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Gunaruwan: ACSA, SOFA, MCC could be part of US Indo-Pacific strategy

US leaves Lanka out of MCC
By Shamindra Ferdinando
The much-touted Millennium Challenge Corporation Compact (MCCC) would have undermined Sri Lanka’s status as a sovereign country, Prof. Lalithasiri Gunaruwan said yesterday (17).
Prof. Gunaruwan, an economist, who headed a four-member committee that examined the controversial agreement was responding to the US decision to terminate the offer of USD 480 mn (Rs 89 bn) development assistance against the backdrop of Sri Lanka declining the grant.
The Colombo University don whose four-member committee strongly objected to the agreement as it is, told The Island that the compact posed a threat to Sri Lanka.
He said that he wasn’t aware of negotiations between the two parties on the basis of their report handed over to President Gotabaya Rajapaksa on Feb 17, 2020 at the Presidential Secretariat.
The team consisted of Prof. Gunaruwan (Chairman), one-time Transport Secretary Dr. D. S. Jayaweera, Justice Nihal Jayawardena, PC, and architect Nalaka Jayaweera.
Responding to another query, Prof. Gunaruwan said his committee had recommended remedial measures following an in-depth study of the agreement. He acknowledged that the committee couldn’t ascertain the position taken by the Attorney General in that regard.
The Attorney General’s position has not been made public yet.
In response to The Island query as regards Sri Lanka being denied funding, the US embassy has sent us the following statement: “On December 15, the Millennium Challenge Corporation (MCC) board decided to discontinue the proposed Rs. 89 billion MCC development assistance grant to Sri Lanka due to lack of partner country engagement. The Rs. 89 billion approved for Sri Lanka will be made available to other eligible partner countries in need of grant funding to pursue their economic development priorities, reduce poverty, and grow their economies.
“Country ownership, transparency, and accountability for grant results are fundamental to MCC’s development model. MCC has successfully partnered with nearly 30 countries worldwide on 38 grant agreements, totaling nearly $13.5 billion. These grants have lifted millions of people from poverty by catalyzing local and domestic investment.
“The United States remains a friend and partner to Sri Lanka and will continue to assist Sri Lanka in responding to COVID and building its economy.”
Subsequently, The Island sought an explanation from the US mission with regard to the previous US embassy announcements pertaining to the funding made available to Sri Lanka to the tune of USD 10 mn on two occasions.
The US embassy spokesperson said the MCC grant monies had never been transferred to or spent by Sri Lanka in terms of the then proposed USD 480 mn funding. The official said that funds amounting to USD 10 mn for what the embassy called preparatory activities had been cancelled. The official said: “The government of Sri Lanka first submitted a proposal for MCC grant funding under former President Mahinda Rajapaksa in 2005. All activities in the most recent proposed grant were requested by Sri Lankan Government line ministries and departments, and the programme was negotiated in good faith after extensive consultations with Government officials, the private sector, and civil society. The MCC grant would have been the largest in Sri Lanka’s history and would have benefited more than 11 million Sri Lankans.”
During the previous administration, the US announced the disbursement of USD 7.4 mn (Rs. 1.1 bn) on July 27, 2017 and USD 2.6 mn (Rs.413) in June 13, 2018 grants for preparatory work namely (i) to develop a compact, including identification and analyzing of specific projects and (ii) to finalize compact development. The US embassy stated funds allocated to the tune of USD 10 mn were in addition to the total MCC compact funding amount.
Prof. Gunaruwan’s report has said that in spite of the US Compact being categorised as a development project, it could pose a threat along with ACSA (Acquisition and Cross Servicing Agreement) and SOFA (Status of Forces Agreement). The UNP-led government finalised ACSA in the first week of August 2017. President Maithripala Sirisena, in his capacity as the Defence Minister authorised the signing of the agreement. The US agreements dominated both 2019 presidential and 2020 parliamentary polls. The report says the three agreements could be part of the overall US Indo-Pacific strategy.
Well-informed sources said that the four-member committee had found fault with a decision to allow all procurement and related matters to take place. That decision clashed with a specific provision in the 19th Amendment, sources said. However, the 20th Amendment enacted by the incumbent government had done away with that provision, sources said.
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French Navy Ship PROVENCE arrives in Port of Colombo

The French Navy Ship PROVENCE arrived at the Port of Colombo on a formal visit on Sunday (16 Mar 25) morning.
She was welcomed by the Sri Lanka Navy in compliance with the time-honoured naval traditions.
The 142.20m long Destroyer is Commanded by Captain Lionel SIEGFRIED and manned by a crew of 160 members.
During the stay in the island, crew members of PROVENCE will visit some tourist hotspots in the country and the ship is scheduled to depart the island on 20 Mar.
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Court of Appeal dismisses Ex-IGP’s writ petition

