Articals of interest to the coal industry.

Saturday, June 23, 2007

Failure to set up Coal Power Plants in time as planned by the experts also caused severe damage to the economy of the country.

Failure to set up Coal Power Plants in time as planned by the experts also caused severe damage to the economy of the country.

Could this happen here? YOU BET.

The Sunday Times / On line
Financial Times

Major reasons for Lanka’s debacle
(Joint press release issued by the Chairman of the Joint Business Forum (JBIZ), Nimal Perera)
Until the late 1950s Sri Lanka had been an economically sound, self-sufficient country in Asia. Having fought together to gain independence, every community lived in harmony until the new language policy was introduced. It was a known fact that our country was looked at as a model by countries like Singapore to develop theirs in that era. Further to that our country was proud to have had one of the best-managed Railway systems and also the Public Service in the world. We did not have an Executive President, a large Cabinet and Provincial Councils at that time. The country was well governed by the House of Representatives comprised of high caliber personalities headed by the Prime minister. They were well supported by equally efficient and well-respected Government Agents. They never meddled with the law of the country. It looks like that the changes done subsequently to the Administrative and Legislative Structures and constitution had not been beneficial to the country. The situation now is in a highly deteriorated state in every aspect. We give below the Per Capita Income of two Asian countries and Sri Lanka for 1960 and 2006 just to indicate at what pace our country has moved.
What has gone wrong? Many accept that the war, high cost power generation, the language policy, preferential voting system, corruption and waste and deterioration of the law and order situation have caused the downfall of our country.
What has gone wrong? Many accept that the war, high cost power generation, the language policy, preferential voting system, corruption and waste and deterioration of the law and order situation have caused the downfall of our country.
WarThe 24-year-old war has done the biggest damage to the country both socially and economically. Every leader in power has vowed that terrorism would be crushed militarily. Military assistance from India was also obtained and now 24 years have gone by, more than 50,000 people have lost their lives, more than 100,000 people have got disabled, more than 500 billion rupees have gone down the drain and billions worth of properties have got destroyed. These still continue and our lives have become more and more miserable and uncertain. Although the leaders were always in favour of a negotiated settlement, they always succumb to the terrorist’s tactics of provocation. The war situation has also created room for the deserters and arms and ammunitions to move freely through out the country resulting in escalation of violence and crime. The sufferings the citizens have to go through, the battering the economy get, the destruction of property and moreover the loss of human lives should come to an end immediately if the country is to prosper. Budget approval for defense expenditure for the year 2007 was Rs 100 billion where as in a no war situation it should have been around Rs 30 billion. If the peace prevails, the country could easily save at least Rs 70 billion annually. This would enable the government to reduce the excessive taxes and other levies and thereby lower the COL. Had the billions of rupees spent on war utilized for the development process, by now the country would have had many new highways, many flyovers in major cities, many power plants and an highly improved transport system making the life of the people comfortable.
Expensive power generation Failure to set up Coal Power Plants in time as planned by the experts also caused severe damage to the economy of the country. Ironically our decision makers went for the most expensive method of power generating using expensive fuel when other developed and affluent countries resort to low cost methods. As a result of high cost of power many industrial ventures struggled to survive and some collapsed as they became uncompetitive. This has also become a big burden to the country’s economy as the country's biggest expenditure is for purchase of fuel which is being used mainly for power generation. Last year alone the country has spent Rs 220 billion to import petroleum products out of which around 70% totalling Rs 154 billion have been for power generation. Had the proposed coal power plants been set up in time as per the plans, the country could have easily saved more than Rs 100 billion spent on fuel annually. These wasted funds during past many years could have been utilized to reduce the burden on the economy. It is commendable that the government has already made arrangements to commence the Norochcholai Coal Power Plant and Kotmale hydro power project. What is important now is to fast track these projects and to take immediate action to set up the other plants in the locations already earmarked in Trincomalee and Hambanthota.
Language Policy It is a known fact that India is fast growing because of the IT and BPO Industry. With the growth of the IT Industry many cities like Chennai and Bangalore also developed. The secret behind the success of this industry is the high standard of English. After gaining independence the Indian leaders, continued to maintain the English standards without compromising the international medium of expression for pseudo nationalism. English is also an official language there. The level of English standard and English pronunciation in our country was of a much higher standard than our neighboring countries. In the good old days even a lower level employee in a government organization could converse in English. But leaders of our country for short term political gain neglected the English education and introduced a new language policy in late 50s. Poor rural youth suffered from this new policy as they were deprived of the English education making them unemployable mainly in the private sector. This compelled them to seek employment in the state sector using political influence and this was one of the reasons why state institutions are over staffed, politicized and have become less productive and unviable.
Preferential voting systemAnother major reason for the debacle of the country is the present preferential voting system. This system is not benefiting the country or its people. This system has paved the way for many unsuitable candidates to come into the parliament. They have lowered the status of the Parliament from a standard of a supreme, sacred place to the standard of a fish market. This electoral system has only increased the government expenditure (225 MPs for about 140 electorates). They interfere with the law and order enforcement in the country, functions of the Police and other government institutions and protect the criminals thus increasing the crime rate and corruption. These unprincipalled politicians prevent high calibre people in the public sector to perform impartially. They are the main root cause for deterioration of the discipline in the country, collapse of the important government institutions and downturn of the economy. They are also responsible for the destruction of the environment such as cutting down the forests, filling up of marshy lands, etc.
Dishonest and incapable politicians who get rejected from the electorate for not serving the people could still get into the parliament with this preferential voting system. Our country could afford only a lean parliament and a lean cabinet. If this happens many issues will get solved considerably.
Another white elephant in the present system is the Provincial Councils. It duplicates many functions, incurs heavy expenditure and has become a burden to the country’s economy. Income generated by provincial councils in 2006 was Rs 19.5 billion and the expenditure was estimated to be Rs 94.5 billion! It would be more beneficial to the country if the state of District Secretary (Government Agent) level is strengthened by way of giving them more authority, sending them for management training and provide better remuneration.
Corruption and wasteEveryday there are allegations by the citizens and the COPE report reveals many instances of corruptions within political circles from local authority level upwards and also in many state institutions. This is also a major reason for the downturn in the economy as the amounts involved are estimated to be large enough to make a huge adverse impact. Further substantial amounts of funds are getting wasted as the inefficient politicians are not very much concerned about the public funds. The amounts wasted on abandoned partially built roadways (such as Airport expressway), government buildings, abandoned CTB buses, railway compartments and other vehicles in government organizations including in ministries are colossal and values once again should be in billions of rupees. Sadly none is responsible. The general practice (of ruling party politicians) is to always blame the previous regime for the deficits but those in power continuous with the same mistakes.
Law and order situationThe law and order situation of the country has hit the rock bottom with the escalation of abductions, brutal killings and extortions and the irony is that most of these are happening in highly secured city. When many vehicles are being stopped two three times at the security check points, its baffling how the abductors are always getting away. The Police Department has become highly ineffective due to politicization. These are the end results of preferential voting system and the protracted war in the country.
LeadershipThe leader of a country should be brave enough to take correct decisions and bring about the necessary changes and may call for a referendum if necessary, in order to put the country on the right track. Short term he may become unpopular mainly within political circles but in the longer term he would be worshipped by the masses. It is high time that all stakeholders look hard at the current situation and unite to urge the leadership to take corrective measures. We also should urge the leaders of the political parties to select respectable people from the electorates who are educated and capable enough to govern a country. There are many capable personalities within the country who are willing to assist and facilitate in finding solutions to country’s woes if they are called upon to do so like in South Africa and Ireland.

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