This essay carries four statements made by\nMahinda Rajapaksa <\/p>\n\n\n\n
STATEMENT NO 1<\/strong> YAHAPALANA\nGOVERNMENT\u201d<\/strong> (<\/strong>Island 9.1.18) <\/p>\n\n\n\n In a statement issued to media on 9.1.18 the\nformer President said: On 9 January 2018, the so-called Yahapalana government\ncompletes three years in office. During this short period they have created\nnumerous crises running through virtually every sector in Sri Lanka. The main\nsubject of public discussion today is the bond scam and the attempts being made\nby the Yahapalana leaders to sweep it under the carpet.<\/p>\n\n\n\n We are awaiting the release of the full report\nof the Bond Commission. The bond scam is only one of the many disasters brought\nupon this country by the Yahapalana government. As this government marks its\nthird anniversary, I wish to draw the attention of the public to another danger\nthey have brought upon this country. <\/p>\n\n\n\n During the short period of 36 months that this\ngovernment has been in power, they have borrowed over USD 14.6 billion in\nforeign currency loans alone, the breakdown of which would be as follows – USD\n7.2 billion through the issue of Sri Lanka Development Bonds from January 2015\nonwards, USD 3.6 billion from sovereign bonds issued in 2015 and 2017, USD 2.2\nbillion through currency swap arrangements with India in 2015 and 2016, USD 1.7\nbillion through syndicated loans arranged through several international banks\nin 2016 and 2017 and USD 1.5 billion from the IMF Extended Fund Facility in\n2016. No previous government has borrowed so much money through foreign\ncurrency loans in such a short period of time. <\/p>\n\n\n\n Even though 14.6 billion USD would suffice to\nbuild five Norochcholai power plants, five Hambantota harbours with enough\nmoney being left over to build two more Southern Expressways, the Yahapalana\ngovernment has not built even a culvert with that money.<\/p>\n\n\n\n I have\nmade reference so far only to foreign currency loans. From January 2015 to\ndate, the Yahapalana government has borrowed well over Rs. 5.7 trillion in\nRupee loans as well, through the issue of treasury bills and treasury bonds. The\ngovernment commissioned the Moragahakanda project and opened the Rajagiriya\nflyover to coincide with its third anniversary so as to answer the critics who\nsay that the Yahapalana government has not built anything tangible despite\nmassive foreign borrowings. <\/p>\n\n\n\n However, the Moragahakanda project was\nplanned, financial allocations were made and construction commenced under my\ngovernment way back in 2007 in accordance with the 2005 Mahinda Chintana\nprogramme. Likewise the Rajagiriya flyover was planned and money was allocated\nfor its construction by my government. Cabinet approval was granted to call for\nbids to select contractors for the construction of the flyovers in Rajagiriya,\nPolgahawela and Ganemulla at the cabinet meeting held on 4 December 2014. <\/p>\n\n\n\n The Yahapalana government has marked its third\nanniversary by claiming credit for projects for which money was allocated and\nstarted by the previous government. They came into power in 2015 claiming that\nthere was a debt crisis in the country due to the loans taken by my government\nto build power plants, harbours, airports, expressways etcetera. However the\ntotal cost of these major development projects were as follows: USD 1,350\nmillion for all three phases of the Norochcholai power plant; USD 740 million\nfor the Southern Expressway from Kottawa to Matara; USD 1,300 million for\nphases I and II of the Hambantota harbour and its bunkering facility; USD 292\nmillion for the Colombo-Katunayake expressway and USD 209 for the Mattala\nairport. <\/p>\n\n\n\n All these development projects put together cost\nless than USD 3.9 billion. The claim that the present government has been\nforced to borrow heavily to repay the project loans taken by my government is a\ncomplete lie. With the 14.6 billion USD in foreign currency loans that this\ngovernment has borrowed up to now, the loans taken for all the above mentioned\ndevelopment projects could have been repaid four times over.