By Namini Wijedasa
A liquor manufacturing firm helmed by Arjun Aloysius, is fighting local authorities in the Batticaloa District, over plans to build a grain-based alcohol distillery in Kalkudah.
Last year, the Excise Dept gave approval to W.M.Mendis & Co Ltd (of which Aloysius is Chairman) to set up the alcohol manufactory on instructions from the Dept of Fiscal Policy, both of which fall under the purview of the Ministry of Finance headed by Ravi Karunanayake.
The Fiscal Dept’s first communication to the Excise Dept saying, a grain-based ‘Extra Neutral Alcohol’ (ENA) distillery has been approved as a pilot project, is dated May 2015, a bare five months after the presidential election. In March 2016, W.M.Mendis & Co wrote to the Commissioner General of Excise, seeking a distillery licence to commission the plant. This was granted shortly afterwards.
In papers submitted to the Excise Dept, the Company claims the plant will cost an astronomical Rs 4.5 billion to set up. This includes a payment of US$ 12,250,000 (approximately Rs 1.85 billion) to an Indian distillery supplier for equipment and machinery.
The Company has also placed an estimate of US$ 15,430,000 (more than Rs 2.3 billion) for expenditures related to the project, including water, electricity, land and road development, yard lighting, freight and insurance and civil works. The distillery has received approval as a pilot project. It is to be built on a property of 19 acres (7.7481 hectares), bought by the Company at Rs 10.73 million.
But the plan is being opposed tooth-and-nail by local authorities. Construction is currently stopped on an order of the Koralaipattu Pradeshiya Sabha (PS). The Assembly of the Provincial Council of Eastern Province called for the project’s suspension as far back as September 2016. In November, the Koralaipattu-Valachchenai Divisional Coordinating Committee also resolved against it.
W.M.Mendis & Co has responded to the directive of the Koralaipattu PS by issuing a letter of demand to its Secretary, S.M. Sihabdeen. It threatened to haul him to court, if the Company is not allowed to proceed. Mr Sihabdeen told the Sunday Times this week, he will meet the legal challenge, if required. He pointed out that, he had to abide by higher instructions.
“Batticaloa District ranks very high in liquor consumption,” Mr Sihabdeen told the Sunday Times. “Most politicians also do not like to implement the project in this area.” It was not immediately clear why Kalkudah was chosen for the distillery.
Meanwhile, environmental clearance has been granted to the distillery only on a large number of conditions, “which should be strictly adhered to by the developer, to abate environmental pollution likely to arise from the operations…”
There are firm stipulations related to location of the factory within the plot and to noise levels. Solid waste shall not be deposited into water bodies or at sites where it is likely to enter a water body. There must be efficient collection systems to arrest emissions. There must also be a dust absorption system. Smoke opacity should not be over 15%.
There are further conditions related to sulphur dioxide emission and total suspended particulate matter. A carbon dioxide recovery plant must be installed at the initial stage. The Company must submit a comprehensive project proposal on wastewater treatment and pollution control, within a month of the environmental recommendation letter.
There are several rules attached to disposal and treatment of wastewater. A buffer zone is required to be maintained as a green area. Even changes, expansions or extension to the facility shall not be carried out without prior approval of the Central Environmental Authority (CEA).
An email sent to a representative of Mr Aloysius this week, went unanswered.