Posted on September 7th, 2019


The MCC grant represents the largest grant Sri Lanka has ever received from a single source, said Advocata. The grant is a huge one, USD 480 million. The failure to utilize the MCC grant would be an economic loss to the country. It is about improving the country’s transport system and land registration system, explained Jehan Perera.

USA embassy has provided some basic information on the MCC Compact at  Htps://lk.usembassy.gov/wp- content/uploads/sites/149/MCC-Land-Project-with-GOSL.pdf.

The stated aim of the MCC  is to    reduce poverty and stimulate economic growth, said MCC.  In Sri Lanka we have identified transport infrastructure and weak land administration   practices as the binding constraint on economic growth in Sri Lanka.This is   nonsense. Sri Lanka’s ‘constraints to economic growth’ cannot be   removed by tackling traffic jams and listing  land parcels. Sri Lanka’S economic problems lie elsewhere.

The transport project will improve connectivity between the economically backward central region  with ports and markets in the western provinces, continued MCC. Getting transport right is the key to mark Colombo as a regional hub for finance, trade and investment.

That is doubtful. The Compact does not address the primary transport  need in Sri Lanka today, the need for mass transit, by bus and train, for both persons and goods. The Compact  remedy  instead,   is to introduce ICT controls  for  private transport.  The  MCC Transport project  was described in  detail by an official of the Road Development Authority, at a seminar I attended. The audience gave a hearty laugh at the end of the talk.

Here is the transport project . It is in three parts. Part one is an Advanced Traffic Management System (ATMS) for the Colombo Metropolitan Region, covering approximately 205 kilometers of existing road networks , concentrating on the  eight heavily traveled corridors that link central Colombo with its suburbs   and  including  improvement of  132 junctions in Greater Colombo.

The ATMS will be controlled by a huge Traffic Managment Center with real time analysis of traffic flow data,  interconnected traffic signal system and vehicle detection using modern technology. The project will also create more pedestrian crossings, improve sidewalks and introduce ‘road safety measures’.

The Advanced Traffic Management System had been discussed with other donors. The discussions had stalled because the other donors  had refused to pay certain extra costs relating mainly to land. But  MCC readily  agreed to pay   that too, said RDA gratefully.

Part two is bus service modernization in greater Colombo. This will consist of automated fare collection with smart cards, centralized control of bus schedules and GPS bus tracking to see whether buses are operating according to schedule. These measures would also improve the safety of women, senior citizens and disabled persons. Funds will be also provided for the purchase of new state-of- art buses.

Part three  is the  upgrade of  approximately 131 kilometers of roads in Sabaragamuwa, Uva and Cenral Province which are in between the more developed roads. This would include the road from Ratnapura to Beragala and Dambulla to Naulla. The Compact is offering a  super asphalt mix which will provide a better  road surface.

The   land part of the  Compact seems to have  undergone drastic  change. There is no mention now  of giving deeds to  those occupying state lands so that they can sell the land and become  destitute. The focus now is on creating a cadastral map of land parcels and creating a complete digital inventory of state land.

Surveyors are not impressed.  This is exactly what the American firm, Trimble was going to do, at the start of Yahapalana rule, surveyors said. They also said that this mapping  which the Compact is talking about  could be done by the Land use Planning Department. The Land use Planning Department has already mapped out all sorts of land, they said.   They have mapped out protected areas, unutilized lands,    underutilized lands, abandoned paddy lands, river basins, water sheds. The data will   be fed into ICTA’s National Spatial Data Infrastructure.

The Compact is now focusing on under-utilized state land”   held by government Departments, such as the Government Railway. The Compact is eyeing these lands, which it says can generate better revenue in the hands ofindustrial investors.  Sri Lanka will have a place in these industrial ventures. The MCC compact will provide opportunities for Sri Lankan companies to compete and win multi- million dollar projects,” the US embassy said. We want private sector expertise and we pay really well.”

