SPECIAL REPORT : Part 474
Having strongly opposed the privatization of Sri Lanka Telecom, the Sectoral Committee on National Security made the following recommendations:
(a) SLT is already partially privatised with international companies holding 44.98% of the stake and the government holding 49.5%. Further privatisation would expose the country’s critical communication infrastructure/sensitive information to private entities whose profit-oriented interests can compromise national security. Hence privatisation of Telecom is not recommended.
(b) Anyone/organisation who had been blacklisted/helped terrorists/extremists in any form should not be allowed to buy any share and have any control over our national assets.
(c) State can buy back the other large shareholder of Telecom as provided for in the agreement, divide the segments into sensitive and vulnerable, excess lands and buildings, critical infrastructure and the business. Whilst retaining the first segments affecting National Security, the state can divest the others holding a major share through Private Public Partnership ensuring critical infrastructure is protected and all government regulations are adhered to. This way the government can exit from doing business whilst making profit and ensuring National Security.
Sri Lanka Telecom shares fell 7.8 percent on Friday (09 June) during trades following the release of the SOC report.
By Shamindra Ferdinando
There hadn’t been a previous instance of a President having to publicly challenge a report put out by a Sectoral Oversight Committee or any other watchdog committee.
Several hours after the Sectoral Oversight Committee (SOC) on National Security tabled a report on ‘The effects of the privatization of Sri Lanka Telecom on National Security’ in Parliament on Friday (09) the President’s Media Division (PMD) countered the controversial assessment.
The 11-member SOC, led by one-time Navy Chief of Staff Rear Admiral Sarath Weerasekera, included war-winning Army Commander the then Lt. Gen. Sarath Fonseka, MP. The SOC comprised Sarath Weerasekara (SLPP), Chamal Rajapaksa (SLPP), Chandima Weerakkody (SLPP), Field Marshal Sarath Fonseka (SJB), (Prof.) Channa Jayasumana (SLPP rebel group), Charles Nirmalanathan (Illankai Thamil Arasu Kadchi), Sampath Athukorala (SLPP), U.K. Sumith Udukumbura (SLPP), (Dr.) Major Pradeep Undugoda (SLPP), Major Sudarshana Denipitiya (SLPP) and Nimal Piyathissa (JNP)
Illankai Thamil Arasu Kadchi is the leading party in the TNA, one-time ally of the Liberation Tigers of Tamil Eelam (LTTE). The UNP and JVP with just one and three members in Parliament, respectively, are not represented in this particular SOC.
The controversial SOC report, though some asserted caught President Ranil Wickremesinghe by surprise, the writer firmly believes the the Wickremesinghe-Rajapaksa government knew what was coming. It would be pertinent to ask whether all members of this particular SOC fully read the report available in Sinhala, Tamil and English before the former Public Security Minister tabled it.
The then CBK administration partly privatized the SLT in 1994. Nippon Telegraph & Telephone Corporation of Japan secured 35% of the SLT but those shares were bought by a Netherlands-based company, called Global Telecommunications Holdings, a wholly owned subsidiary of Malaysian Usaha Tegas Sdn Bhd. As of today the Malaysian Company holds 44.98% of the stake and the Government holds 49.50%.
President Ranil Wickremesinghe wants to divest the remaining shares in line with his disputed strategy that the government quit business altogether. With a countrywide customer base of nine million, the income revenue of SLT in 2022 was Rs. 108 billion and the profit was Rs. 8.46 billion.
Acknowledging the SOC’s unprecedented warning over national security threat posed by total privatization of SLT and the factual content of the report, the PMD issued the following statement: “…the Government believes that it lacked a logical or scientific data analysis pertaining to the subject matter. To address this deficiency, it is necessary to examine the operation and regulation of information and communication technology service providers in Sri Lanka, analyze financial data related to the sector, understand Sri Lanka’s national ambitions in this field, assess the available capital capacity, and conduct a comprehensive study of global trends.
Furthermore, the Government has reassured that the policy decision taken will not compromise national security, contrary to what is indicated in the report.
Hence, the Government will take a final decision during an upcoming Cabinet meeting, considering this report along with recommendations from the information and communication sector.
Additionally, the President emphasizes that the current government’s policy is focused on providing opportunities to the private sector, distancing it from direct government involvement in business.”
Politics of privatization
MP Sarath Weerasekera received the leadership of the SOC on 08 March , this year. One-time Speaker Chamal Rajapaksa proposed Weerasekera while U. K. Sumith Udukumbura, also of the SLPP, seconded the naval veteran.
