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 Post subject: Railways as factor in socio-economic changes in Sri Lanka
 Post Posted: Thu May 05, 2005 10:20 pm 
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Railways as factor in socio-economic changes in Sri Lanka 1865-1905

RAIL 2000

Professor Indrani Munasinghe,
Department of History,
University of Colombo

The nineteenth century was destined to be area which evoked a profound socio-economic transformation in the island of Sri Lanka. The expansion of plantation agriculture and the opening up of the island by roads and later railways were two most important developments experienced by Sri Lanka following the establishment of British Colonial rule.

In the 1830’s following the opening up of the Kandyan territory by an elementary roads network, there developed the first nucleus of the plantation economy based on coffee cultivation. In the 1870’s coffee gave way to tea as the primary plantation crop. The encouragement of plantation agriculture and its associated trade remained the primary objective in the expansion of transport. The encouragement of the economic position of the indigenous population emerged as another important objective in the 1880’s.

However, the government was not acting on a purely altruistic motive and had as the ultimate motive the increase in government revenue through the development of railways. This assertion holds valid as the government of Sri Lanka directly played a role in constructing and operating the railways. But the emphasis on profitability was more important in case of railway facilities for plantation agriculture which was constructed by utilizing a heavy capital than those designed to encourage the indigenous sector.

The role of transport in the expansion of the tropical plantation agriculture cannot be over emphasized. The remarkably attractive prices for tropical exports during the period resulted in heavy foreign investment in tropical agriculture. It is true the suitability of a region for a given crop attracts the investors and entrepreneurs.

But without the cheap, regular, efficient and quick transportation provided by the railway and the road network, such investment activity cannot be sustained and expanded. The growth of plantation agriculture and transport development is so inter twined, that it is difficult and absurd to attempt establish a causal relationship. Both were interdependent and from the united strength achieved remarkable progress.

With the development of tea plantation in late 1880’s the joint stock companies swallowed up the former individual proprietorship of the coffee era. Under corporate ownership and management controlled by companies the process of production of tea became more sophisticated and needed more and more railways built to the Kandyan Highlands to send coffee to Colombo and to transport labour, machinery, manure, rice and foodstuff etc. to Kandy, another 100 miles of railways were constructed in the tea planting districts to serve the expanding tea domain.

The tea industry had special characteristics which necessitated the railways much more than coffee. Hence the tea plantations produced a higher volume of traffic both upward and downward. The higher increased volume of produce taken by the railway during the tea era was a result of a larger area under cultivation. In 1865, the area under coffee amounted to only 160000 acres, but in 1905 tea amounted to 458045 acres, more than double the coffee acreage. The value of tea exports were far greater than that of any other crop and by 1900 tea accounted for Rs. 53.7 million of the island’s total export earnings of around Rs. 90.8 million. Thus the tea plantations transformed Sri Lanka into a "classic case of an export propelled economy closely tied to the world capitalist economy".

However, it should be emphasised that the railway network constructed during the period 1865- 1905 specially to facilitate the growth of coffee and tea plantation also fostered peasant agriculture, trade, food production in the island and contributed to encourage settlements of comparatively isolated areas, thus achieving a great change in socio-economic development in Sri Lanka.

The total length of railway miles operated during the forty year period was 562 of which 495 were broad gauge and 67 narrow gauge. The lines were owned and operated by the Ceylon Government Railway Department. In 1905 the system consisted of four main lines radiating from Colombo and linking up the principal ports and towns. (see table below).

By virtue of its public ownership, any discussion of the economic impact of railway development should commence by analyzing its importance as a revenue concern to the government. The unit earnings of traffic as well as the volume of traffic is intrinsically connected to the rate policy of the railway. The basic principle underline the rate policy of railways in Sri Lanka seems to be the need to get a fair return on capital investment after meeting all the costs, and to provide an efficient economic service to the public. Hence the rate policy of the Ceylon Government Railway was designed as to raise the largest volume of revenue. By 1905, the railway gross revenue amounted to 28.8 percent of the total government revenue from all sources and was in fact the most important single source of revenue.