<\/p>\n\n\n\n The\ndebt now being incurred is used to meet the day to day expenses of the Yahapalana\ngovernment and not to repay the project loans taken by my government. From\nJanuary 2015, there was a massive and unplanned increase in government\nexpenditure as a result of state funds being utilized to meet political\nobjectives. The present debt crisis came about due to the Yahapalana government\nborrowing heavily in Rupees and in foreign currency in order to meet this\nincreased expenditure. <\/p>\n\n\n\n Foreign currency loans should always be taken\nwith the utmost care. Since it is necessary to purchase foreign currency to\nrepay such loans, even a slight change in the exchange rate can give rise to a\nmassive increase in a country\u2019s indebtedness. According to the 2015 and 2016\nCentral Bank reports, due to the depreciation in the value of the Rupee as a\nresult of the economic downturn that took place after the Yahapalana government\ntook office, an extra Rs. 478 billion has been added to the national debt. It\nshould be noted that the increase in the interest rate by about 50% due to the\nbond scam, has also added to the debt burden. <\/p>\n\n\n\n My government was always very careful in\ntaking foreign currency loans. According to the Finance Ministry, the repayment\nof foreign loan installments plus interest during the period 2008-2014 was as\nfollows: <\/p>\n\n\n\n 2008 \u2013 USD 881 million<\/p>\n\n\n\n 2009 \u2013 USD 1,041 million<\/p>\n\n\n\n 2010 \u2013 USD 826 million<\/p>\n\n\n\n 2011 \u2013 USD 971 million<\/p>\n\n\n\n 2012 \u2013 USD 1,620 million<\/p>\n\n\n\n 2013 \u2013 USD 1,160 million<\/p>\n\n\n\n 2014 \u2013 USD 1,306 million<\/p>\n\n\n\n Since\nthese are not unmanageable amounts, my government never had a problem with\nforeign loan repayments. The present crisis is entirely a creation of the Yahapalana\ngovernment. The foreign loan installments and interest thereon that have to be\npaid after 2015 is as follows: <\/p>\n\n\n\n 2015 – USD 1,828 million<\/p>\n\n\n\n 2016 \u2013 USD 1,604 million<\/p>\n\n\n\n 2017 – USD 2,132 million<\/p>\n\n\n\n 2018 – USD 2,891 million<\/p>\n\n\n\n 2019 – USD 4,217 million<\/p>\n\n\n\n 2020 – USD 3,699 million<\/p>\n\n\n\n 2021 – USD 3,344 million<\/p>\n\n\n\n 2022\n– USD 3,743 million<\/p>\n\n\n\n 2023\n– USD 2,120 million<\/p>\n\n\n\n 2024\n– USD 2,067 million<\/p>\n\n\n\n 2025\n– USD 4,155 million<\/p>\n\n\n\n 2026\n\u2013 USD 2,758 million<\/p>\n\n\n\n 2027\n\u2013 USD 3,448 million<\/p>\n\n\n\n These figures amply explain the difference\nbefore and after the change of government in 2015. The immediate increase in\nrepayments from 2015 onwards is due to the huge short term commercial loans\ntaken by the Yahapalana government to be repaid in a few months or one or two\nyears.<\/p>\n\n\n\n What\nSri Lanka experienced in 2015 was a borrowing frenzy. Central Bank records\nindicate that before the Yahapalana government came into power, Sri Lanka\nDevelopment Bonds were issued only twice a year with the amount borrowed per\nyear not averaging even USD 350 million between 2010 and 2014. It should be\nborne in mind that this was at the height of the biggest infrastructure building\nprogramme in recent history.<\/p>\n\n\n\n But in\nthe year 2015 without a single new infrastructure project being initiated, the Yahapalana\ngovernment issued Sri Lanka Development Bonds on no less than nine occasions.\nThe number of SLDB issues made in 2016 were six, with four being made in 2017. <\/p>\n\n\n\n The government has now obtained cabinet\napproval to borrow a further USD 5 billion in foreign currency commercial loans\nin 2018 as well. In order to repay these loans taken for consumption purposes,\nthe government has increased the tax burden on the people to an unbearable\nlevel by increasing the VAT, vehicle import duties, commodity import taxes,\nvarious levies and fines and stamp duties etcetera. From April 2018 onwards,\nthe government will commence a programme to bring virtually every adult in the\ncountry into the income tax net. <\/p>\n\n\n\n Since the massive loans taken by the Yahapalana\ngovernment cannot be repaid simply