Having retired in 2006, Rear Admiral Weerasekera successfully contested the Digamadulla district on the then UPFA ticket at the 2010 parliamentary election. The decision to issue a report against privatization of SLT seems to be in line with MP Weerasekera’s patriotic zeal. He was the only UPFA lawmaker to vote against the 19th Amendment to the Constitution enacted in early 2015. In spite of the then President Maithripala Sirisena personally appealing to the rebel UPFA parliamentary group, Weerasekera declined to throw his weight behind what was touted as the panacea for constitutional problems.
Responding to The Island queries, MP Weerasekera explained that his committee highlighted the danger in the government losing control of the vital telecommunications sector. “The issue at hand cannot be discussed without taking into consideration political, economic and social developments that led to President Gotabaya Rajapaksa’s unceremonious exit last July,” the 71-year-old parliamentarian said.
MP Weerasekera said that he didn’t want to repeat the SOC report but the government couldn’t absolve itself of the responsibility for examining all aspects before fully privatizing the telecommunication sector.
Referring to the statement issued by the PMD, lawmaker Weerasekera said that the Cabinet of Ministers, headed by President Wickremesinghe, should be held responsible for whatever the consequences of the privatization.
President Wickremesinghe, who holds the finance portfolio, repeatedly declared his intention to privatize even the profit-making public enterprises as part of his economic revival strategy. However, the success of the UNP leader’s strategy entirely depends on the SLPP stand on privatization. Having elected Wickremesinghe as the eighth President at an unprecedented vote, the SLPP is deeply upset over the former’s failure, so far, to accommodate about 10 ‘pohottu’ members in the Cabinet. Can the SLPP back Wickremesinghe regardless of the blunt report on SLT, endorsed by its own party men, including rebel SLPPers?
However, the composition of the SOC seems irrational as seven out of 11 all barring three happened to be members of one political party.
Perhaps, 15 political parties represented in Parliament should state their stand on the proposed SLT privatization. Of those 15 political parties, nine are represented by one member each. UNP (National List MP Wajira Abeywardena) is among them.
There had never been such a controversial SOC report since the introduction of the system. The Speaker, the Deputy Speaker, Deputy Chairperson of Committees, the Prime Minister, Leader of the House, Leader of the Opposition in Parliament; and Ministers of Cabinet appointed under Article 43(2) of the Constitution cannot serve on SOCs appointed in terms of Standing Orders 111. SOCs have the power to examine any Bill, any subsidiary legislation, including Regulation, Resolution, Treaty, Report or any other matter relating to subjects and functions within their jurisdiction. There cannot be more than 20 SOCs at any given time.
Yugadanavi fiasco
Now that PMD has declared the final decision on SLT privatization would be taken at the Cabinet, let me discuss the Yugadanavi deal that was challenged in the Supreme Court by three members of the then President Gotabaya Rajapaksa’s Cabinet.
Now that PMD has declared the final decision on SLT privatization would be taken at the Cabinet, let me discuss the Yugadanavi deal that was challenged in the Supreme Court by three members of the then President Gotabaya Rajapaksa’s Cabinet.There hadn’t been a previous instance of ministers moving the Supreme Court against a decision taken by the Cabinet of Ministers. Although the apex court dismissed petitions without giving reasons, disclosures made by petitioners, Vasudeva Nanayakkara, Wimal Weerawansa and Attorney-at-Law Udaya Gammanpila bared the ugly truth. There hadn’t been a previous instance of any Sri Lankan government entering into such an agreement at midnight. The agreement signed on 17 Sept., 2021 at the behest of the then Finance Minister Basil Rajapaksa is in the public domain.
The consideration of the petitions concluded on 23 February, 2022 before a five-judge bench consisting of Chief Justice Jayantha Jayasuriya and Justices Buwaneka Aluvihare, Priyantha Jayawardena, Vijith Malalgoda and L.T.B. Dehideniya.
The three daring ministers revealed that the government sold 40% of shares of West Coast Power Limited to New Fortress Energy of US without following proper procedures. They declared they never approved the deal. Unfortunately, the Dullas-Prof. G.L. Peiris-led group remained silent. Had they, too, raised the issue perhaps the Rajapaksa brothers could have reconsidered the decision. By the time the Dullas-Prof. Peiris group decided to oppose Ranil Wickremesinghe’s election as President, it was too late. The SLPP was in disarray. The party appeared to have accepted Wickremesinghe as its saviour, hence the decision to vote against Dullas Alahapperuma, who served the Rajapaksas diligently.
Some of those who had served President Gotabaya Rajapaksa’s Cabinet at the time Sri Lanka entered into the controversial Yugadanavi deal (a section of the media calls it New Fortress deal) are in the current Cabinet. Prime Minister Dinesh Gunawardena is among them.
The SOC Chairman said that he initiated the inquiry into the proposed sale of SLT on his own as he felt the urgent need to do. “No, the Parliament didn’t intervene in this matter.” The former minister said so when the writer asked him whether the Parliament directed him to examine the issue at hand. MP Weerasekera insisted that he had secured the consent of all before tabling the report.
