Sugath Kulatunga

In spite of the bankruptcy of country and the accumulated external debt of 36 billion dollars at the end of 2023, the Governor of the Central Bank has the chutzpa to announce that foreign exchange (FE) can now be released to import vehicles. He has qualified this by stating that this has to be done in stages with funds for public transport is given the first priority and the import of private vehicles be considered the last. There is certainly a need to replace the aging public transport capacities and vehicles essential for economic activities. But we need to accept that we are a poor country facing dire economic problems and every dollar spent must be well justified and should be considered as investments.

Public is concerned why this issue is being pursued on the eve of an election. It is known that the present Members of Parliament are clamoring for import permits which they can convert into huge sums of money. It is very likely that immediately after the Presidential elections due in a few months the Parliament will be dissolved. The new MPs have a justification for new vehicles. But the present lot who already have had a good time hardly deserve a parting gift.

When new vehicles are imported it is not only the immediate (FE) cost which has to be Taken into consideration. There will be an immediate increase in fuel consumption and a commitment for spare parts.

Taking into consideration all these ramifications it is imperative that the proposal be kept in abeyance until a new government is elected when a sober decision could be taken considering the national priorities.

It will also a good opportunity to decide on a set policy on importing vehicles and sustaining a national fleet in the best interest of the country. The main issues that needs to be considered are standardization of the vehicle fleet in electricity powered vehicles and progressive manufacture/ assembly of those vehicles in the country creating savings in FE and employment and even exports in addition to the protection of the environment.

A good example to follow is the police adopted by Minister of Finance and Minister of Communications (M/C) in 1964 on the import of vehicles for the Ceylon Transport Board (CTB). As the Assistant Secretary in the Mi/C at the time, I too was associated with the decision making process on this issue. At the time Anil Moonesinghe took over the CTB as the Minister of Communication the CTB had already received offers on a tender for purchase of Buses. There were the offers from Asok Leyland, Mercedes Benz and Fiats for around 2000 buses of different sizes. Anil who had a knowledge of vehicle prices in Europe was not satisfied on the prices and the conditions of the offer. On his instructions I checked through our Embassies the prevailing prices and found the offers made to the CTB were excessive. I still remember accompanying Anil to see NM who was the then Minister of Finance and the leader of Anil. After listening us he remarked, These fellows always play us out, let us play their own game” He requested Anil to invite the 3 firms to come to Colombo for further negotiations on their tenders. We disclosed the best prices that we had received. There were number of rounds of calling for further offers like in an auction and high-level representatives of the three firms eagerly participated in the negotiations. By this strategy the original prices were brought down drastically, and all of the companies agreed to the new terms. (I understand that this procedure of auctioning bids is called the Swiss Challenge system.).

Finally, to be fair by them and also from the point of standardization in vehicle size each firm was awarded with one category of vehicles, with Fiat getting the smallest E category and the supply of bigger buses was given to the other two firms. The Ministers also decided that the winners should agree to transfer the local agencies of their make to the CTB and also agree to the progressive manufacture/assembly of their vehicle in Sri Lanka. Fiat also agreed for a joint venture arrangement with the CTB for the progressive manufacture of a few models of the Fiat car in Sri Lanka. That government went out of power on the defeat of the Press Bill and the incoming UNP government rejected both the transfer of the agencies and progressive manufacture arrangement. Perhaps if we had applied the conditions ageed to at least for a joint venture to manufacture the Fiat car we would have exported Fiat cars to India by 1974.

A small poor country cannot afford the luxury of having so many makes of vehcles and also fuel guzzling luxury vehicles. India was happy with only the Ambassordor car for many decades. We should negototiate with countries like China, Japan, South Korea and even India to get the best offers. Without planning to export our excess electricity to India we must make use of our electricity to elctrify both road vehicles and the railway.

 Sugath Kulatunga