Post UN Power Pains: Dudley Rice Power & Fortress Gas Power

By Rajan Philips –OCTOBER 3, 2021

Rajan Philips

President Gotabaya Rajapaksa was out of the country for only less than a few weeks, to attend the 76th UN session in New York, reportedly among other house keeping matters as a former US citizen. But many things have gotten worse by the time he got back home, namely, Sri Lanka that is now entirely in his executive charge. The only redeeming change for the country, touch wood, has been the declining numbers of Covid-19 infections and deaths. Not by a whole lot, but enough for a national breather. Everything else has either got stagnant bad or gone worse.

Two developments are sticking out sore. The first is the cartel power of Polonnaruwa rice millers over the governmental power of the Medamulla brothers. The second is the corporate power of an American energy company that has unilaterally announced a sole-sourced deal with the government of Sri Lanka for supplying a seemingly endless flow of liquefied natural gas at potentially higher than market prices.

Dudley Rice Power

You might call the new rice power, the Dudley Rice Power. Not after the late lamented Prime Minister Dudley Senanayake who invested virtually all his political capital in growing rice to feed his country. The new power belongs to a different Dudley, Dudley Sirisena, brother of Maithripala Sirisena aka former President Sirisena. The Sirisena family in Polonnaruwa are perhaps the biggest family beneficiaries of the agricultural colonisation scheme of the once politically mighty Senanayake family. That scheme, for all its many faults, contributed to growing more rice to feed the country’s growing population. DS and Dudley Senanayake did not use it to earn a cent for themselves.

Not so with the Sirisenas, at least its Dudley member. They literally made it from rags to riches, politically and otherwise. There is nothing wrong with going from rags to riches, so long as it is done the ‘proper way.’ “Who determines the proper way?” – GG Ponnambalam once asked Philip Gunawardena, in parliament, when the latter was Minister of Food and Agriculture in the first Bandaranaike government. “The people,” growled the father of Marxism in Sri Lanka in response to its most famously “unrepentant opponent.”

To cut to the chase, for now, the people determine nothing in today’s Sri Lanka. Everything is decided for them. And Dudley Sirisena is writing a new a power inequality to Sri Lanka’s lopsided power relationship. The new Dudley Sirisena power stems not from growing rice but from hoarding it. From everything one hears, the new Dudley is the king of Sri Lanka’s rice milling cartels who are now announcing retail rice prices overriding the government’s gazetted maximum retail prices. For the hapless but not at all harmless Rajapaksa government, it might be easier to get rice even from the moon than to ‘price’ it out of the miller mafia.

Not that it matters anything to this government because it precipitated the current food crisis by peremptorily ordering an overnight switch from the inorganic to the organic. No such order to switch from tractors to ploughs as well, for that would have meant banning cars and pushing ministers back to their push-bicycles that they used to ride before getting into politics. Cynicism apart, the politics of this rice inequality may turn out to be more consequential than it now appears, but I will leave speculations for another time. Now to gas power and the external dimension to the new power inequality.

Fortress Gas Power

The American company now wielding corporate power in Sri Lanka is New Fortress Energy, a liquefied natural gas (LNG) company founded in 2014 with the salutary mission of achieving universal access to clean energy. But there is nothing salutary about striking sole-sourced contracts, in small countries, and by-passing tenders. The company’s foray into Sri Lanka apparently began through an MOU with a Sri Lankan company called Lakdhanavi Limited. The two joined together to “develop a 350 MW gas-fired power plant in the Kerawalapitiya Power Complex.”

That partnership became the steppingstone for “the signing of a Framework Agreement with the Government of Sri Lanka to build an offshore liquefied natural gas (LNG) receiving, storage and regasification terminal located off the coast of Colombo, and rights to supply gas to the existing 300 MW Yugadanavi power plant” at Kerawalapitiya. The deal which is yet to be announced formally by the government has already attracted criticism and scrutiny.

The CEB Engineers’ Union has come out strongly against the deal that is estimated to be worth up to USD 6.0 billion and will leave Sri Lanka dependent virtually permanently on a sole LNG supplier. The government is playing coy and is in a state of non-denial denial. The principal mover and shaker behind the deal is said to be Basil Rajapaksa who famously flew back over the ocean from the US to become Sri Lanka’s Finance Minister. And not a hum of protest from the ‘leftists’ in the government or the patriots on the sidelines over new LNG deal.

Earlier they had raised heckles and scuppered the far smaller and more secure MCC agreement directly with the US government. The port unions and patriots also sank the agreement for India’s lead in the development of the East Container Terminal at the Colombo harbour. Now the government with hardly any whimper of protest has reached agreement with India’s highly connected Adani Group to build a brand-new West Terminal in partnership with John Keells, and the government-owned Port Authority as a minority partner. The deal apparently will counterbalance Chinese contracts for Port development.

Before all of this, the Rajapaksa government unilaterally terminated a serious and well developed agreement with the Japanese to build LRT infrastructure in Colombo. Now there is news that Koreans are coming, God knows at whose behest, to start from where the Japanese were not even allowed to begin. This is the ‘methodical’ record of the Administration of President Rajapaksa in tender matters.

Read More