The MCC Compact has come in for considerable discussion in the last few months. Several organizations have held seminars on the subject and the US embassy has attended and contributed information.

The project negotiations for the Compact commenced in 2004 during the Kumaratunga-Wickremesinghe tenure and continued during the Rajapaksa government until the project was terminated by MCC in 2008, said Pathfinder Foundation.

 During this period, the local Compact team and MCC specialists had extensive discussions with the departments responsible for transport and land administration. They also had discussions with the private sector,   think tanks, and civil society organizations. The present Compact is based on a full-fledged proposal submitted by the government in November 2017, said Pathfinder Foundation.

Sri Lanka completed negotiations with MCC in October 2018. The government team was led by the Secretary to the Ministry of Finance. The team included senior officials from the External Resources Department, Attorney General’s Department, Policy Development Office in the Prime Minister’s Office, Ministry of Highways and Road Development, Ministry of Lands and Parliamentary Affairs, Ministry of Megapolis and Western Province Development, Ministry of Transport and Civil Aviation, and Sri Lanka Survey Department.

The agreement was to be signed in December 2018 but was delayed due to the political events of the time. However, MCC’s Board of Directors approved the Compact again at its Board meeting in April 2019. The Compact now awaits approval by the Cabinet and signing of the agreement by the government, said Pathfinder. But there is hesitation on the part of the government and a reluctance to sign.

Sri Lanka is now at risk of losing the grant, if it does not receive Cabinet approval and fails to sign the agreement prior to the September 18th MCC Board meeting, said Advocata institute, because Sri Lanka has now  graduated to upper-middle-income status and MCC  only helps low and lower-middle-income countries.

MCC’s Board of Directors is due to meet in mid-September 2019. And may decide to disqualify Sri Lanka, if the country doesn’t appear to want or need the $480 million grant, said Pathfinder Foundation.

But the US embassy said that   instead of disqualifying Sri Lanka, MCC directors may decide to extend the US$ 480 million grant term if Cabinet approval is further delayed. Because the US is very keen that this Compact is signed and is keeping it fingers crossed.

 The United States has expressed hope that Sri Lanka will eventually approve the $ 480 million Millennium Challenge Corporation (MCC) grant, said the embassy. Measures will be taken to create awareness on the MCC programme among the people,  the embassy said.

It is most unusual to have a donor running behind a recipient like this. It is usually the other way round. While the donor (USA) is keen on the compact, the recipient, (Sri Lanka) however, is suspicious and reluctant. Sri Lanka is wondering why USA is so anxious to push this through. Is this simply a grant to   avoid traffic jams and prepare   maps or is it something more. What is behind it all, they ask.

 The MCC is not the independent, altruistic  US foreign assistance agency it claims to be.  The Millennium Challenge Corporation Board is chaired by the Secretary of State. The  Board members are a) Secretary of the Treasury, b) USAID administration ,c) US trade representative, and d) four private sector representatives. This Board  therefore represents  the  political interests and trade interests of the USA. Advocata  Institute   however, says, although heads of the U.S. State Department and U.S. Treasury sits on its board, the MCC operates independently as a separate entity.

The Compact program was proposed by Sri Lankans, developed by Sri Lankans and will be managed and supervised by Sri Lankans, said the US embassy. Not quite. The project proposal was neither proposed nor developed by Sri Lanka. It is unlikely that Sri Lankan economists will produce such a  lopsided proposal.

 The  Compact issues  were first examined  by Harvard University’s Centre for International Development in a year long study in 2016. This was followed  by studies from World Bank, Asia Foundation,  Trimble and Center for Policy Alternatives, Colombo. These are  organizations which have a strong link with USA.

The MCC has no intension to impose any condition forcibly in implementing MCC compact, said the US embassy, adding that they are flexible to accommodate any suggestions of the government before signing it. We will accommodate your needs,  we  can modify the Compact as government wishes, said  USA embassy . At least two years  is needed after signing the Compact to work out the details.

