The Political Column

16th June 1996

Package: what will be its future?

By Our Political Correspondent


Is the devolution package at a breaking point? Would it be abandoned before schedule? Would this package also meet with the same fate as the earlier initiatives. These are some of the questions being asked in quarters that are interested in a political solution to the bloody ethnic conflict that has plagued our country for the past 20 years.

Judging from recent developments it is clear that opposition to the package in the UNP has gathered support and the predominant opinion that the package should be dumped is emerging. President Chandrika Bandaranaike Kumaratunga's recent utterances and references to the UNP have no doubt angered the UNP rank and file. There is a strong opinion taking roots in the UNP that the party should not have anything to do with the package until and unless the government gives up its slander campaign of the UNP leadership through the state media.

A statement made by UNP veteran A.C.S. Hameed in his constituency analysing the merits and demerits of supporting the devolution package which was given publicity in one of the Sinhala daily papers came up for discussion at the last UNP Working Committee, on a question raised by Dr. Stanley Kalpage.

Mr. Hameed's contention was that there was substantial opposition among certain sections of the Sinhala people to the devolution package especially with regard to the proposed change to Article (2) of the Constitution which protects the unitary status of the country. On the other hand Mr. Hameed maintained that the UNP had a sure vote bank in the minorities and that the UNP could not win general elections without the support of the minorities. Mr. Hameed pointed out that in 1960, UNP won 50 seats out of a total of 157 seats. When Mr. Dudley Senanayake dissolved Parliament and went to polls again in July 1960 campaigning against the proposals of the Federal Party, the UNP was reduced to 29 seats. Further Mr. Hameed said that in 1970 when the ruling UNP was routed and reduced to 17 members practically almost all the 17 seats won by the UNP had a large concentration of Muslims, Tamils or Christians. Furthermore, Mr. Hameed maintained that 12 former UNP Ministers and MPs had signed the Mangala Moonesinghe report which recommended a scheme of devolution on lines similar to what is provided in the Indian Constitution.

Mr. Hameed maintained that in the absence of UNP support for the package the President who is saddled with a sinking economy was bound to heap the economic burdens on the UNP and maintain that the prices could not be brought down or unemployment problem could not be solved and the war could not be concluded because of the UNP's refusal to support the package. On the other hand Mr. Hameed argued even if the UNP supported the package, still it would not be easy for the government to bring down the prices or to solve the unemployment problem or even to achieve permanent peace. Mr. Hameed said there was a difference between opposition to the government and opposition to the package.

Mr. Hameed's arguments had very little acceptance among the members of the Working Committee. Ronnie de Mel who had earlier told the Select Committee that the UNP would not support any change in the unitary character of the Constitution, said that he too had earlier thought on the same lines about the importance of the minority votes as Mr. Hameed had explained. But now he said he had been compelled to revise his opinion in the light of political realities. He said if the UNP supported the devolution package he doubted whether the UNP could even get 2000 votes in the South. He said the aspirations of the various minorities could be met by increasing the number of seats for them in Parliament and in the Cabinet. He said that the system of government prevailing in India was one of the worst dictatorial systems in the world.

Dharmadasa Banda said he too did not agree with Mr. Hameed's assessment. In his opinion the setback in the 1960 July general election was because of the coalition of opposition parties. He said that in defending the rights of the minorities the UNP could not sacrifice the goodwill of the majority community.

A.R.M. Mansoor, a former Minister said he could not agree with Mr. Hameed's assessment. He said the introduction of the proportional representation system and the district constituency system had proved that UNP could win without the support of the minorities. He points out that even with President Wijetunga's pro-Sinhala line, the UNP was able to win 85 seats.

A.H.M. Cader, MP said the party should not underestimate the importance of the minorities. He said his constituency was predominantly Sinhala and he had been returned by them. Mr. Cader said the UNP had given citizenship rights to Tamils of Indian origin and the right to vote but still the CWC of S. Thondaman had gone against it. He said action should have been taken against Mr. Thondaman and the CWC members who had joined the government. He said he did not see any reason why this issue had been allowed to go on without being resolved. He said Mr. Hameed was a senior leader in the party and it would be prudent to also consider his observations.

Party Leader Ranil Wickremesinghe commenting on the various points of view that had been expressed said it was good for the party to have such debates. The exact issues have been explained by Mr. Hameed. He said a solution to the ethnic conflict must be found without affecting the unitary character of the Constitution, and it may be worth exploring the possibilities based on the Mangala Moonesinghe report. He said,that the debate should go on and the party had still not taken a final decision.

