US embassy cable - 04COLOMBO937

UNCLAS SECTION 01 OF 02 COLOMBO 000937 
 
SIPDIS 
 
SENSITIVE 
 
FOR SA/INS, COMMERCE FOR ITA:ABENAISSA 
 
E.O. 12958: N/A 
TAGS: ECON, EINV, SENV, CE, ENRG ETRD, ECONOMICS, Political Parties 
SUBJECT: NEW MINISTERS DISCUSS CONTINUITY, BUT NO DETAILS 
IN EARLY MEETINGS WITH AMBASSADOR 
 
REF: COLOMBO 0647 
 
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 
 
1.  (SBU) Summary: In introductory meetings with Ambassador 
in April and May, the Ministers of Commerce and Consumer 
Affairs, Power and Energy, Investment and Tourism, 
Environment and Natural Resources and Ports and Aviation 
stated that many existing programs would continue, reforms 
would be modest, and no major new initiatives were planned. 
A common theme in the discussions was the plan in each 
ministry to be responsive to popular demands raised during 
the election.  End summary. 
 
2.  (SBU) Continuing his series of introductory meetings, 
Ambassador met with Jeyeraj Fernandopulle Minister of 
Commerce and Consumer Affairs; Susil Premajayantha, Minster 
of Power and Energy; Anura Bandaranaike, Minister of 
Industry, Tourism and Investment Promotion; AHM Fowzie, 
Minister of Environment and Natural Resources and Mangala 
Samaraweera, Minister of Ports and Aviation (see reftel for 
biodata).  Ambassador informed each Minister of ongoing or 
upcoming USG programs and solicited agreement to continue. 
Each Minister said that many of the existing programs would 
continue, expressed appreciation for support they have 
received in the past, and assured Ambassador of continuing 
cooperation. 
 
3.  (SBU) The Ministers were not prepared to engage on 
specific issues in depth and requested additional information 
on USG programs.  Each Minister referred to the necessity for 
his Ministry to take early, concrete steps to appear 
responsive to the needs of the population.  (Note: The new 
government believes the opposition's defeat in recent 
elections was due primarily to its inattention to the rural 
population's perception that their concerns were not 
addressed.  End note.)  Specific issues discussed in each 
meeting are outlined below. 
 
Commerce Minister Wants FTA 
--------------------------- 
4. (SBU) New Commerce and Consumer Affairs Minister Jeyeraj 
Fernandopulle listened quietly as the Ambassador recounted 
key US concerns regarding some trade disputes, IPR 
enforcement and the status of the Doha Round.  When the 
Ambassador raised TIFA, however, Fernadopulle lit up and said 
"When can we sign an FTA?"  The Ambassador carefully walked 
Fernandopulle through the process of trade negotiations. 
Fernandopulle, (who Econchief later learned had been briefed 
by representatives of the apparel manufacturing industry 
immediately prior to the Ambassador's visit), then asked how 
to get the process restarted.  The Ambassador suggested a 
letter to USTR indicating continued interest, actions to 
resolve outstanding trade disputes and support for trade 
liberalizing processes in the WTO and upcoming UNCTAD 
meetings.  The Ambassador was careful to note the realities 
of several ongoing US trade negotiations and the upcoming US 
presidential elections.  He urged Fernandopulle to take FTA 
into consideration as a long-term trade-enhancing goal, 
noting that progress this year was unlikely.  Fernandopulle 
suggested he would try to meet with USTR Zoellick in 
Washington, following his participation in the UNCTAD 
meetings in Brazil on June 15 and 16. 
 
Ports and Aviation Minister Wants Development Assistance 
--------------------------------------------- ----------- 
5. (SBU) Minister of Ports and Aviation Samaraweera admitted 
he had no background in these fields, but said he planned to 
move forward on big projects, including major development of 
the southern port of Hambantota, a smaller yacht port at 
Galle and airports at Koggala for tourism and Wellawatte as 
an alternate international airport.  He agreed to continue 
with Customs efforts to make Colombo a Container Security 
Initiative port.  When queried by Ambassador about the halted 
airport privatization, Samaraweera said the GSL was open to a 
public/private partnership instead.  The Minister requested 
visits by the regional TSA representative to discuss security 
implications of opening airspace to more tourist flights 
around the island.  He was also interested in the proposed 
visit by USTDA representatives to discuss other aviation 
projects. 
 
Power and Energy Minister Wants Progress on Projects 
--------------------------------------------- ------- 
6. (SBU) Power and Energy Minister Premajayantha assured 
Ambassador that the planned  unbundling, of power 
generation, transmission and distribution would go forward. 
He agreed that cheap base load power was needed, and said the 
new government would move forward on some stalled projects, 
including the controversial Kotmale Dam, which had been 
delayed by public protests.  Ambassador briefed on the TDA 
grant to conduct a feasibility study for a 300 MW coal plant. 
 The Minster responded positively, and said the Ceylon 
Electricity Board would be responsible for working with the 
USG on the study.  He expressed appreciation for the wind and 
solar maps donated by USAID, and confirmed the interest of 
many firms in the GSL plans to lease offshore blocks for oil 
and gas exploration. 
 
Investment Minister Wants To Remove Obstacles 
--------------------------------------------- 
7. (SBU) Minister Bandaranaike was joined by the new Ministry 
Secretary Dr. U Vidanapathirane, and Board of Investment 
 
SIPDIS 
(BoI) Chairman, Lalith de Mel.  Commenting on his broad 
portfolio, the Minister agreed with Ambassador that export 
diversification was important, and that Sri Lanka needs to do 
a better job in promoting itself to potential investors.  The 
chairman briefed on new BoI efforts, including: monthly 
meetings to address investors, problems, the creation of a 
 land bank, so investors are saved the hassle of finding 
and gaining approval for land, an effort to recruit local (as 
well as foreign) investment, and a campaign to entice 
international Fund managers to invest in Sri Lanka.  The plan 
for tourism includes upgrading existing infrastructure, 
facilities and services, not to increase capacity, but to be 
able to charge more.  Ambassador noted that infrastructure 
upgrades would be essential before prices could be increased. 
 
Environment Minister Wants Quick Results 
---------------------------------------- 
8. (SBU) Environment Minister HML Fowzie said his priorities 
are infrastructure improvement, quick results and protection 
of the people through protection of the environment.  He said 
he would do his best to help investors, and was ready to be 
supportive on issues raised by Ambassador including on 
individual investment cases, and with the Tropical Forest 
Conservation Act. 
 
9. (SBU) Comment: Each Minister was gracious and welcoming, 
but not well briefed.  The bilateral initiatives described by 
the Ambassador were not familiar, and each requested more 
information on specific programs.  The agreement that many 
programs started under the previous regime would continue was 
welcome.  It appears that the Ministers were still waiting 
for direction from party leadership. End comment. 
LUNSTEAD