Certain changes have already been made. Attorney General’s Department raised objections to the clause in the original draft which brought the Compact under International law. MCC was asked to remove any sentence which excluded domestic law and the MCC agreed, reported the media.

This is your project. We are not forcing it on Sri Lanka, said MCC. Implementation will be supervised by a local body staffed by Sri Lankans. This body will be accountable to a Sri Lankan Board of Directors comprised of eight government officials and three representatives from the private sector and civil society.

Money will be reflected in the national accounts and national budget and spent by line ministries and supervised by COPE, COPA and Parliament. Grant funds are usually not channeled through the Treasury, but contractors and vendors are directly paid by the donor. Budgetary provisions will be made in the national budget to account for this expenditure. Therefore, it is clearly not outside Government,” said the embassy.

Unfortunately, this Millennium Challenge Corporation grant has been seen as part of a threefold US package of MCC, ACSA and SOFA.  ACSA and SOFA are military agreements; MCC grant is about economic interests,  said MCC supporters.  But they look like a package, replied said critics. All three were to be signed in  2018, one after the other.

Pathfinder Foundation concluded its statement on the Compact, saying that a sovereign nation has every right [and] obligation to turn down foreign assistance, if there is reasonable suspicion that this support is not in the interest of the country. ( Continued)


  1. Ratanapala Says:

    All concerned must look at what happened to Hawaii, what is happening in Haiti and other similar countries where the US has entered with gifts in hand. The indigenes in Hawaii have lost their lands to Robber Barons of the US.

    This attempt is to buy Sri Lanka for a paltry sum of less than half a billion US Dollars. The transport system is for the US vehicles to move with ease from Colombo to Trinco and from Trinco to Hambantota and Trinco to Mannar. These are all routes of strategic use for the US deployments.

    Sri Lankan lemmings are running to the sea!

  2. Susantha Wijesinghe Says:




  3. Randeniyage Says:

    Why should Sri Lanka beg money ? Why can’t we take back ALL stolen billions of dollars including bond scam ? Why can’t we get rid of 13A , reduce spending by down sizing parliament and pradeshiya sabhas ? Why can’t we get billions spent of Luxury Cars ? List is long and savings are there.

    This brings me back to 40 years when my father told me what his brother-in-law suggested. There is this small plot of land of 8mx 1.2m adjacent to his property (originally from my grandfather’s). He knew that we had financial difficulties. One day my parents had a quarrel and he heard it. When my father went to nearby shop and when returning, this man asked him whether he could sell that little plot to him. My father said “NO” and told me how cunning this man is to suggest this when he was in trouble. After 40 years I still own this plot among surrounding land sold to Muslims.

    Signing any agreement should be benefiting to us without any offer of help.
    Which candidate can promise this ?
    Looking at the past ALL are already guilty of secret deals.
    Any major agreements shall be put to a referendum to people at the cost of the country offering it.

  4. Mario Perera Says:

    ”Why should Sri Lanka BEG MONEY ? Why can’t we take back ALL STOLEN BILLIONS OF DOLLARS INCLUDING BOND SCAM ? Why can’t we GET RID OF 13A , REDUCE SPENDING by down SIZING PARLIAMENT AND PRADESHIYA SABHAS ? Why can’t we get BILLIONS SPENT ON LUXURY CARS ? List is long and savings are there.”

    Thank you Randeniyage

    LIST IS LONG…INDEED IT IS VERY LONG. The people are poor but their representatives enrich themselves on the backs of the poor people.

    Where did their wealth come from? From loans. And who pays the loans? The poor people through the taxes. The country is said to be poor because politicians have burdened it with loads and loads of DEBTS. And why not? When the poor pay it off!