Most of the UNP MPs see the recent development as a victory for Susil Moonesinghe, MP who has made no bones about his determined opposition to the package. He has emerged as the articulator of the Sinhala opinion within the UNP. One MP told this column that people should not get huffed over Mr. Hameed's speech in his constituency because a number of others have openly expressed opposition to the package in their speeches. He emphasised that the party had still not taken a final decision on the package and the UNP was a democratic party and should be asked how there could be a clear understanding of the problem unless the problem was debated and views expressed freely. He said Mr. Hameed had been associated with every major effort to find a solution to the ethnic issue and that one should not expect him to do an about-turn now and throw his policies and principles to the winds. It is a pity, he said, that anyone who expressed a view in favour of the package was considered an enemy of the party and as an ally of the government.

Meanwhile the Select Committee is being bombarded with extreme positions taken by some Sinhala and Tamil parties. The last Select Committee meeting heard representations from a cluster of Tamil parties - the EPRLF, EPDP, TELO, and the PLOTE. Their spokesman Sri Kantha said two things were not negotiable the unit of devolution which should merge North and East and removal of Article (2) which protects the unitary character of the Constitution.

Responding to a question raised by Mr. Hameed on the future of the Muslims in the Eastern province, he said they were not prepared to accommodate a separate independent council for Muslims in the East. Mr.Choksy, MP said that as a constitutional lawyer he thought that it would be possible to amend Article (76), of the Constitution and expand the scope of devolution leaving Article (2) intact. This compromise formula of the legal luminary was dismissed by Mr. Sri Kantha. An argument broke out between Ravi Karunanayake MP, an active player in the Committee and Mr. Sri Kantha over the 13-day premier Atal Bihari Vajpayee's attitude and an agitated Mr. Karunanayake asked why the Tamil parties were so steadfast about the removal of Article 2 and whether there was no option available.

Mr. Hameed said the Mangala Moonesinghe Committee had failed on questions of the merger. It was on this issue, he said the Tamil parties refused to sign the report. Now the issue had become more complicated with the proposed change to the character of the Constitution. Committee Chairman, G.L. Peiris said the main issue was Article (2) of the Constitution and everything else was dependant on it.

Thus the debate goes on and there is no doubt that the patience and prudence of Dr. Peiris seem to have kept the Select Committee on its rails Ñ otherwise it would have been derailed many times and the proposals probably abandoned. Certainly the government could not have chosen somebody with greater imagination and depth to shoulder this intricate and intractable assignment. Minister Peiris has done a lot of talking at home and abroad to sell the package.... and now could he translate it into political reality. This is a billion rupee question.

The unitary nature of the Constitution also came up for discussion when a TULF delegation met President Chandrika Kumaratunga and Minister G. L. Peiris the previous week.

At this meeting Dr. Peiris referred to the suggestion by Mr. Choksy that Article 2 of the Constitution need not be amended if Article 76 was amended accordingly to give specific povers to the Regional Councils.

Mr. Peiris said he welcomed this suggestion and was trying to clarify whether it was Mr. Choksy's personal initiative or whether it came from the UNP.

The Minister also told the TULF to urge the UNP to agree to the devolution package.

It was in this backdrop, two Tamil MPs A. Thangathurai from the TULF and D. Siddharthan from the PLOTE had a brief discussion on the package with UNP leader, Ranil Wickremesinghe at the Parliament canteen.

The two MPs raised an issue with the UNP leader over the remarks made by former Minister Ronnie de Mel at an earlier occasion before the Select Committee that the UNP wouldn't agree to anything that would change the unitary character of the Constitution.

Mr. Wickremesinghe did not give a clear answer. He said as a leader of a party he had to handle numerous problems and this was only one of them. He said "This is the only problem you have. But I have others."

Mr. Wickremesinghe asked as to whether they believed the government, and whether the government really wanted to resolve the ethnic issue.

"It will probably lead you up the garden path", he said.

With this they thought that they should not keep any further hopes that the UNP would ever agree to a modified Article 2 in the Constitution which speaks of the unitary nature of the Constitution.

In another development three of the five-party Tamil alliance met President Chandrika Kumaratunga and Minister Peiris once again to discuss the devolution package. When the PLOTE, EPDP and the EPRLF were with the President, PLOTE MP, D. Siddharthan raised the question as to why the other two parties in the alliance (EROS and TELO) have not been invited.

The President said she invited only the parties represented in parliament for this discussion, without realising that the EPRLF is not represented in parliament anymore.