The railway revenue during the period under review depended on the plantation economy for the bulk of its goods revenue. For example in 1905, out of a total railway revenue of Rs. 9.6 million, 77% (i.e. Rs.7.4m) was devised from lines constructed in plantation districts. This is more remarkable when one considers that out of 562 railway miles in 1905, the plantation districts had only 250 miles. Hence, the economic viability of railways in Sri Lanka was guaranteed by the rapid expansion of the plantation economy - coffee and tea which responded to the foreign demand for tropical export. Thus it is fair to mention that estate goods constituted the largest percentage of goods traffic. This is to be expected as the estates were essentially a foreign enclave, producing for the export market and drawing its supplies also from abroad, both men and material. The railways provided the links with the port.

The railways not only generated substantial revenue, but also proved to be very profitable from its inception. The gross profits, i.e. revenue less working expenditure, is not a correct indicator of profits. Most of the railway lines were constructed partly or totally out of loan capital and hence interest paid on account of loans should be taken into consideration before any assessment could be made. The loans had to be repaid out of railway profits. To achieve this end sinking funds were created to which annual amounts were paid to repay the loans at maturity. By the end of the last decade of the nineteenth century even after paying the interest and sinking funds, a sum of Rs. 200,000 was available annually for colonial purposes.

The significance of the railway profits on the government expenditure level is made obvious only when one considers the then prevailing colonial economic philosophy that a colony should pay for its own expenditure. It is the assurance of regular railway profits that ensured the payment of such expenditure. However, as observed in the introductory remarks of this paper it is difficult to isolate the other varieties contributing to this. No doubt the railway revenues were high and guaranteed a safe annual income to the government. The high profitability of the railway from its inception was a definite benefit to the government enabling large sums to be spent on public utility and welfare measures as irrigation, education and health and sanitation.

In 1886, the colonial secretary of Sri Lanka, addressing the Legislative Council remarked that:

"railway profits have been spent in enabling the hungry to feed themselves, in diminishing the ignorance, in mitigating the disease and in alleviating the pain of hundreds of thousands of the poorer countryman".

Apart from the direct increase of general revenue by railway receipts, the expansion of railway network helped to swell the government income from other sources such as sale, of crown lands. One could establish a definite co-relation between the sale of the crown lands and the railway development both spatially and temporarily. The railway expansion by ensuring access to the areas of hitherto comparatively difficult terrain, assured increased sales of crown land and a higher unit price. However, the mere accessibility to land does not result in their purchase. The demand for land was due to its suitability for commercial cultivation. The railways by making such land accessible played a positive role in determining the actual sales. For example, with the commencement of the construction of Peradeniya - Nawalapitiya railway line in 1873, the sale price of an acre of land in the Central Province increased from Rs. 14 in 1868 to Rs. 46 in 1872.

Closely related with the development of railways and the expansion of the plantation agriculture was the development of trade and commerce. The growth of towns as service centers, the introduction of a large agriculture labouring class depending almost wholly on the market for the purchase of food requisites, the increasing circulation of currency, the increasing availability of new goods and services in the interior and the increasing purchasing power of the population was rapidly loading to the breakdown of subsistence agriculture and village self sufficiency. This was replaced by a money economy where trade and exchange became important. In the early decades of the nineteenth century the tavalam men who trekked to the isolated villages were the only traders who came to barter rural agricultural produce for a few commodities like cloth, dry-fish and salt. But with the expansion of transport facilities the bazaar towns and town lets had its boutiques selling a varied range of goods from American cigarette tins to Famora soap.

The emphasis on subsistence in traditional agriculture reflects the premium set by the peasantry on self efficiency. This could be to a great degree conditioned by the absence of access to markets, high cost of transport, riskiness of dependence on external source of food etc., which to a large degree depends on the availability of efficient, cheap transport facilities. Consequent of transport development the indigenous cultivator too benefited from the newly created access to markets. The development of the coconut industry which transformed a virtual jungle into an area of coconut groves by the indigenous cultivators is a classic example of such exploitation. But what is more important is the wide range of consumer goods and services made available by the expanding rail network which increased the peasant scale of wants. This devalued the premium placed on leisure preference and acted as a great stimulant to increased efforts and production for the market. The railway network provided transport facilities thus reducing cost and bridging the distances between the centres of production and demand.

