Mangala sets record straight on MCC grant

By Nishel Fernando
While denying the claims that the government rushed to approve the US $ 480 million Millennium Challenge Corporation (MCC) Compact, the Finance Ministry yesterday stressed that the Cabinet approval for the signing of the Compact was given ahead of the presidential election next week, to avert the risk of Sri Lanka losing the grant. 

“The only reason that the Cabinet approved of this agreement at this moment ahead of the presidential election was to ensure that we don’t lose the US $ 480 million grant to the country.
We have been informed in advance that our primary approval (Cabinet approval) is required ahead of the MCC board meeting scheduled for mid next month in order for them to approve the agreement before signing. Otherwise, we would have risked losing the US $ 480 million grant to the country,” Finance Minister Mangala Samaraweera said.

Sri Lanka was not included among the countries in the MCC 2020 scorecard, as the country was graduated to an upper-middle-income status mid this year.

He noted that Sri Lanka commenced negotiations for the current MCC Compact in 2015 and the grant agreement was initially submitted to the Cabinet in early this year.

“Some are questioning the reason why we rushed to get the Cabinet approval for the grant agreement when the presidential election is nearing. However, I want to clarify that this agreement was only approved by the Cabinet of Ministers late last month, after several months of discussions within the Cabinet,” he said.

Samaraweera also assured that the signing of the MCC grant agreement would take place after the presidential elections, subject to the parliamentary approval.

Commenting on various allegations levelled against the MCC grant, Samaraweera recalled that similar accusations were spread on India-assisted ‘SuwaSariya’ 1990 emergency ambulance service by the opposition and certain politically motivated professional associations.

“Some of these people even claimed that India was planning to invade Sri Lanka through the SuwaSariya’ project,” he said.

However, he pointed out that the same individuals are reaping the benefits of the SuwaSariya 1990 emergency ambulance service today.

Samaraweera urged the public to go through the draft agreement, which is available on the website of the Finance Ministry, before reaching conclusions based on unfound rumours. 
This Compact consists of grant funds for traffic management in the Colombo district, islandwide road construction and land administration improvements covering the whole country.
The majority of funds—US $ 350 million—have been proposed to be allocated for transport projects, which include advanced traffic management system activity, bus transport service modernisation activity and central ring road network activity.

These projects are aimed at reducing longer commutes to Colombo while enhancing public transport facilities.

In terms of other projects, US $ 67.3 million is proposed to be allocated to land projects consisting of five activities that seek to improve access to private and state land, provide a more uniform valuation of land and assist the government in improving the land policy and governance framework, under which land is managed and administered.

Further, he noted that a similar anti-US sentiment came into surface when Sri Lanka was preparing to lease a land parcel of 166.038 hectares in Iranawila to the United States Embassy in 1991 to establish the Voice of America transmission station in Sri Lanka, under the former government led by Ranasinghe Premadasa. However, he noted that the land was returned to the government in 2017, without any issues.

He denied that the US put forward any hazardous conditions to Sri Lanka to access the US $ 480 million grant while noting that the US has been the largest donor nation for Sri Lanka since independence, by providing nearly US $ 2 billion as grants. 

“For example, the Mahaweli Development Programme could not have been a reality without the Rs.7 billion grant provided by the US back then, which constituted 13 percent cost of the project,” he added.

Further, the minister said that the US was the first country to ban the LTTE in 1997 while noting that the US played a key role in getting the consent of the European Union countries to ban the LTTE in 2006.

Therefore, he urged the public not to fall into fabricated stories on the MCC grant, which may lead Sri Lanka to lose the US $ 480 million grant.