Either Douglas Devananda or D. Siddharthan could not possibly point out that EPRLF was not represented in parliament probably because they could not embarrass Suresh Premachandran of the EPRLF who was present at the meeting.

But the President herself later said that she would meet the five-party alliance inclusive of EROS and TELO again on June 27.

However, the attitude of both the government and the opposition UNP had irked the Tamil parties. Mr. Sri Kantha of the TELO was angry about the whole affair.

Amidst this political controversy, a state Commercial Bank is reported to have approved a Rs. 30 million loan for the EPDP on the directions of the President.

EPDP leader Douglas Devananda asked for this money from the government and it had been approved two weeks ago.

The EPDP has invested this money in buying a new premises at Havelock Town and at present they are in the process of fortifying the walls around the new premises.

Tamil political circles also witnessed a brief meeting between TULF leader M. Sivasithamparam and Tamil Nadu Chief Minister M. Karunanidhi. The duo however could not talk in detail about the present political situation in Sri Lanka. But Mr. Karunanidhi had apparently pledged that he would help resolve certain outstanding issues concerning Sri Lankan Tamils in Tamil Nadu.

Mr. Sivasithamparam during this meeting had congratulated the Tamil Nadu leader on his victory at the recent Indian elections.

Besides the political package to solve the ethnic crisis, political circles are whispering about a possible Cabinet re-shuffle in a week or two.

It seems that President Kumaratunga is not happy with the performance of many Cabinet Ministers.

She has indicated this to a delegation from the Working Journalists' Association when they met her for a discussion to resolve issues pertaining to journalists.

The President had emphatically told the delegation that only two or three Ministers were capable of carrying on with their work.

If all could do their work properly there wouldn't have been so many problems.

But the President was cautious not mention the names of Ministers other than that of Lakshman Jayakody, in charge of Cultural Affairs.

With these remarks political analysts are wondering whether the President would re-shuffle her Ministers.

It was known that President Kumaratunga had a longstanding dispute with Labour Minister Mahinda Rajapakse over the Workers' Charter which the President did not want included in the statute book fearing a decline in investment prospects. But the problem between the Minister and the President aggravated when the Minister tried his best to resolve the CEB problem in his capacity as the Minister of Labour. Though he earned some accolades from the general public for his untiring work, the President was reportedly not pleased with his efforts.

Some time ago there was a rumour that he could be assigned with the subject of Cultural Affairs to clip his wings.

At one Cabinet meeting when the President referred to the Minister of Cultural Affairs, Minister C. V. Gooneratne jokingly asked the President as to whether she was referring to the new Cultural Affairs Minister. The President then said she knew about only one Cultural Affairs Minister and that was Lakshman Jayakody.

Political circles have listed several other Ministers whose portfolios are likely to be changed. Among them Srimani Athulathmudali takes a prominent place, she had a continuous battle with the President over the devolution package.

The other name mentioned by people close to Temple Trees is that of A. H. M. Fowzie. But in Minister Fowzie's case lot of people argue that he is a man who could work because of the experience he had at the Colombo Municipal Council as its UNP Mayor.

Minister Dharmasiri Senanayake is the other Minister mentioned by the Colombo's influential political circles who could face the presidential axe. The Minister at present is facing difficulties in keeping Air Lanka under his wings and also there is a strong possibility that the President would take it over.

It seems that the President is unhappy over the way Air Lanka was handled and on the occasion she asked the Minister whether he could stop the extension of AirLanka's flight schedule to South Africa. AirLanka is one of the main government institutions which are to undergo reforms on PERC's recommendations and PERC is now finalising the privatisation of AirLanka.

Whatever it may be, the President is seriously considering the reshuffle of the Cabinet and some suggest that she should relieve Minister Anuruddha Ratwatte from the burden of handling Power and Energy in addition to Mahaweli, Irrigation and Defence.

In her administration the President has some faith in three or four Ministers. She mentioned this to the journalists who met her early last week. But now it appears that the Mulberry Group has won her confidence, won the day although she had reprimanded its members for having got involved in the CEB crisis.

The President on Wednesday night acted promptly on a report submitted to her by some parliamentarians (Mulberries) who had been appointed to probe alleged malpractices of the CWE.

The President acting on the report directed Minister Wickramaratne to remove the Chairman of the CWE, Dr. Dharmasena Herath and ordered that charge sheets be served on 15 other senior officials of the CWE. The Mulberry group which wants to probe matters in other Ministries is hot in the trail of Ministry of Housing and Public Utilities. But Minister Nimal Siripala de Silva is taking a hard line and sees no reason to allow the Mulberry group to carry out their investigations.

