1. i am not for a moment saying private firms should do this on an altruistic basis. readers were supposed to read between the lines.

2. let me give you an example of what i am saying. think about an insurance company who insures houses for fire only if it is equipped with a smoke alarm and an internal sprinkler system which is paid for by a very small additional cost on the premium [implicit or explicit]. now think what the expected payout in fire claims would be for the insurance company as oppossed to if they did not have such a condition. also think about the peace of mind for the house owner. this is a win-win for both parties.

3. we cannot reduce the probability of a tsunami, but we can reduce the risk of the expected loss from a tsunami if we can increase the risk-averse nature of the policy holder. as long as the savings of the expected loss due to the warning system is greater than the premium then we have a solution that benefits both parties to the transaction. given the public good nature of the AHWS, the consumer surplus is much more than if it were a private good, meaning the benefits are much much more than what accrues to the parties to the transaction.

4. so, there is a clear economic incentive for a all parties to package the AHWS with insurance services. who says our insurance penetration will be static at 9 percent? this could be an ideal way to increase the penetration and spread the additional costs.

Well, without going into the example, let me reword my concern.(No arguments, only a concern)

Agreed, there are many private organisations who are motivated by altruism. But how far can we depend on their altruism? After all, unlike the government organisations that survive for decades after decades without making a profit of single cent and sometimes making millions of losses (Do I have to give examples?) all private sector firms are expected to make a profit. This is for their very survival. And private sector too is not doing very well right now. So how far can we expect them to contribute?

Please also note that when we expect the private sector to contribute, the burden in turn will be passed on to their customers. Only 9% of this country has some sort of insurance policies. So this means 9% has to bear the cost of a system which will serve 100%. I do not know how fair this model is.

My questions is why everyone wants to leave the government out of the equation? It is not only the best player to provide the public goods but also the only player who charges all of us by means of tax for providing us the public goods!! I feel we should force the government to do their part before everyone else. When I pay for something I expect the delivery!

one; i dont know exactly what time sirasa tv announced the tsunami news; but the whole world knows they did a huge amount of coordination and relief work soon after they realized what was going on. and i doubt all this was led purely by a “profit maximization” motive.

two; insurance industry has a clear motive to collobarate because if they can increase the risk-averse nature of behaviour of their policy holders, their expected payout becomes less. its like the sign boards eagle put up near irrigation tanks in anuradhapura warning bathers that certain areas were unsafe. why did they do it? purely for profit motives? purely for altrustic reasons? or a combination of both?

Collaborative actions are necessary to assure that standards-based, all-media, all-hazards public warning becomes an essential infrastructure component available to all societies worldwide.

The Internet Society invites any organization involved in an aspect of public warning to endorse the Challenge. A Web site for expressing such endorsements is available
at http://www.isoc.org/challenge

Among the endorsements thus far are:

United Nations International Strategy for Disaster Reduction/ Platform for the Promotion of Early Warning

United States Geological Survey

United States NOAA/ National Weather Service

I think it would be good for Sri Lanka to endorse this statement, too!

Eliot Christian

Of course, one could argue that Indonesia is not a model for anything, especially in view of the loud silence about the lack of any warning re the December 2004 tsunami.

In my opinion, the public goods and private goods should not be mixed. At the most we can bring the private sector to deliver public goods, but that too should be under the strict supervision of an authority. Leaving things in the hands of the profit driven private sector can be as disastrous as leaving things purely in the hands of the government.

Let me cite an example. On last Dec 26th, one private TV channel was visibly late to broadcast any news on tsunami. Why? Usually, they take pride in bringing news first to the people. The reason probably (This is a guess) is that they were telecasting a cricket match, for they would have had a contract. Till about 11.00 pm this TV channel showed us only the match. They would not have to stop it and bear commercial losses. Probably only after they realised the gravity of the disaster they would have decided to stop the on-going telecast. Had it been a low level disaster they would have gone ahead with the match.

This is the problem with the private sector. Not that they are reluctant to contribute to a national effort, but their prime motive is profit. When there are clashes of interest, it is difficult to predict the way they act.

Insurance companies partially sharing the cost of AHWS looks like reasonable and practical. But what will they ask in return? Also, will they lose their interest if nothing happens for the next five or ten years? In a business world where the priorities change overnight will the private sector have the same interest in contributing their share for AHWS in another ten years? (Particularly if it failed show any visible results - as we all know it can show results only if there is a disaster!)