    Politicians enrich themselves by stretching their hands as permanent beggars to every country that offers them loans. And who pays…the POOR people. And how do the poor people survive amonag themselves? By offering their legally bound services to others FOR MONEY. It happens in every legal institution, be it the police, be it the court rooms, be it the municipalities…be it anything and everything. BASKSHISH is the order of the day. In plain words this country, the Dharma-Dvipa is the quagmire of CORRUPTION.

    And now it is election time, election to the highest office of the land, which is the mirror of corruption. When we vote we are voting for the perpetuation of this corrupt system. we are voting to continue swimming in this quagmire or more bluntly stated in this SHIT HOLE.

    On this forum a name is splashed about as being the saviour. But this saviour clan was thrown out of office by the people even before it completed its first term in office!!! It was the only presidential term not to go its whole length…ousted just after four of its six years. By whom was it ousted? By a nincompoop who the night previous had filled his belly with hoppers offered at the table of the mighty clan. And so he hopped to the other side, and the entire country preferred the HOPPER to the ones who offered the hoppers! How laughable! Hold your bellies guys and laugh all you want.

    The politicians are HEARTLESS because their electors are HEADLESS. The one-eyed politicians personifications of POLYPHEMUS of Ulysses fame, with their one eye fixed and fixated on LOANS and their enrichment are ruling this country of the blind. All the flower baskets offered before all the shrines of all the temples have not opened the eyes of this blind country. Can anything better be expected when the very POLYPHEMUS go the same temples, before the same shrines, with the same flower baskets!! Is all this anything more than a pathetic FARCE?

    Yes the presidential elections are round the corner. Guess who has his one eye fixed and fixated on it? The POLYPHEMUS!!! The blind people of this country are the sheep the Polyphemus of Homer led in and out of his cave and on whom he feasted.

    Mario Perera, Kadawata

  5. Ananda-USA Says:


    I think a motorist killing a pedestrian through no-fault of the pedestrian is

    1. Manslaughter if the killing is WITHOUT premeditation irrespective of negligence
    2. Murder if the killing is WITH PREMEDITATION with intent to kill.

    On the other hand if the fault lies with the pedestrian,and the motorist is not at fault, he cannot be held responsible under the law and is innocent of any crime.

  6. Mario Perera Says:

    This song on youtube was sent to me this morning by Nimal Fernando from New York.

    අවුරුදු දෙදහස් පන්සීයක් දැන් වයසයි මට මගෙ දූ පුතුනේ…

    ලේකිරි දුන්උන් ලේත් උරාබී ලේ කළඳක් වත් නෑ දෙතනේ…

    දරුවොත් වැදුවා දරුවොත් හැදුවා උන් වැඩි හරියක් සොරදෙටුවෝ…

    දරුවන් වුව උන් පරයන් මැරයන් මගෙදේ කා මට විනකෙටුවෝ…

    උනුන් කොටවලා උගුල් අටවලා රජවෙති මගෙ උන් හැමදාමත්…

    මගෙ රජදරුවන් මගෙ ජන දරුවන් ගැන බැලුවේ නෑ කවදාවත්…

    තමන් හැදෙනු මිස නංගිල මල්ලිල හදන්ට ඕනෑ කමක් නැතී…

    ගේ දොර කණ කර උකසට තියලා වළඳත් විකුණා ගෙන බුදිතී…

    උතුරේ දරුවන් මියැදී ඉවරයි දකුණේ දරුවොත් මිය ඇදෙතී…

    මගේම මහඋන් මගෙ නම විකුණා කොටවා මගෙ දරුවන් මරතී…

    අවුරුදු පන්දහසක් තව ඉන්නට පරමායුෂ මට ඇති බැවිනී…

    මගෙ පොඩි පැටවුනි තෙපිවත් මේසොර මුළුවෙන් මා ගළවනු මැනවී…

    Written by: Sunil Aryaratne
    Sung by: Nanda Malini

    Mario Perera, Kadawata

  7. Susantha Wijesinghe Says:

    AGREE WITH YOU ANANDA. susantha.

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