Apart from this, another problem facing the President is the attitude of the LSSP. The President expressed her intentions when she met the PA's General Secretary D. M. Jayaratne and SLFP General Secretary Dharmasiri Senanayake. Mr. Senanayake is scheduled to meet the LSSP top rung to work out a formula where they all could work together within the PA frame work.

Though the President has indicated her displeasure with the LSSP, some LSSPers other than Batty Weerakoon and Vasudeva Nanayakkara think that they should hang on in the government and fight from within. However this concept is yet to go before the LSSP hierarchy to determine what action they would take if the LSSP is ousted from the PA.

At present, it is obvious that even the Communist Party of Sri Lanka would oppose such a move but LSSP would be told to toe the line with the government in important and crucial issues without embarrassing it.

Another matter that is being considered is to restrict the state of Emergency to the North East and other vulnerable areas which would come under LTTE threat such as Colombo to avoid LSSP abstaining from voting on the extension of emergency countrywide.

However, it appears that with all these controversies, LSSP leader Bernard Soysa wants to remain in the government. When some Tamil MPs told Minister Soysa in parliament that they also would join hands with the LSSP if the LSSP voted against the extension of emergency, Mr. Soysa is reported to have told them not to put him in further trouble.

Though there are moves from both sides to settle matters, the LSSP politburo has taken a tough stand to oppose the extension of emergency thus making things difficult for the PA. In the circumstances it is likely the dispute would drag on for sometime before it reaches Hulftsdorp for a judicial determination on the agreement between the parties affiliated to the People's Alliance. Another controversy booming over the People's Alliance is its decision to issue a Letter of Intent to Barclay Mowlem of Australia to build and operate a coal fired power plant in Trincomalee.

Opposition leader Ranil Wickremesinghe raised this issue in parliament.

The controversy is that the government has decided to award the tender to the Baclay Mowlem without calling for tenders, according to the accepted procedures.

The need to increase the capacity to generate power to meet the ever increasing demand for power was realised by the Cabinet sub-Committee on Economic Affairs which functioned under the then Prime Minister D. B. Wijetunga as early as January, 1992.

A Committee consisting of Ackiel Mohamed, Secretary/Power and Energy, A. S. Jayawardena, Secretary/Ministry of Industries and Scientific Affairs and Dr. V. Ambalavanar, Director General/Plan Implementation was requested by the Cabinet Sub-Committee to study the demand for power and to submit a report to the Cabinet sub-committee.

The Committee presented its report after discussing with the officers of the CEB Planning Division. The report envisaged a growth of about 8.10 percent in power demand.

Ranil Wickremesinghe, then Minister of Industries and Scientific Affairs was very sceptical of this forecast and suggested that given the trends at that period, it should envisage a growth around 12 percent a year.

The discussion then moved as to how to increase the capacity. It was revealed that the hydro- electricity capacity of the country has been virtually exhausted and that the CEB should now increase its thermal generation capacity. In this context, it was revealed that seeking foreign aid to achieve the required thermal capacity will be a long process and the committee requested the CEB to look into the prospect of setting up private power plants on BOO/BOT basis similar to those being implemented in the Philippines and Malaysia.

It should be noted as this was in early 1992 and there was no institutional set up to promote private sector participation in power generation. Such an institution SIDI was set up only in 1992.

Hence on March 13, 1992 the CEB placed an advertisement in the Daily News seeking expressions of interests from the private sector for participation in the development of the power sector in Sri Lanka.

The advertisement stated that "All expressions of interest in respect of the above should be sent to the Additional General Manager, (Projects) of the Ceylon Electricity Board, on or before June 10, 1992."

A special task force was appointed to go into those expressions of interest and the CEB was instructed to hand over the proposals received in response to its advertisement of March 13, 1992 to the task force. The CEB Chairman, by his letter of June 1992 had directed the AGM (Projects) to do so.

The task force which was co-ordinated by the Ministry of Policy Planning and Implementation gave instructions to the AGM (Projects) of the CEB to go through the so and so expressions of interests, differentiate them according to the different types of plants offered by them and request these companies to send detail proposals.

The AGM (Projects) by his letter dated September 12, 1992 has informed the Secretary, Policy Planning and Implementation the firms which have been requested to submit detailed proposals.

1. Coal-Fired Power Station Project at Trincomalee.

a. Mihaly International Canada Ltd.

b. M/s Anglo-Japanese Australian Consortium.

c. R. P. G. Enterprises, India.

