Political versus commercial decisions
View(s):Are we entering dangerous ground by having two super-powers – India and China — controlling two vital installations in one city?
Some people think so, including Kussi Amma Sera while others sweep aside any danger of a ‘fuse’ blowing between the two in Hambantota.
“Indiawa saha Cheene, eka thenaka innakota, apita prasnayak wey-ida? (Will there be a problem when India and China are in one place),” asked KAS from her down-the-road neighbour Mabel Rastiyadu.
“Hambantota Cheene-ta, Yapanaya Indiawa-ta, Tirikunamale Singappuruwata. Hondai, Hondai, (Hambantota to China, Jaffna to India, Trincomalee to Singapore…great!” laughed Mabel, chatting under the margosa tree within earshot distance from my office room. Their good-natured banter could be heard clearly.
The crux of the conversation was last week’s news that the Government plans to invite India to run the Mattala International Airport, hot on the heels of the Hambantota port being given to the Chinese in a debt-for-equity swap.
Adding to this week’s news were reports that the Government is planning a third international airport at Hingurakgoda, home base of President Maithripala Sirisena.
Another international airport after the struggle to maintain Mattala Airport? Another foolhardy proposal?
Pondering on this and the margosa tree-conversation, the silence is broken by the telephone ringing. It is Kalabala Silva, the often-agitated academic, on the line.
“I say….….why are they trying to build another airport when we are struggling to maintain one and forced to sell the second one?” Kalabala asks.
“Well maybe they have got wiser after Mattala and may now be thinking of getting an investor on a Build, Operate, Transfer (BOT) arrangement,” I reply.
“But shouldn’t we first settle our debts – SriLankan Airlines, CEB, CPC, Railways, Transport Board, etc – before getting into debt again?” he poses the question, adding: “Furthermore, having India and China controlling two vital installations in one city…….would that not create problems with both countries seeking to control this region? Would we be drawn subconsciously into a battleground for supremacy?”
“Very unlikely,” I said, but my meek response was not too convincing to him. Kalabala muttered that both companies about to control the airport and seaport are state companies and controlled by political powers rather than commercial interests.
Cutting short the conversation with a “let’s talk later as I have a deadline to meet”, I call an aviation veteran in Sri Lanka who is widely respected for his views on the aviation industry. He too is surprised by the decision to build a third international airport.
“Mattala itself is a disaster because there are no proper facilities, no proper infrastructure and no engineers to handle any emergency,” he said, adding that a feasibility study should be done before deciding on the viability of a third airport.
Consider the cost: Mattala airport was built and opened in 2013 at a cost of over US$200 million (around Rs. 27 billion at the then exchange rates), while Hambantota port was built at a cost (phase 1) of $361 million (over Rs. 45 billion). A third airport with proper infrastructure will cost a fortune, at least $100-200 million (around Rs. 30 billion) at current costs.
Is that wise? Can we afford it? Wouldn’t it be wiser to upgrade the regional airports and have an efficient shuttle-service from Katunayake to Trincomalee or Hambantota to Trincomalee and vice versa to cut down on internal, time-consuming road travel, particularly for tourists and VIP passengers?
Hambantota was seen as an attractive proposition or port call for hundreds of ships that ply this route to Singapore and Europe. But if that was the case, why has the port failed to live up to this ‘need’ under Sri Lanka’s care?
Is it mismanagement, poor marketing or what? In the case of the Mattala airport, most people agree that the airport was not internationally, marketed properly. The fact that Sri Lanka has been able to attract the Indians imply they see some value in the airport (or are there political reasons), while under Sri Lanka’s care it was like a ghost airport dubbed by the international media as the “loneliest airport in the world”.
The phone rings again. It’s Seeni Bola, my banker friend (so named by colleagues after he once boasted that other banks were handling ‘seeni bola’ deposits compared to his bank).
“Machan, what is going on? Why are they building a third airport,” he asked, in an exasperated tone. “Maybe they believe more people might come to Trincomalee than Hambantota,” I said.
“The problem is that these are political decisions being made instead of commercial ones. If you look at a project with a commercial objective, then it has to work, otherwise you won’t undertake to do it. But when it is a political decision, it’s immaterial whether it works or not,” he said also alluding to the case of the Indian IOC getting the Trincomalee oil tanks in 2003.
“What has happened to these tanks? No development. The same will happen to all projects with a political motive,” he added. “Hmmm,” I reply in agreement.
One of the problems of today’s governance is that the Government seems to be resorting to knee-jerk decisions without any proper rational thought. For example, the decision to enforce the death penalty has already triggered a response from the European Union which is threatening to pullout GSP+ concessions. Sri Lanka was struggling to restore GSP+ and when it happened, the powers-that-be were gung ho. Now we are likely to give it up on a platter.
Shouldn’t someone have advised the President on the repercussions of such a move? Or are we ready to give up these concessions for the greater good of putting to death those who commit violent crimes and sale of drugs?
No one denies that violence is on the rise and criminals are also directing ‘operations’ from inside prison cells. But shouldn’t the rule of law be enforced firmly without political interference rather than resort to an antiquated form of punishment which Sri Lanka itself appealed against in the case of Sri Lankan domestic Rizana Nafeek who was subsequently executed in Saudi Arabia?
The GSP+ concessions were won after a long-drawn battle and in this context a decision like the death penalty should have first been examined by a Government-appointed committee on different ways of deterring crime including stiffer penalties and better law enforcement.
At a news conference this week, State Minister of Finance Eran Wickramaratne asserted that the Mattala airport will be run on a commercial basis by the new joint venture with India.
Having burnt our fingers in many political and not commercial decisions, let’s hope that both Mattala and Hingurakgoda are based on commercial interests. Otherwise, Sri Lankans will be coughing up more debt payments for generations to come.