News
Sri Lanka’s Chinese debt making international headlines
Sri Lanka’s debt to China is making headlines in international and local media again. Media reports partly blame China and its lending practices, for Sri Lanka’s debt crisis, says a Verité Research media release. It said: The publication titled: “The Lure of Chinese Loans: Sri Lanka’s experiment with a special framework to finance its infrastructure” sheds light on the perils of creating frameworks to facilitate deviations from competitive bidding to tap into concessional export credit from emerging economies such as China.
The report reveals that the root causes of problems associated with loans taken to finance infrastructure are weak regulatory frameworks in the country and the excessive discretion exercised by politicians and public officials in making decisions.The report findings highlight that fixing the country’s procurement regulatory framework and improving independent oversight of the procurement process is essential to prevent irresponsible borrowing, cost overruns, and poor project selection.
Sri Lanka does not have a procurement law enacted by Parliament, and the guidelines that govern procurement can be modified, with Cabinet approval. In 2010, Sri Lanka introduced a framework that allowed the Cabinet to approve the processing of projects that originated as Unsolicited Proposals (USPs) outside the normal competitive bidding process.
The Cabinet approval is given based on the recommendation of a Standing Cabinet Appointed Review Committee (SCARC). This framework was in operation till 2016. The objective was to tap into concessional loans from export credit agencies of emerging economies such as China to finance the Government’s ambitious infrastructure development plan. The period of 2010-2016 can be considered the golden era for financing from China, with Sri Lanka receiving $ 5,895 million in loans from China. Over half of these loans (53%) were realised through projects that were approved by SCARC.
The report analyses the design and execution of the special framework and finds that the lack of rigour in the evaluation process and the ability of decision-makers to exercise excessive discretion made the framework highly prone to abuse and misuse. The analysis of the Gampaha, Attanagalla, and Minuwangoda Water Supply Project (GAMWS), approved by SCARC, demonstrated the weaknesses of the special framework in practice.
The project originated as a USP from China Machinery Engineering Corporation (CMEC) and was awarded to the same company despite having little experience and expertise in similar water projects. The contract was awarded without the normal competitive bidding process and without carrying out the minimum due diligence required. For example, the feasibility study and environmental impact assessments for the project were completed after the contract was signed.
The contract price was 33.4% higher than the cost estimate of $ 172 million. Despite rushing to award the contract in the hope of securing a concessional loan from the China EXIM Bank, the Government failed to secure the concessional export credit facility. Three years after signing the contract, it had to settle for a less concessional loan from the China Development Bank. Delays in securing funding with investigations into alleged malpractices delayed project completion by more than seven years.
The report’s analysis reveals inadequacies in the oversight processes to detect and prevent malpractices. While the Auditor General’s Department frequently reported on financial and other irregularities related to the project, there was no evidence of any legal action being taken against the individuals involved.
This lack of accountability is a key factor that contributes to the recurrence of such problems. The report finds that weak and ineffective oversight makes the rewards of bypassing due process far higher than the risks of getting caught. The findings of the report thus highlight the importance of limiting the Cabinet of Ministers’ discretionary power to create lax regulatory frameworks that allow contracts for publicly funded projects to be awarded outside the normal competitive procurement process. Further, it demonstrates the importance of strengthening independent oversight in the procurement process to prevent such malpractices and having systems to penalise individuals and companies that circumvent due process.
News
New Chancellor appointed to General Sir John Kotelawala Defence University
President Anura Kumara Dissanayake has appointed Air Chief Marshal Kolitha A. Gunathilake (Retd.) as the new Chancellor of General Sir John Kotelawala Defence University.
The letter of appointment was presented to Air Chief Marshal Kolitha A. Gunathilake (Retd.) by Secretary to the President Dr Nandika Sanath Kumanayake at the Presidential Secretariat on Monday (05) afternoon.
Air Chief Marshal Kolitha A. Gunathilake(Retd.) has served as Commander of the Sri Lanka Air Force and as Chief of Defence Staff.
(PMD)
News
Govt. urged to halt ‘illegal’ presidential pardons
By Shamindra Ferdinando
The government is coming under pressure from civil society organisations to formulate a clear ‘mechanism’ to deal with requests for presidential pardons.
Representing civil society organisations, Gamini Viyangoda yesterday flayed the NPP government for the delay in taking action against Ven. Galagoda Aththe Gnanasara Thera, after the Supreme Court declared the 2019 presidential pardon granted to him by President Maithripala Sirisena null and void. He said successive Presidents had abused their executive power to release convicted persons from prison.
Purawesi Balaya activist Viyangoda pointed out that the Supreme Court ruled that President Sirisena had acted arbitrarily and failed to independently consider the relevant materials before exercising his executive power.
The Court of Appeal, in August 2018, sentenced Gnanasara Thera, General Secretary of the Bodu Bala Sena (BBS), to six years rigorous imprisonment for contempt of court over his conduct during proceedings concerning missing journalist Prageeth Ekneligoda. Viyangoda said that those who had been affected by the monk’s conduct have the right to know on what basis the President released him, in May 2019.
