Associates of politicians aid scrap iron racket at Cement Corporation factory

10 August 2023 12:12 am – 1      – 492

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The Cement Factory situated in Kankasenturai currently has about five trillion rupees worth of iron which is slowly deteriorating over time


  • State Minister of Primary Industries Chamara Sampath withdrew the Army from the Cement Corporation factory premises without considering vital factors
  •  Local residents have started stealing iron from the Cement Corporation factory
  •  Concerned individuals affirm that there’s a need to investigate why Minister Sampath hired seven workers from Badulla and brought them to the Cement Factory situated in Kankasenturai
  •  According to the Public Enterprises Circular 2/2016, the Cement Corporation is restricted from hiring new employees

In 1950, a cement factory was established in Kankesanturai under the Department of Industries. Over a period of time this cement factory was transformed into a public corporation and operated under the regulations outlined in the Government Sponsored Corporations Act No. 19 of 1955. Subsequently, it was named Kankesanturai Cement Works. Later on, under the Industrial Corporations Act No. 49 of 1957, it was renamed Ceylon Cement Corporation. Both the Puttalam and Ruhunu cement plants, along with the paper bag unit at Mattakkuliya, were also incorporated into the Cement Corporation.

The Kankesanturai cement plant, with a long history, ceased operations in 1990 due to the prevailing war situation in the North. The ownership of this cement factory remains with the government. On the other hand, both the Puttalam and Ruhunu factories were publicised; after they were declared as entities running at a loss. The government-owned Kankesanturai cement plant is in a sorry state today and what’s left are its iron pile, buildings and the land. The factory currently has about five trillion rupees worth of iron, which is slowly deteriorating over time. Attorney-at-law Gamini Ekanayake, former Chairman of the Cement Corporation, said that a portion of this stock of iron was sold as scrap after the conclusion of the war with the government’s knowledge and approval.
Nevertheless, during that time, it was not possible to completely get rid of the iron due to the prevailing political environment. However, in 2018 the then Minister of Industry & Commerce and Vocational Training & Skills Development Rishad Bathiudeen submitted a cabinet proposal aimed at the removal of iron and dismantling of structures from the cement factory premises. This was set with the purpose of constructing an industrial zone on the same land. During this period, the Kankesanturai cement factory encompassed an expansive 731 acres of land. However, considering the military considerations a portion of this land, namely 151 acres, was allocated as follows: 50 acres designated for the army, another 50 acres for the Sri Lanka Port Authority, 6 acres for the Ceylon petroleum storage terminal, and 45 acres for the internally displaced persons, as per the Cabinet Memorandum (ref: 18/1813/818/017) dated 08-07-2018. An additional 50 acres was illegally acquired by unauthorised individuals. As a result, the Kankesanturai cement plant’s land is now calculated as 530 acres. Plans were drafted for the utilization of 200 acres for prospective development endeavors. The remaining 330 acres was intended for the establishment of an eco-friendly industrial zone. However, the realization of these plans was halted due to the change in governments.
Nonetheless, following the assumption of power by Sri Lanka Podujana Peramuna renewed discussions emerged concerning the Kankesanturai cement factory. This matter resurfaced through the presentation of a cabinet memorandum. Former Industry Minister Wimal Weerawansa presented a Cabinet Memorandum referred to as 2021/05 on January 18, 2021. The proposal was about a plan to clean the facility by removing inoperable materials within the factory which included the extraction of building structures, machinery, scrap iron, and steel that no longer served a functional purpose within the industrial compound.
Initially a cabinet memorandum was proposed suggesting the complete demolition of the factory, but this was opposed by Gamini Ekanayake. His belief was that any decision regarding the Kankesanturai cement plant should not be undertaken without a comprehensive technical study. Subsequently, the Minister of Industry at that time, Weerawansa, supported this decision.
Consequently, a report was made by a committee comprising six members, headed by Mechanical Engineer R.A Weerasuriya from the Ceylon Industrial Development Board. The report said that approximately 80 percent of the structures planned to be destroyed could undergo reconstruction and utilization. The expert committee’s report also mentioned that iron could not be utilised due to its deterioration. Gamini Ekanayake said that according to the committee members the value of the iron and steel was estimated to surpass 500 million rupees. He then submitted this report to the Cabinet to call for tenders and the subsequent sale of the scrap iron and steel, under the supervision of the Ministry of Industry. “However, prior to that, I had to step down from my role as the chairman of the cement corporation. The present chairman can call for tenders facilitating the sale of iron and steel to generate revenue for the cement corporation according to the committee report,” Ekanayake added.
