Financial Times

The Tea Association of Sri Lanka (TASL), the much-talked-about body launched in mid-2003 under the then ruling UNP’s Regaining Sri Lanka initiative for the industry to develop and promote tea, is dead as a dodo with little or no new activity.

Two subsequent changes in the government: the UPFA-JVP combine taking over in April 2004 and then Mahinda Rajapaksa winning presidential polls last November bringing in his own team and policies, have compounded the crisis. At stake is an industry body that started with a lot of fanfare but is heading for a natural death by 2008 in a costly experiment worth millions of rupees.

“Nothing is happening there. We are doling out money for operations but there is no activity. So far Rs 21 million has been provided for the upkeep of the organisation mainly as operational costs. There is no activity,” said Ranjit Premadasa, project director at the Plantation’s Ministry Plantation Development Project which is overseeing the body.

“I also have an audit query (ADB) as to money spent and work done,” he said adding that the 6-year funding ends in 2008.

The TASL was set up to take over some of the main functions of the Tea Board like promotion, development and research and leave the Board to operate as a state regulator. The plan came from a US-based consultancy A.T. Kearney study and ADB promised funding for this private sector-led body. But at the inception some stakeholders were wary as the study was done by Kearney’s Indian office and triggered concern that there could be Indian influence in the plan. India and Sri Lanka are competitors in tea.

Industry officials point to a combination of issues and complex problems within the private-sector industry itself for the failure of this institution. Among them: private sector stakeholders serving on the TASL board unable to arrive at a consensus in decision-making; the same stakeholders serving as directors of the Tea Board and unable to come up with a clear division of roles; new administrations not paying any attention to the TASL and on the contrary recruiting more staff to the Tea Board.

Padma Nanayakkara, TASL’s current chairman in rotation as chairman of the Private Sector Tea Factories Association, said there were all kinds of problems but the biggest issue was political changes. Malin Gunatillake, Secretary General of the Planters Association (a TASL stakeholder), said the industry is perplexed over the future of the TASL. “We are waiting for a word from the government as to what its policy is on the TASL,” he said.

Niraj de Mel, former CEO of the TASL who then moved to the Tea Board as chairman until late last year, clarified some of the issues as to why the TASL is aimless, saying: “One of the problems is that some different stakeholders were not fully consulted when it was set up.” He said it took a whole year to bring stakeholders to some form of consensus building but at the same time, the government changed hands.

Industry analysts said more than 40 staffers at the Tea Board were retrenched under the downsizing plan at the board but in January this year the board – keeping to the government promise of providing jobs to unemployed graduates – recruited an equal number or more of new workers.

But the road to disaster actually happened because private sector stakeholders representing producers, brokers, exporters, traders and factory owners just couldn’t see eye to eye on common issues and were concerned only about their own short-term progress, the analysts said.