The Court of Appeal yesterday (05) ordered the relevant authorities to enforce the remaining period of imprisonment imposed on the Thera.
Gnanasara Thera, who had been subject to an open warrant for his arrest, was produced before the Court of Appeal, today, by prison officials.
Having considered the submissions made before it, the Court of Appeal directed the Commissioner General of Prisons to take the necessary steps to enforce the remaining period of the sentence imposed on Gnanasara Thera. Police on Saturday (03) apprehended the monk at a forest monastery in Kalutara. The Colombo Magistrate’s Court on Sunday (04) ordered the Thera to be remanded in custody till Monday.
Appearing for Gnanasara Thera, Attorney-at-Law Iresh Seneviratne, together with Attorney-at-Law Pasan Karunaratne, told the court yesterday that his client had been experiencing severe mental distress and had therefore gone to an ‘Aranya Senasanaya’, where he had been staying.
Viyangoda said that examination of presidential pardons, executed over the years, would reveal how successive leaders exploited the executive power to appease their own. Responding to The Island queries, Viyangoda said that Sirisena, in Sept. 2019, just two months before the presidential election, granted Jude Shramantha Jayamaha a Presidential pardon.
Jude Shramantha Jayamaha was sentenced to 12 years by the High Court, but the Court of Appeal revised that sentence to death, in July 2012, which the Supreme Court later upheld. Viyangoda said that though the Supreme Court, in June 2024, declared that the particular Presidential action was illegal and arbitrary, law enoforcement authorities were yet to take tangible measures to enforce the court directive.
Viyangoda stressed that no President should exercise the right to pardon a convicted on his or her own without following laid out procedures. According to him, Sirisena appeared to have simply ordered the monk, and the convicted murderer, released in response to appeals received by him. A comprehensive investigation could identify those who had been involved in these wrongdoings.
News
GL urges cautious handling of Saudi death row case, blasts govt. over BRICS affair
Convenor of Janathawadi Joint Opposition, Prof. G. L. Peiris, yesterday (05) emphasised the responsibility on the part of the government and others to act cautiously when making representations in respect of Sivarasa Anojan facing death sentence in Saudi Arabia over a controversial social media post.
Addressing the media at former President Ranil Wickremesinghe’s Flower Road Office, Prof. Peiris emphasised that whatever representations should be made through the Foreign Ministry.
The one-time External Affairs Minister warned of dire consequences of political party leaders, members of Parliament and civil society making direct representations and trying to get in touch with various Saudi authorities over the phone.
Prof. Peiris said that those who intervened on behalf of Anojan should keep in mind that Sri Lanka should be mindful of the Saudi way of governance and sensitivities.
The former Minister questioned the circumstances Sri Lanka was left out of the recent BRICS summit held in New Delhi. He recalled how former President Wickremesinghe discussed Sri Lanka’s entry into BRICS with Russian President Putin and received an invitation for the Summit there but as a result of the change of government, in Sept. 2024, Sri Lanka ignored that invitation.
That resulted in Sri Lanka being left out from the New Delhi summit, Prof. Peris said.
Prof. Peiris pointed out the absurdity in sending the Foreign Secretary to the BRICS Summit in Russia instead of the President, PM or the Foreign Minister to represent the country.
Referring to the forthcoming conclusion of the current IMF programme, initiated during Wickremesinghe’s time, Prof. Peiris said that Sri Lanka lost a great opportunity to benefit from BRICS by failing to represent the country at a higher level at the Russian summit.
The BRICS nations established the New Development Bank (NDB), originally called the BRICS Development Bank, Prof. Peiris said.
Dismissing NPP government’s explanation regarding Iranian ships awaiting necessary supplies but deprived by US imposed restrictions, the former Minister strongly criticised the administration’s response. According to him, this government responded in a similar manner when the US sank an unarmed Iranian frigate just outside Sri Lankan territorial waters in March this year.
Prof. Peiris declared that the government’s assertion that the US restrictions weren’t only directed at Sri Lanka but all Iranian vessels in other regions as well was not acceptable (SF)
-
Latest News6 days agoGold winner Tharanga gets brand-new Honda Vezel from SLAAJ
-
News6 days agoUS-assisted ‘Ice’ detection: NPC to examine IGP’s move to transfer drug-busting team
-
Features7 days agoWhy Sri Lanka needs an Inclusive Civic Nationalism – urgently
-
Editorial5 days agoColombo Port drug bust: The plot thickens
-
News7 days agoCivil society activist accuses govt. of favouring Ven. Gnanasara
-
Midweek Review7 days agoDappula’s Easter Sunday ‘grand conspiracy’ claim demolished
-
Editorial7 days agoWhen crime bosses rise above law and shrines
-
Editorial6 days agoDrug busting, transfers and trust deficit