by increasing taxes, they have now started\nselling off all available national assets ranging from government owned hotels\nto harbours, expressways to power plants. Though the government claims that the\nHambantota port was sold off because the loan taken to build it could not be\nrepaid, the proceeds of the sale have not been used to repay the project loan\nbut is to be sent instead to the Treasury to be spent on consumption \u2013 which\nreveals the actual motive in selling off these assets. Since the Hambantota\nharbour was built with long term loans at concessionary rates of interest, the\ngovernment is in no hurry to repay the loan taken to build it. <\/p>\n\n\n\n However there is an urgent need to repay the\nshort term foreign currency commercial loans taken by this government for\nconsumption purposes even if the payment has to be made with the money realised\nthrough the sale of national assets. If such commitments are not met on time,\nSri Lanka will get locked out of the international financial markets. I request\nall voters to use the opportunity that will come their way on 10\nFebruary to register their protest at the disaster brought upon the\nfinancial system of this country by this corrupt, incompetent government. END<\/p>\n\n\n\n STATEMENT NO 2. HAMBANTOTA\u201d(<\/strong> Island 11.1.17)<\/strong><\/p>\n\n\n\n Former President Mahinda Rajapaksa issued a statement in January 2017\nregarding his much maligned Hambantota project. Since the future of the\nHambantota port is now under discussion, I wish to explain to the public, my\nposition on this matter. The loans taken for the construction of this harbour\nwere 450 million USD for the first phase, 70 million USD for the bunkering\nfacility and 802 million USD for the second phase bringing the total to around\n1,322 million USD. When complete the harbour would have four terminals and 12\nberths. This was meant to be a free port covering an area of 2,000 hectares\nwhere goods could be manufactured or value added and shipped overseas. All the\nnecessary feasibility studies were done before these loans were taken and the annual\ninterest plus capital repayments would amount to about 111 million USD. My\ngovernment had planned to raise that money through the Ports Authority itself. <\/p>\n\n\n\n The first phase of the Hambantota harbour\nbecame partially operational in 2011. The transshipment of vehicles began in\n2012 with 70% of the vehicles coming into Hambantota being transshipped to\nother countries. In 2014, 335 vessels called at the Hambantota harbour followed\nby 295 in 2015. The port made an operating profit of Rs. 900 million in 2014 and\nRs 1.2 billion in 2015. These are investments that last centuries and a new\nharbour cannot be expected to produce large profits in the first few years. Our\nplan was to break even within ten years.<\/p>\n\n\n\n My government had signed a Supply Operate and\nTransfer (SOT) management contract with a joint venture between China Harbour\nCo and China Merchant Co to supply equipment such as cranes and operate the\nHambantota container terminal for 40 years. The Ports Authority was to receive\na rental of 35,000 USD per hectare per year for the 56 hectares in the\ncontainer terminal (a total of 1.96 million USD per year), a royalty of 2.5 USD\non every container loaded or unloaded, warfrage of 30 USD per container for\ncargo coming into Sri Lanka and all other usual harbour charges for navigation,\npiloting, tonnage, etc. Other than the container terminal, all other\nterminals in the harbour and the 2,000 hectare industrial zone was to be\ncontrolled by the Ports Authority and they would have derived the income from\nthe cargo of the free port passing through their terminals. <\/p>\n\n\n\n The new government made some unwise decisions.\nFirstly, they disregarded the management contract for the Hambantota container\nterminal entered into by my government with China Harbour Co and China Merchant\nCo. Secondly, the Ports Authority had developed the Colombo East container\nterminal and upon its completion by 2016, this terminal would have produced a\nrevenue of more than 100 million USD a year which the Ports Authority had\nearmarked to pay off the Hambantota loan until the latter generated sufficient\nincome. The Yahapalana government halted the Colombo East terminal development.