Before tabling the report on SLT in Parliament, the SOC Chief took up the Canadian declaration of genocide in Sri Lanka and travel ban issued on military and political leaders over accountability issues. The former Navy Deputy Chief of Staff questioned the lapses on the part of successive governments in countering unsubstantiated war crimes accusations that led to the co-sponsorship of the Geneva Resolution by the then Yahapalana government in October 2015, a treacherous act, indeed.
MP Weerasekera stressed that the responsibility on the Foreign Ministry and of Parliament to counter the despicable Canadian move meant to please particularly Canadian voters of Sri Lankan Tamil origin, who are an important vote bank there. Yahapalana partners, the UNP and SLFP, also owed an explanation and public apology for the great betrayal of the war-winning armed forces, he said.
The SOC Chairman said that the move to sell the remaining government-owned shares should be closely examined against the backdrop of other external investments in key sectors, including harbours as well as the country’s bankrupt status.
Responsibilities of Cabinet, Parliament
Ministers exercise executive powers in Parliament. Therefore, they are not subject to the scrutiny of SOCs or watchdog committees. Secretaries to ministries in their capacity as Chief Accounting Officers of respective ministries are answerable to Parliament in all matters pertaining to finances. However, in a case of perceived national security threat as alleged by the Sectoral Oversight Committee on National Security, perhaps the entire Cabinet of Ministers should be held responsible.
The bottom line is can the Cabinet of Ministers go ahead with the sale of SLT without a proper re-evaluation of the SOC report that quite strongly advised against the privatization of the national telecommunications provider, on national security grounds.
The examination of the proposed sale of SLT has reminded all that other SOCs can engage in similar exercises in terms of Standing Orders 111. The statement issued by the PMD underscored President Wickremesinghe’s inclination to go ahead with the sale of SLT, regardless of the warning issued by Parliament. The SOC’s National Security assessment represents the considered view of the Parliament.
Therefore, it cannot be simply dismissed as an opinion of a hardline nationalist lawmaker. Even during the naval career of Weerasekera, there were occasions he resorted to actions not acceptable to political leadership in the interest of the country.
MP Weerasekera’s report should be carefully examined by the Cabinet of Ministers and Parliament. The Cabinet of Ministers shouldn’t be simply a rubber seal. But there had been instances of the government even sidestepping the Cabinet in taking far reaching decisions. There cannot be a better example than the utterly disloyal act of co-sponsoring the Geneva resolution against one’s own country without parliamentary or Cabinet approval.
More recently the Wickremesinghe-Rajapaksa government and the Opposition clashed over refusal of the government to take the Parliament into confidence in the run-up to the finalization of the agreement with the International Monetary Fund (IMF).
Ex-Telecommunications’ DG responds to SOC report
Meanwhile, former Director General of Telecommunications Prof Rohan Samarajiva roundly dismissed SOC assertion. Declaring that there is absolutely no basis for SOC’s claim that privatization of SLT threatened the national security, Prof. Samarajiva said national security is important. But it has, for too long, been used as a cheap slogan to mask parochial interests, he said.
In response to The Island query, the outspoken civil society activist and one time Marxist, sent us the following statement: “It should be obvious that a country whose export industries are not competitive and whose government is bankrupt because it spends more than it brings in as revenue year after year will grievously compromise its security and leave itself open to external interference. If not for the reforms that were undertaken in the telecom sector from 1997 to 2003, our export industries would be hamstrung by expensive and poor-quality services. For example, one reason we had no BPO industry in 2003 was the SLT monopoly. Once it was ended the investments came in, jobs were created, and the export earnings realized. Removing the residual advantages enjoyed by SLT so that a more level playing field is created will allow all our export industries, not limited to the BPO industry, to be competitive. The state makes more from the taxes paid by the entire telecom sector than the below-par profit share currently remitted by SLT.
There is no evidence that complete managerial control by NTT, the minority owner of SLT, during the worst years of the war, compromised security. Under 100 percent state ownership and management, national security was compromised because those in charge had not invested in redundancy for the country’s then single international gateway on Lotus Road, a location that had been subject to repeated terrorist attacks. It was after partial privatization and under regulatory direction that this glaring omission was rectified.
National security is safeguarded by identifying specific threats and responding to them appropriately as above. If the problem is data, the solution is the setting in place of effective safeguards by law and regulatory oversight, not having an unqualified presidential sibling as Board Chairman, which was a demonstrated outcome of state ownership. Independently of who sits on the Board, it is possible to require that specific officers in sensitive positions be Sri Lankan citizens who have been subject to security screening. This need not be limited to SLT, but to all major operators.”
