Will the US nail the coffin or the MCC?
Posted on June 29th, 2020

By Sugeeswara Senadhira Courtesy Ceylon Today

Startling revelations made by Prof. Lalithasiri Gunaruwan, who headed the high level Government inquiry into the proposed Millennium Challenge Corporation (MCC) Agreement is likely to nail the MCC coffin unless the United States renegotiates and withdraws all the harmful clauses in the original proposal. 

President Gotabaya Rajapaksa instructed officials to release the Gunaruwan Committee Report to the public so that the people would be aware of the good, bad and ugly sides of the MCC proposal.

Two agreements signed in 2017 and 2018 

The most surprising fact that was disclosed by Prof. Gunaruwan was that contrary to the repeated claims made, the previous administration and the US had signed two agreements in 2017 and 2018 as regards two phases of the project and the initially proposed grant of USD 7.4 million was raised by another USD 2.6 million, taking the total to USD 10 million. The two agreements were signed in 2017 and 2018 respectively, but the inquiry team could not find any supporting documents in the External Resource Department (ERD) of the Finance Ministry. The questions which arise are why was the money not paid after the agreements were signed? And why was the ERD, the monitoring unit of all foreign funds, kept in the dark?

Another salient point was the Land Commissioner had intimated to the Inquiry Committee that the MCC project could not be implemented as there are no provisions for it in the land regulations of the country. 

MCC violates the Parliament

After handing over the report to President Gotabaya Rajapaksa last Thursday 25 June, it was disclosed that once Parliament approved the project, views contrary to the agreement or any other proposal would be considered a move against the original agreement. Referring to the contents of the proposed agreement, Prof. Gunaruwan pointed out the Attorney General would be denied the right to represent the Government in court. He pointed out the proposed agreement violates the powers exercised by Parliament.

On the same day the Co-Cabinet Spokesman, Plantation Industries and Export Agriculture Minister Dr. Ramesh Pathirana, declared that the Government would not sign the MCC Agreement.

The Government inquiry team

The President appointed Colombo University Senior Lecturer Dr. Lalithasiri Gunaruwan as Head of the Committee to comprehensively review the agreement. The Committee comprised former Secretary to the Ministry of Transport D.S. Jayaweera, President’s Counsel Nihal Jayawardena and Architect Nalaka Jayaweera as members.

The Committee has clearly stated that the MCC Agreement prepared by the former Government contained articles completely contrary to certain clauses of the Constitution and the legal system of the country. It was obvious the approval of main Government bodies was not obtained while preparing this Agreement. The Committee reviewed the proposed MCC Agreement over a six-month period, taking into consideration the views and proposals of various sectors and prepared the report after a lengthy study.

Co-Cabinet Spokesman Bandula Gunawardena said Considering this situation, the Government has taken a firm decision not to sign any agreement which is in violation of the existing laws of the Country and Constitution”. The Government, he said, will never take any decision in an arbitrary manner without informing the public”.

Ranil and Mangala poised to sign the MCC

Discussions about the US $480 million MCC Compact agreement commenced three years ago. While the former Prime Minister Ranil Wickremesinghe and Finance Minister Mangala Samaraweera wanted to sign the agreement pronto and start the project, the then President Maithripala Sirisena cautioned, stating that the proposed agreement should be studied by professionals to ensure that there were no clauses detrimental to the sovereignty of Sri Lanka. The previous Government was poised to sign the MCC Agreement just before the last Presidential Election through a Cabinet decision taken on 27 October, 2019, but did not go ahead due to a public outcry over lack of transparency and clarity over the terms of the Agreement. 

When the Cabinet Memorandum was first presented, it was rejected by the Cabinet. Subsequently, he re-submitted the Cabinet Memorandum dated 5 July, 2019 seeking the approval of the Cabinet of Ministers to sign the Compact Agreement and the Programme Implementation Agreement. However, the Cabinet approval was delayed until early this week due to opposition from President Sirisena in entering an agreement with the US-based MCC. Due to these objections the Cabinet of Ministers deferred the Cabinet Memorandum presented by Samaraweera week after week. Finally the Cabinet approved the proposal on 29 October, 2019 and Minister Samaraweera wanted to rush in and sign the MCC Agreement on 31 October. Infuriated President Sirisena telephoned Samaraweera and ordered him not to sign the agreement until the Presidential Election is conducted on 16 November, 2019.

MR argues Sri Lanka should not sign MCC

When it was discussed, then Opposition Leader Mahinda Rajapaksa said that Sri Lanka should not sign the MCC deal because from the information made available it appeared not to be of national interest. The Government has not taken any steps to explain what exactly this entails and what its impact will be on the country. The contents of this proposed agreement are not known even to parliamentarians let alone the general public. Before this agreement is signed, its text should be made public, and presented to Parliament and debated,” he said.

Mangala keen to sign the pact fast

Despite these objections, Finance Minister Mangala Samaraweera had not given up his strategies to sign the MCC Pact immediately. In fact Prime Minister Wickremesinghe said at a Media briefing that the MCC Agreement could be signed before the Elections.

Mangala’s strange logic was that after the MCC Agreement was signed, he would present it to Parliament seeking approval. Opposition MP Udaya Gammanpila pointed out that after an agreement is signed it will not be possible to annul it. This was confirmed by the Gunaruwan investigative Committee.

Mangala’s statement

At that time Mangala Samaraweera’s statement said The Compact Agreement and the Programme Implementation Agreement will be submitted and enacted by the Parliament of Sri Lanka once it is signed and before its entry into force, it will be published in the Government Gazette before being submitted to Parliament”. 

He argued that the final agreements were done under the guidance of the Attorney General and well within the legal framework. However, he could not reply to the valid argument that the approval of the Parliament should be obtained before signing the agreement. The Finance Ministry said the proposed projects under the MCC Compact were based on constraints to the economic growth analysis” undertaken by the MCC in 2016 on the request of the Government of Sri Lanka.

The MCC and the GoSL subsequently decided to focus on the land and transport sectors, which were identified as binding constraints to growth. The constraints analysis concluded that traffic congestion in the Colombo Metropolitan Region, poor transport connectivity between provinces, and weakness in land administration constrained economic growth. Accordingly, the MCC agreed to grant US $ 480 million for financing the above projects,” the Finance Ministry said.

MR cautions study MCC after Presidentials

As Opposition Leader Mahinda Rajapaksa said, the proper way to get it done is to wait for the Presidential Elections and allow the new Government to study the MCC proposal and make a decision.

While there was such a lot of opposition from different corners, Prime Minister Wickremesinghe agreed to accept the criticism and in a subtle way tried to get approval using a legal loop hole or a way to enter from the back door. However, Mangala Samaraweera was not a patient man. He was a man in a mighty hurry and he continued to exert his power forcefully. Thus, on the MCC Agreement, Mangala was cornered without an exit route.

One Response to “Will the US nail the coffin or the MCC?”

  1. aloy Says:

    “MR cautions study MCC after Presidentials”

    We do not know what is in MR’s mind. But looking at the actions he took after winning in 2010 (like giving Wipaththu, which actually is the Sinhalayage nijabima on a platter) and his recent attempts to hand over east to jihadists we have some doubts. When anyone does something like signing an agreement the person always look for a certainty

    I believe people should not give that authority for MR to decide the fate of Sinhale (or Serendweep, the land of Sinhalayo) to himself again.

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