\nThirdly, by the end of 2014, my government had signed agreements with several\nforeign and local companies to lease out about 80 hectares in the Hambantota\nport industrial zone at the minimum rate of 50,000 USD per year per hectare\nwith minimum guaranteed volumes of cargo and minimum guaranteed royalties. All\nthose agreements were disregarded by the new government. <\/p>\n\n\n\n Then the government said the Hambantota port\nwas a white elephant and that it had to be privatized to raise the money to pay\noff the loans taken to build it. They called for bids, not just for harbour\noperations but for the rights of the landlord over the entire 2,000 hectare\nfree port so that whoever takes the long lease will operate the entire harbour\nand have complete control over the industrial zone as well. The two companies\nChina Harbour Co and China Merchant Co which made a joint proposal to lease out\nthe Hambantota container terminal for 40 years during my government are the\nsame companies that have made rival bids to lease the entire free port under\nthe present government. <\/p>\n\n\n\n A framework agreement has been signed by the\ngovt. with China Merchant Co to lease out the entire free port for 99 years for\na payment of 1.08 billion USD on an 80%-20% equity sharing basis. No other\nincome will accrue to the Ports Authority for 15 years, after which they will\nreceive dividends for their 20% stake only if dividends are declared. The lease\nwill be extendable for another 99 years and a 44 hectare artificial island\noutside the port has been included in the deal. There is provision for the\nconstruction of another 20+ berths and the rights over these too have been\ngiven to the lessee. <\/p>\n\n\n\n The\namount of the lease seems to have been based only on the construction cost of\nthe port without an accredited international valuation reflecting the strategic\nlocation value of the port, the value of the 99 year period, its 2,000 hectare\nland, the oil tank farm and the value of its present commercial operations. <\/p>\n\n\n\n This bid has been accepted in a situation\nwhere the other company China Harbour Co. had (according to information\navailable to us) put in a much more favorable bid to lease the free port on a\n65-35 equity sharing basis for 50 years with an upfront payment of 750 million\nUSD plus the payment of all the charges they had earlier agreed to with regard\nto the container terminal management contract. The government has chosen the\nleast favorable bid despite (according to information available to us) the\nPorts Authority having recommended the other bidder. Details of how the two\nproposals were evaluated have not been disclosed. <\/p>\n\n\n\n A 99 year lease impinges on Sri Lanka\u2019s\nsovereign rights because a foreign company will enjoy the rights of the\nlandlord over the 2,000 hectare free port while operating the entire harbour as\nwell. This is not an issue with China or with foreign investors. It is about\ngetting the best deal for Sri Lanka. The agreement that my government\nnegotiated with both China Harbour Co and China Merchant Co to manage the\nHambantota container terminal for 40 years is the best deal yet. The bid made\nby China Harbour Co for a 50 year lease is obviously more favorable than the\nbid made by the other company. <\/p>\n\n\n\n As a\nmatter of principle, I am against the leasing of the entire harbour for 99\nyears and giving the rights of the landlord over the industrial zone to a\nforeign private company. The industrial zone and the harbour should be\ncontrolled by the Ports Authority while harbour operations may be given on\nmanagement contracts to the private sector. For example, the Colombo port is\nrun by the Ports Authority and two private operators. The Ports Authority has\nfull control over the Colombo harbour as well as equity in the two privately\nrun terminals. I believe this should be the approach to the Hambantota port as\nwell.