However, State Minister of Primary Industries Chamara Sampath, withdrew the Army without considering the presence any of these factors. As a result, local residents have started stealing iron from the factory. The cement corporation lacks the necessary workforce to manage the Kankesanturai factory properly. According to the Public Enterprises Circular 2/2016, the Cement Corporation is restricted from hiring new employees. Given the present situation, the security of the cement plant should be entrusted to either the Civil Defence Department or the Army. Minister Chamara Sampath opted to bring in seven individuals from Badulla at the cement corporation’s expense, and assigned them with the responsibility of overseeing the cement plant. Currently, there are no personnel from the Cement Corporation present at the site other than the seven individuals brought from Badulla. There is a serious suspicion that these individuals may have ulterior motives,” Ekanayake added.
According to Ekanayake, there’s a need to investigate why Minister Sampath hired seven workers from Badulla and brought them to Kankasenturai. This move appears puzzling since the Minister had let go of employees when the President took charge. Additionally, only authorised individuals can enter the cement factory precinct. Ekanayake pointed out that even during his time as chairman he always obtained permission from the Ministry of Industry before visiting the Kankasanthura cement plant. This raises suspicions whether these seven workers might have been employed to indulge in questionable activities at the site where there is valuable iron and steel worth 500 million rupees.
This writer spoke to State Minister for Primary Industries Sampath. The Minister said, “The Cement Corporation is currently not under my purview. It falls within the purview of the Ministry of Finance. Our priority now is to secure an investor for this. Back when Minister Weerawansa was in charge, efforts were made to sell iron, but no investor expressed interest. To proceed, we need to consult with politicians from the North. The army remains stationed here and they were moved here and there. They safeguarded the site, and the theft of iron was done by individuals who resettled during the period of Yahapalana regime. Investors are coming. They come and see. But there is no follow-up. The two packing plants are good.
You can bring cement powder from Pakistan and pack the cement. This land is valuable. It has all the resources. We got 7 individuals from Badulla to protect this. Security service was sourced from Badulla. We provided them with food. That’s all. No additional expenses have been incurred. They protected that place. We did not get security services exactly from Badulla. The Army said that they cannot provide protection after they leave even if it is a government institution. The civil defence did not arrive either. Security services were arranged from Badulla to safeguard the cement plant, as per a board decision. A member of the board of directors has ties with Badulla. He was tasked by the board to employ individuals. Subsequently, the group was brought in from Badulla. It has been seven days since these individuals arrived. With their arrival the place is protected now. All these decisions were collectively made by the chairman and the board of directors,” said Sampath. Consequently, the minister suggested inquiring with the chairman about these matters.
We then attempted to make inquiries from Cement Corporation Chairman Jagath Dharmapriya. Despite multiple attempts to contact him via telephone on August 3, 2023 there was no response. However, the Chairman had recently communicated the following to the media:
“The Kankesanturai cement plant had enjoyed the protection of security forces for three decades. However, following the conclusion of the war, we do not have a workforce to maintain a huge security presence. So far there have been incidents of stealing iron amounting to approximately 120 million rupees. Formal complaints have been lodged with the police regarding these thefts. In 2019, a tender board was convened under the leadership of secretaries from three ministries to prepare for the tendering of iron and steel,” said Dharmapriya.
Twenty suspects arrested by Police
Following a complaint made to the Police by an official of the Cement Corporation and an ensuing investigation the law enforcement officers were able to arrest 20 suspects. At the time of the arrest these suspects had sold the iron that they had acquired in a questionable manner. The Police have begun investigations in this regard. The Kankasanthurai Police have taken steps to produce the suspects in Jaffna Court.

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