The furniture industry of Moratuwa benefited largely by being now able to meet the demand of Europeans, planters and others. The Southern railway provided the transport of furniture such as chairs, tables, almirahs etc. to various towns situated along the railway line and to Colombo. Hence it is obvious that apart from the prospects of plantation goods and traffic complementary to it, there were other traffic also requiring railway facilities especially during the latter period of our research.

On the other hand, it should be mentioned that the extension of transport facilities to the interior had adversely affected some cottage industries, due to the influx of the cheap imported machine made goods. The artisans in villages found that they could not compete with the British manufactured goods. The railway network by providing access to the port of Colombo and thereby to overseas markets made possible a great increase in the import of foodstuffs and clothes. Henceforth imported goods were available at cheap prices even in the interior villages. This affected a social transportation in wants by making the people look towards the West for the ornaments of life. For example with the increasing import of cheap cotton textiles from Manchester the traditional weaving and spinning industries had almost entirely ceased to exist. In this context it is interesting to quote the views of Sir Arthur Gordon, the Governor of Sri Lanka (1883-1890). He wrote to the Secretary of State in 1888.

"Whatever we have succeeded or failed in doing in the East, we have at least accomplished one thing thoroughly - the extinction of native taste and native art and to a great - a very great extent, native manufacture. It is cheaper to import hideous woolen shawls of black and red checked ‘Mac Gregor tartar’, than to manufacture native clothes and muslin. Consequently, the common people now wrap themselves up in these plaid shawls instead of the national Camboy".

Thus the extension of the railway network and the swelling volume of trade played an important role in the popularization of imported clothes among the indigenous population of Sri Lanka. Furthermore, the increasing availability of a wide range of goods such as boxes of matches, Kerosene oil, lanterns and utensils hitherto completely unknown or regarded as luxuries were now literally on the door steps of interior villages and were creating new wants and aspirations. One of the channels of spreading these commodities into the villages was by the ‘village fairs’ and ‘Sunday markets’ whose existence was made possible by the new railways.

An important factor which is often left neglected is the role of railway improvements in propagating new industrial skills. Since 1895, Sri Lankan students were selected from the Technical school to be trained as engine drivers and plate layers. By the end of the nineteenth century it was the settled policy of the government to appoint Sri Lankans as engine drivers. Apart from the engine drivers and platelayers, Maradana Railway Stationrailway was the employer of the greatest number of the highest skilled workmen in the island, its engineering workshops and carpentry works excluding all others in the island put together. The new skills associated with the construction of railway materials and railway workshops is definitely worth recording when one realizes that by 1905 that the railway workshop in Sri Lanka was able to construct three railway engines of its own. The government workshop at Kolonnawa produced most of the employment for Sri Lankans. The new skills developed were fitting, welding and carpentry in the Construction Department and engine driving and signalling in Locomotive Section.


During a period of five years from 1904- 1908, the Railway Workshops were able to erect 160 goods stock bogies and 114 coaching stock bodies. It was found that locally built carriages were far superior to that built in England both as regards comfort, durability and cost. All these work necessitated a large number of personnel. The number of Sri Lankans who gained these skills were no doubt insignificant when compared to the large mass of unskilled labourers. But clearly a start has been made.

Another socio-economic change that occurred due to the expansion of railway network was the provision of increasing volume of employment opportunities for Sri Lankans both as wage earning labourers as well as in the higher grades. By 1912, the large army of minor employers of the Railway Department consisting of daily paid workmen, skilled artisans, porters etc. numbered 8989.

Another employment opportunity for the indigenous population was the supplying of firewood for steaming the engines of railways. The total number of cubic yards of firewood collected by them increased from 44724 in 1876 to 153835 in 1905.

The demand for raiMaradana Railway Station Maradana Railway Stationlway sleepers also provided an useful trade for saw mill owners and timber dealers. Henceforth the railways created a new avenue of business and investments in these fields and contributed to the social and economic advance of low country Sinhalese. As pointed out by Dr. Michael Roberts, the timber contractors too played a great role in the evolution of the indigenous elites.

Ceylon Government Railway was considered as the most important transport facility for travellers to and from Colombo. The major factor that contributed to the increasing number of train travellers with the increase in population was the non-availability of other modes of transport other than carts to compete the railway transport during this period.