2. Proposals for 40 MW Gas Turbines - Combined Cycle Plants at K. P. S. Power Station, Grandpass.

d. M/s. Kraftwerks - Und Anlagenbau Ag. Germany.

e. M/s Hazama Corporation, Colombo 4.

3. Proposals for 40 MW Diesel Plants Operating on "Heavy Fuel" at Fertilizer Urea Plant Complex at Sapugaskanda.

f. M/s. Alsthom International, Colombo 3.

g. M/s K. H. D. Great Britain, UK.

h. M/s Pedrison Ltd., Colombo 7.

i. M/s Gilmore International Ltd. Manoco.

The Committee decided to request the firms listed above to submit detailed proposals by December, 1992.

As far as the coal fired power project is concerned, the UNP awarded the tender to Mihaly International as it was the only company which submitted a proposal. But the PA government cancelled the LOI awarded to Mihaly International and started negotiations with Barclay Mowlem which submitted its proposals long after the specified period of time.

In short, the government after cancelling the LOI awarded to Mihaly International has decided to award an LOI to Barclay Mowlem without calling for fresh tenders.

A letter sent by BOI chief Tilan Wijesinghe to the Executive - Special Projects of the Barclay Mowlem, Phillip Canham says:

"During a discussion held between H. E. the President and officials of the Ceylon Electricity Board, Ministry of Irrigation, Power & Energy and BOI on 02nd February 1996, it was decided to:

1. revoke a previous Cabinet decision to call for new proposals for setting up a coal fired power plant on a BOO/BOT basis.

2. commence negotiations with Barclay Mowlem.

3. finalise preliminary negotiations towards issuing a letter of intent to Barclay Mowlem within 30 days of the government of Sri Lanka identifying a suitable site to locate the coal fired power plant."

Opposition leader Ranil Wickremesinghe speaking on the matter said the procedure followed by the government was wrong and called upon the government to tell the country as to why transparent procedures were disregarded when awarding the tender to set up the coal fired power plant to Barclay Mowlem.

Mr. Wickremesinghe has taken objections to a letter sent by Tilan Wijesinghe dated 22nd November 95 where he has stated the proposal to build a coal fired power station by Barclay Mowlem was a solicited proposal.

Mr. Wickremesinghe told parliament that only a proposal obtained by following the normal tender procedure laid down by the government was a solicited proposal.

Hence, he argues that the proposal put forward by Barclay Mowlem was not a solicited proposal.

The UNP is also taking on the government on the rising milk food prices. A massive demonstration was held in Kaduwela last week to protest against the rising milk food prices with a counter demonstration held by the government. The government in the meantime also explored ways and means as to how it could bring down the prices of milk food.

Minister Kingsley Wickramaratne last week invited big milk food importers and producers in Sri Lanka to parliament to participate in a ministry's consultative committee meeting.

At this meeting, a leading milk powder exporter from New Zealand, New Zealand Dairy Products agreed to pass on the benefit of the reduction of duty straight down to the consumer provided that the government gives a duty rebate on the milk powder stocks already arrived.

Most of the milk powder importers agreed with the suggestion, but when the Minister turned to Nestles, its Corporate Director Kasi Wijetunge said they were depending heavily on local milk producers and such a move would have a very bad effect on the local milk producers. Lanka Milk Foods represented by the CWE also held the same view.

In contrast to this, representatives of the Milk Farmers' Association requested the government to increase the present duty on Milk Food by another 10 percent.

They pointed out that the government is earning a revenue of Rs. 640 million a year by imposing duty at 10% at present and requested that this could be diverted to the development of the local milk industry.

Minister S. Thondaman who was also present along with Minister Lakshman Jayakody, said he was all out to protect the local milk farmer, and said on his recommendation the government agreed to increase the price paid to the milk farmer by Rs. 6 a litre but still they have received only a Rs. 2 increase.

UNP's Dr. Jayalath Jayawardena told the Minister to show the government's sincerity by fully implementing the government's decision to pay more to the milk farmer.

Minister Jayakody at this stage accused Dr. Jayawardena of trying to play politics and this caused an argument between the Minister and Dr. Jayawardena.

However, the discussion ended without taking a concrete decision as to what the government should do to bring the milk food prices down.

It is now clear with the unfolding events the government cannot sit back and relax anymore, putting the blame on the North-East war and the previous administration. It is now time for it to get to its jobs done quickly and to work towards achieving the targets it set in its manifesto if it is to avert a bigger explosion - the wrath of the people.

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