I think these are some of the questions we have to think about.

Today Ceylinco insurance has announced it is the market leader for insurnce in Sri Lanka with slightly over 30 percent share in both life and general insurance segments. Thier premium income for 2004, was said to be close to LKR 10 billon [USD 100 m].

While it is true that penetration is very low; only some 5 percent of population have any sort of insurance, the industry claimed that the total insurnace claims from the tsunami was some LKR 5 billion [USD 50m].

Roughly extrapoliting the numbers, the insurance industry’s current annual premium in
come is LKR 30 billion [USD 300m] and the tsunami payout alone was one sixth of the same.

I think it is worthwhile to calculate the cost of private sector share of the AHWS and consider the feasibility of packaging the same with the delivery of insurance products across the board.

According to today’s statement by Celinco their premium income is growing rapidly [40 percent over 2003], meaning more and more people are purchasing insurance products.

Perhaps the [net] cost increment on the premium may not be large as anticipated.

My experience is that, with the best intentions, maintenance of facilities are ignored. Pallekale Seismic Monitoring station is not the only example of this glaring problem. Ditto the proposed “National all-hazards warning system”?

In 1994 when I was in the US, I obtained two state-of-the-art mainframe computers, to be donated to Sri Lanka. One machine was a Symbolics (Similar to the computer used to make the movie Jurassic Park) and the other, a DEC VAX. In coordination with Sri Lankan Expats in the US, we shipped the machines to an University in Sri Lanka. (Name of the university omitted to spare them of embarrassment.) The cost of the computers was well over five hundred thousand dollars.

Prior to acquiring and sending the computers, I received the clearance and fullest support of the Vice Chancellor of the University. Furthermore, my father’s colleague, President D.B. Wijetunge, promised University Grants Commission support for the installation and maintenance of the said computers.

What happened to the computers when they arrived at university? The machines were not even installed! Essentially the machines were expensive “boat anchors”! (Also, the receipt of the said machines was never acknowledged!)

Currently seismic monitoring, Tsunami warning systems and implementing agencies are “crawling out from the woodworks”. What is most critical is not only the implementation, but also the diligent maintenance and the strict monitoring of these systems and institutions.

Kind regards,

Dr. Gamini Weerasekera

Second, as I was commenting about the Grid power, I must also put my warning in writing that any Hazard warning system at the end level should not depend on Grid power.

With the recent experience, the SCC start receiving calls from Grid subs right around the country requesting it’s feeders to be switched off. So, even if we are capable of maintaining Grid power, we may have to switch it off for other reasons. Thus, it is preferred that grid power is not relied upon. (Sorry I had again commented on micro level matters!)

A quick note on your second point. I am diametrically opposite with you here. Well, I believe a dedicated warning system is ideal for more organisaied closed environments. (Say for example the Katunayake Airport or WTO) In those environments people are alert enough and serious. On the other hand, when we talk about the country we have highly disorganised, unconnected and casual environments. We are talking about an environment where we cannot even have an unsupervised Pay Phone system. (You might know how the people themselves damaged the Pay Phone booths)

So do you think;

(a) A dedicated disaster warning system will last very long without any supervision?
(b) Will the communities take a voluntary effort to maintain the system? (Specially if they do not see an immediate outcome)
(c) Will they ever take a warning coming out of such a system seriously?

That is why I argue any disaster warning system we use in the rural and urban poor organisations should not be dedicated for that purpose and something that is used in the day-to-day life of the people like Radio or TV.

Even the temple bell is not a dedicated system. It has some other function.

At least I do not think practically we can have a set of unsupervised (may be solar powered) country wide PA system for this purpose. It will simply not work at the moment we want.

So, hazard warning should not only be communicated to the public but also should be so to key organizations that form the cogs and wheels of the warning and recovery mechanism , electricity being #01.

Second, if we use a grass root level hazard warning system, that should be a DEDICATED system that cater ONLY to this purpose. Else, if we install PA systems, what “alternative” jobs that it can be used, perticularly during election period, is any bodies guess.

A Toney system across the island could be a successful medium, dependency on power should not be stumbling block. Is this all for any use? you need funding, you need government approval alienating the govt, even if they are difficult to work with will not help solve the issue.

Early Warning Systems: Do’s and Don’ts

http://www.esig.ucar.edu/warning/report.pdf