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Project to distribute smart boards for 1,000 schools with the goal of enhancing education has completely failed to meet its objectives and the investment of LKR 1.7 billion has been underutilized -PM

Prime Minister Dr. Harini Amarasuriya stated that the project to distribute smart boards for 1,000 schools with the goal of enhancing education has completely failed to meet its objectives and the investment of LKR 1.7 billion has been underutilized.
The Minister of Education, Higher Education and Vocational Education, Prime Minister Dr. Harini Amarasuriya made these remarks in the Parliament complex on Saturday [March 15, 2025] while discussing the project to establish networked classrooms by facilitating smart boards to the school system.
The Cabinet Memorandum No. AMP/24/0385/601/027 and the Cabinet decision dated March 4, 2024 has been presented for the approval of the provision of digital smart boards and other related equipment to 1,000 selected schools, with the objective of enhancing education through the establishment of a systematic network of smart classrooms within the school system funded by the Sri Lanka Telecommunications Regulatory Commission (TRCSL).
Subsequently, an additional Cabinet Memorandum, No. AMP/24/0978/630/009, dated May 14, 2024, was presented, proposing the implementation of this project in alignment with the project proposed by Chinese government for digitalizing Schools. Under this Chinese-funded project, plans were made to establish a centralized control center and a studio facility, along with the provision of an additional 500 smart boards. Accordingly, the integration of both projects was proposed to create a network of smart classrooms across 1,500 schools.
The cabinet decision has been presented requiring Sri Lankan Government to purchase smart boards with specifications identical to the smart boards which were proposed to be distributed by the Chinese Government.
In line with the Cabinet decision of May 14, 2024, the procurement for the 1,000 smart boards began in July 2024. However, at the time of purchase, the project proposed by the Chinese Government was still at the discussion stage, and no official agreement had been reached regarding the technical specifications of the smart boards.
However, the procurement was carried out through the Sri Lanka State Trading (General) Corporation without a competitive bidding process, relying on price quotations obtained from a single supplier based on unclear sources that were not officially verified by the Chinese government. The Sri Lanka Telecommunications Regulatory Commission incurred the full cost of LKR 1.7 billion, with an additional LKR 430 million allocated for services and installation.
The aforementioned procurement appears to have been conducted at an unusually accelerated pace when compared to the standard procedure typically followed for high-value procurements. Specifically, price quotations were requested on July 5, 2024, opened on July 15, 2024, and by July 16, 2024, the Technical Evaluation Committee had completed and submitted the report. Subsequently, the report was reviewed by the Standing Procurement Committee appointed by the Cabinet on July 17 and 18, 2024, with recommendations being provided on the same day. These recommendations were then submitted to the Cabinet on July 23, 2024, and approval was granted on July 30, 2024. Followed by this, the purchase requisition was issued to the supplier on August 5, 2024. Accordingly, the entire procurement process was completed within a span of one month.
As part of this procurement, a Letter of Credit was opened to facilitate the payment of USD 3,135,392.50 for 1,000 smart boards to Intelligent Express Limited Hong Kong, which has been identified as a representative of Huawei. While the relevant Cabinet paper indicated Huawei as the designated manufacturer supplying the smart boards under the Chinese funding project, the Chinese government has not yet confirmed the selection of such a supplier for this project.
According to aforementioned purchase requisition, the purchased smart boards and related equipment were delivered to the Ministry of Education in October 2024 and are currently stored at Pattala Gedara Teacher’s Training College. Although the procurement of the aforementioned Smart boards by the Sri Lankan Government has been finalized, the relevant project, which was intended to be implemented under the funding of Chinese government, has not yet commenced and a final agreement regarding its implementation has not been reached.
Prior to reaching a final agreement on the network integration facilities and centralized system proposed by the Chinese government, the procurement of these smart boards has resulted in the inability to utilize the equipment for the intended purpose. It is expected that the Chinese aid project is at the discussion stage, and the implementation may extend until the end of this year. Further, no official decision has been made regarding the selection of a supplier for the project.
Given this situation, if the 1,000 smart boards and other equipment currently stored in warehouses are to be distributed to schools, school principals must be provided with clear instructions on their proper use. However, due to the delay in implementing the project under the funding of the Chinese government, specific guidelines on the installation and utilization of the equipment cannot yet be issued.
Since network integration cannot be carried out at this stage, these smart boards can only be used as standalone classroom units. As a result, the objectives of the project will not be met, and the investment of LKR 1.7 billion made might be considered to be underutilized.
A formal investigation has been initiated to determine whether financial and procedural irregularities have occurred in this procurement. Additionally, discussions are currently continued with the Chinese government, and efforts are being made to secure the proposed facilities from China at the earliest convenience.
[Prime Minister’s Media Division]
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