impact Assessment (EIA) before the start of the Mattala project. Minister Priyankara Jayaratne would certainly not come forward to take up any of my challenges as he has lied to the people,” said Karunanayake.