The introduction of a better mode of transport often leads to hardships among those engaged in the previous mode of transport. Since the construction of the railway to Kandy, the Colombo-Kandy road "which had been recently one continuous street, teaming with the bustle and animation, was in little more than a line of ruins, rotting carts, abandoned cattle sheds and roofless and tumbling boutiques. Similar regional hardships had occurred with every extension of railways. Though the role of carters as the major conveyors of produce was usurped by the railways, they were increasingly compensated by the amount of feeder road traffic made available by the opening of the railways.

However, it should be mentioned that the railway network was a contributory factor to the rapid development of the road system of the island. Road construction with its great demand for the carriage of heavy materials for bridges and other subsidiary items, such as tar and gravel, was suitably accommodated by the railway unaware of the potent difficulties road transport held in store for it.

The arduous journey from Mannar to the Kandyan Highlands took a heavy toll of life from among the immigrant labourers during the nineteenth century. Furthermore it was responsible for spreading diseases like Cholera and Small Pox to adjoining villages in the north and north-central province of Sri Lanka. But the increasing facility of transport provided by the northern railway not only enabled increasing majority of Indian labourers to migrate enbloc with their families but also saved the lives of both labourers and villagers in the north central province.

The development of towns was greatly facilitated by the opening up of railways. In Sri Lanka the establishment of a railway line was always followed by the development of towns and townlets in junctions and termini. Growth of Colombo is of special importance in this respect.

The expansion of transport is regarded as the most important agent of social change. Its role in breaking down social tradition, caste prejudices, propagating new ideas, wants and habits are well documented in all the literature in transport history. The availability of newspapers even in the interior increased the reading habits of the people, broadened their visions and encouraged them to educate their children.

The rail transport service continued as a public utility all throughout the period under review. Railways played its role effectively and there is no evidence to suggest that export performance of the island during the period was affected by a paucity of deficiency in island transport network.

Nevertheless in analyzing the role played by the railway network in the socio-economic development of Sri Lanka, it is pertinent to make a few observations on the effect of the lop-sided growth of the transport network.

By 1905, the bulk of the country was still relatively unaffected by the transport movements, both roads and railways. Hence, there were hundreds of villages especially in the dry zone of Sri Lanka, completely cut off from the main stream of trade, commerce and development. These villages especially in the eastern, north-western and north-central provinces and in the district of Hambantota continued to sustain in subsistence cultivation, with the same traditional outlook in life with few wants, unaffected and unconcerned with the great changes taking place in the rest of the country. As railways were constructed in areas which assured at least a modest chance of success as a financial venture, bulk of the country was left out of its perimeter. The Batticaloa-Trincomalee light railway which linked the eastern province with the north-central province and the other districts was completed only in 1928.

One of the methods through which the peasant agriculture could benefit from the growth of the plantation agriculture exports was the producing of food needed by the large estate labour force. But the rice growing regions of greatest potential were far away from railway lines of western and central provinces. The unavailability of transport facilities in these areas made marketing an additional hazard even when surplus rice was produced. Hence rice was inefficiently produced, inefficiently marketed and was not always available. This made the government to import rice from India and Burma. However, it would be erroneous to assume that the local rice production decreased solely due to the unavailability of transport facilities alone. Surely these were other factors, which contributed to it. But yet, the railway and road facilities in the rice producing areas may have given the peasants a chance to increase the cultivation of rice and to compete it in the local market, with the cheaper Indian rice.

Furthermore, the heavy cost of transporting rice by railway was another important factor, which prohibited the production of surplus rice even in areas where railway facilities were available. A concession to the transport of local rice would definitely have led to an increase in production. In the earlier classification of railway rates in 1885, rice was at par with coffee. But, classification of railway rates in 1902, rice and grains of all kinds in bags and agricultural implements were charged a higher rate than tea, coffee and other export products. However, our argument is weakened by the fact that imported rice too was charged the same rate and one cannot find a deliberate policy of stiffing peasant agriculture via the railway rate policy.

In the final analysis it should be said that the development of transport and plantation agriculture in Sri Lanka during this period of our research provided a classic example of economic symbiosis. But if we are to isolate the two, we could hypothesis that transport was not only the more important source of government revenue, but also the important agent of social change. Such isolation is illusory, as in the last analysis the two were inter-dependent.

RAIL 2000

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