MEDIA STATEMENT

The Auditor General has issued a Special Audit Report dated 17^th November 2022 on the above mentioned project proposal is now published in the National Audit Office website with the following link :

http://www.auditorgeneral.gov.lk/web/images/audit-reports/upload/2022/special/Light-Rail-Transit/Final-Report-LRT.pdf

We, the members of the Committee that had been appointed in 2020 to review public investment projects, wish to draw the attention of all media institutions to the Auditor General’s observations on page 37 in Sinhala and page 140 in English.

The paragraph 5.9.3 of the above-mentioned pages and the contents of the letter issued to the Auditor General by the Director General of the External Resources Department, which is annexed as page 405 of the Auditor General’s report, should be clear enough evidence for anyone to perceive that the Light Rail Transit project proposal was not submitted for our Committee’s review, because, the Government, even by then, had already decided to withdraw that project proposal.

As such, the above pages of the Auditor General’s report stand as proof to repudiate the false opinion that was created through social media and at various other places by numerous parties, including some personalities associated with several professional bodies, claiming that the Government has decided to cancel the Light Railway Transit project based on a recommendation of our Committee.

We wish to emphasise that our Committee handed over to the Secretary to the Ministry of Finance all our reports including our analytical observations and/or recommendations on the projects in Railway, Highway, Irrigation, Water Supply and Urban Development sectors that were submitted for our Committee’s review, including the Kelani Valley railway electrification proposal, which, apparently has been mistakenly considered by social media networks and many others who have expressed their views, as Light Rail Transit project, possibly in their confusion between the two different projects. We informed, by our letter of resignation from the Committee with effect from 30^th June 2021, that all such reports be treated as final reports”, and all those reports have now been submitted to the Auditor General as well. We take this opportunity to reiterate that all of us, who served as members of this Committee, continue to collectively stand by the observations and/or recommendations that were submitted to the Government through our reports.

With regard to public investment projects, irrespective of their sectors concerned, independent, professional and nationally undertaken appraisals are an imperative pre-requisite before making decisions on those prior to their implementation.  In such analyses, all available project alternatives to achieve the planned objectives have to be comparatively evaluated and those alternatives with least possible capital intensity and with highest possible benefit generation capacity have to be selected. Similarly, in addition to the output focus, maximum domestic effective demand creation, and thereby maximum domestic value addition, should be aimed at through project implementation; in view of which, the priority, to the extent possible, should be given to execute projects deploying domestic entrepreneurship. Even under the circumstances where execution of projects on foreign loans through employment of foreign contractors becomes unavoidable, we must ensure that such foreign loan funded projects should either generate or save foreign exchange at least to the extent required to pay the corresponding loan instalments and interests. We must underline that one significant cause behind the foreign debt crisis faced by Sri Lanka today is public investment projects implemented during the past few decades on foreign loans hiring foreign contractors without such professional, domestic and independent appraisal. We must prevent recurrence of such possibility at least in the future. For this purpose, it is extremely important that decisions pertaining to projects be taken based on observations and recommendations yielded through an independent, professional and domestic appraisal undertaken by the Department of National Planning, without relying exclusively on appraisals conducted by foreign funded consultants. We wish to emphasise that, not only the officials and authorities, but also the general public, should realise that achieving public investment efficacy, or curtailing corruption and waste, cannot be expected without ensuring such domestic and professional appraisal of projects.

We earnestly request your esteemed media institution to provide adequate media coverage to the full content of the Auditor General’s report, and also to this media statement, in view of delivering the correct information to the public and for the sake of reporting the true picture in this regard.

Members of the Committee that had been appointed to the Project Review Committee, Professor T Lalithasiri Gunaruwan, Former Transport Secretary D S Jayaweera, Chartered Engineer Janaka Kurukulasuriya, and Professor Sohan Wijesekera

14^th December, 2022