Privatization Phobia

President Ranil Wickremesinghe in his recent special statement to the nation said that there are currently 430 public enterprises operating in 33 sectors of the economy. These enterprises employ 6% of the Sri Lankan population. However, many of these enterprises have garnered monopolistic positions in the market, hindering private investment. Price fixing, inefficient management, and poor entrepreneurship have weakened public finances, turning these institutions into national burdens that are dependent on the taxpayer.

We will not allow anyone to drag our Motherland back to where we were a year ago. Today, some individuals seem to have forgotten the hardships endured by Sri Lankans during that time. Our economy contracted by 8.7%, our foreign exchange reserves hit rock bottom, and we experienced one of the highest inflation rates in the world. Foreign loans went unpaid, pushing the country into bankruptcy. Food scarcity became a pressing issue, with people waiting in queues for days to obtain oil and gas. Agriculture suffered due to a lack of fertilizer, resulting in crop losses and helpless farmers. Businesses collapsed, leading to job losses and income sources drying up. Hospitals faced shortages of medication, schools had to close, and power cuts lasting 10-12 hours became commonplace. The country was in disarray, with people struggling to survive, President Ranil Wickremesinghe also said.

Privatization is the need of the hour and no bogus fears should be entertained about it, as someone, seeming to be knowledgeable, coming over a certain vociferous TV channel, recently, said, that if only the mineral sand deposits containing heavy minerals such as ilmenite, monazite, zircon, rutile etc. in the Trincomalee District are put to good use the funds generated will be sufficient to meet 46% of the requirements of the country’s annual budget.

This only validates the claim that the country is moving at snails’ pace for the last 75 years vis-à-vis the building of a production economy.

The Mineral Sands Corporation now going under the title and description of Lanka Mineral Sands Limited Fully Government Owned Company has been there for donkeys’ years under various Governments, political leaders, ministers, scientists and chairmen. One wonders whether they had been ‘scraping coconut’ all these years!

Today, the Sri Lanka Railways trade unions are up in arms against a proposal to make it an Authority while also saying that the Yahapalanaya Government imported 160 unsuitable power-set compartments and engines to pull them, pointing to the corruption, coming down from the last days of the Ceylon Government Railway.

It is said that Chief Mechanical Engineer and General Manager of Railways B. D. Rampala had wondered whether the ship had touched the wrong port when it was unloading the Montreal Locomotive Works made M4 Class diesel electric locomotives as they were too heavy for the local tracks.

There are also doubts that the same mistake has been repeated because of the Banaras Locomotive Woks made M11 Class diesel electric locomotive sinking along with the tracks at Maradana the locomotive, into the bargain, being too long for local conditions.

What takes the cake is the sordid M9 Class Alstom computerized diesel electric locomotive deal under presidential intervention and professorial sanction that sent home a Ceylon Civil Service gem and has caught the public eagle eye never ever to be forgotten. Out of the 10 engines only two are running today with the spares of the other eight because of the prohibitive cost of spare parts.

Such transactions were never there under President Ranil Wickremesinghe for if so our ‘Candide’ Voltaire Victor Ivan would surely have written a book about his activities from 2001 to 2004 sandwiched amidst an era about which he wrote a queenly piece.

The history of State Owned Enterprises that have become white elephants, today, had their beginnings in the mid-nineteenth Century. However, the first such State Owned Enterprise, the Ceylon Government Railway that came into existence under fortuitous circumstances was not loss making.

“In 1855 Governor Henry Ward considered the establishment of a railway an absolute and imperative necessity and the Legislative Council unanimously agreed to the proposal that the Government of Ceylon should guarantee the 6 per cent interest on a loan of Sterling Pounds 80,000.

“Acting in accordance with British ideas of Government and policy at the time, the Secretary of State refused to permit the Ceylon Government to construct the line, and private companies refused to undertake the work without this security.

“In 1856 a provisional contract was signed and ratified by the Legislative Council, after much opposition from the unofficial members who thought that it gave room to the Company to increase its rates. So another survey was made in 1857 and the total cost was estimated at Sterling Pounds 856,557.

“The construction of the railway was begun in 1858, but the work had to be interrupted after three years. After the work had been carried on for about a year, the Company completed a survey of its own, and announced that the railway would cost not Sterling Pounds 856,557 but Sterling Pounds 2,214,000.

“The result was that the Secretary of State, the Government and the Company were bitterly attacked, and in spite of Ward’s desire to continue the work, the Legislative Council in 1860 insisted on his annulling the contract.

“The Ceylon Government then undertook the construction of the railway and unlike in India and in England, the railway in Ceylon became a Government concern. Work was resumed in 1863. In 1865 the railway reached Ambepussa, and the line to Kandy was completed in 1867.

“From the beginning the railway was a paying concern. Its receipts went up in 1891 and continued to rise both on account of goods and passenger traffic. In 1894 they rose to Rs. 5,572,054 and in 1903 to about Rs. 8,000,000 or 28 per cent more than in 1895. The profit from 1862 to 1902 amounted to Rs. 33,000,000,” says Professor G.C. Mendis in his work ‘Ceylon Under The British’.

The Ceylon Government Railway was running well even some time after the British left explanation being called for from the locomotive drivers even when a train was running late by two minutes and even under legendary General Manager B. D. Rampala.

The Indian Railways that has been a private concern from the beginning is called ‘the Efficient Indian Railways’ but the Ceylon Government Railway now called Sri Lanka Railways has been making huge losses for the last several decades and has been a liability to the country apart from being inefficient.

There was no crony capitalism under the United National Party Governments of D.S. Senanayake, Dudley Senanayake, Sir John Kotelawala and J.R. Jayewardene not to mention the Mahajana Eksath Peramuna Government of S.W.R.D. Bandaranaike, the cronies being favoured by giving huge loans from State banks which some paid back but many others’ ones having to be written off.

Some such cronies depleted the country’s forest cover so mercilessly to such an extent causing today’s human-elephant conflict; it was said that when they moved about in cars in forested areas the trees shivered!

Kantale Rice Mill the largest in Asia which even J. R. Jayewardene, the so-called Mahanayake of Capitalism did not touch, was closed down after him to favour cronies, trees overgrowing to more than its height!

Tennyson Edirisuriya a descendent of the clan of Charlie Edirisuriya the Unicorn of Ruhuna, was appointed Chairman, Paddy Marketing Board in 1994 and had been asked by the Minister of Agriculture to give rice milling contacts to some cronies of his which he refused to do and resigned issuing a full page newspaper statement saying, among other things, that he is resigning because there is a buffalo in the Cabinet!

The 2004 Tsunami snuffed his life in his prime because as they say the Good Die.

Crony capitalism and loss making State Owned Enterprise monopoly are the bane of the economy. A few loss making State entities ate up “1.6% of the country’s GDP in 2021” their employees enjoying a good life while the down trodden suffered in famine conditions; so, no one in his senses can oppose privatizing such wasteful destroyers of the people’s wealth which they pay through their noses by way of indirect taxes while direct taxpayers of the racketeer crony capitalist class are often art tax dodgers.