\n<\/p>\n\n\n\n Apart from the entire Hambantota free port,\nthe government has decided to lease a further 15,000 acres outside the free\nport to a foreign company for 99 years. In a situation where even the 2,000\nhectares within the free port have not been utilized yet, on what grounds can\nwe justify the leasing of another 15,000 acres to a foreign company? <\/p>\n\n\n\n The total land area of all the Board of\nInvestment economic zones in the country at present put together do not amount\nto 2,000 hectares. A 15,000 acre zone in Hambantota will be disproportionate to\nour country\u2019s economy. Furthermore, the disruption caused to the people of the\narea will be immense if 15,000 acres of land were to be acquired for this\npurpose. <\/p>\n\n\n\n The\ngovernment should fill the free port with investments first before opening more\nzones. Furthermore the government should have supervision over the kind of\nfactories that will be opened in these industrial zones, the fuel they use and\nthe waste they produce. My government agreed only to the use of LNG gas, even\nthough some potential investors wanted to use coal. <\/p>\n\n\n\n The Hambantota dispute is not an issue that\ncan be resolved by baton-charging or tear gassing protesters or having them\nassaulted by thugs and remanded. There are real issues relating to the\nfinancial benefits that will accrue to the country from this deal, and issues\nof control and sovereignty over the free port and possible environmental issues\nthat need to be addressed said Mahinda Rajapaksa concluding his statement. END<\/p>\n\n\n\n STATEMENT<\/strong> NO<\/strong> 3. HAMBANTOTA\u201d<\/strong> (\nIsland 2.8.17)<\/p>\n\n\n\n Former President Mahinda Rajapaksa, condemning\nthe way Hambantota port had been handed over to a Chinese company, said the incumbent administration was selling of\nwhat his government had built.<\/p>\n\n\n\n The manner in which the government privatised\nthe Hambantota port has shocked the nation. Parliament was not allowed to\ndebate the Agreement to privatise one of Sri Lanka\u2019s most important strategic\nassets. No one knows who did the valuation of this asset. No one appears to\nhave seen any technical\/financial evaluation report. The government has also\nnot explained to the public on what criteria they selected the company that won\nthe bid when there was clear evidence that the other bid was much more\nfavourable. <\/p>\n\n\n\n This headlong quest to sell state assets is a\ndirect result of the economic crisis that the government has plunged this\ncountry into. After the yahapalakayas lied their way to the presidency in\nJanuary 2015, they knew it would not be possible to win the parliamentary\nelection that was soon due by the same means, so they increased the salaries of\ngovernment servants, reduced the price of fuel, gas and certain foodstuffs in\norder to bamboozle the people in a different way.<\/p>\n\n\n\n Thereby, they increased government expenditure\nwhile simultaneously reducing revenue, creating the present financial crisis.\nAccording to the Auditor General\u2019s reports, the Budget deficit which was 5.7%\nof the GDP in 2014, had almost doubled to 10.5% in 2015 in just one calendar\nyear. The lack of money to meet day to day expenses including the salaries and\npensions of state sector employees resulted in massive foreign currency\nborrowings. <\/p>\n\n\n\n In just two and a half years, the Yahapalana\ngovernment has taken foreign currency loans amounting to over USD 13.7 billion.\nAll this money has been spent on consumption. USD 13.7 billion is the\nequivalent of ten Norochcholai power plants or ten Hambantota Ports, or more\nthan twenty Southern Highways. But the government has nothing to show for all\nthis money that has been borrowed and spent.<\/p>\n\n\n\n Under IMF instructions, the value added tax\nand other taxes were increased in 2016 to raise money to repay these debts.\nAfter imposing taxes even on terminally ill patients, the government was still\nnot able to raise enough money to repay the USD 13.7 billion they borrowed and\nthey have now resorted to increasing non-tax revenue through the sale of state\nowned assets. <\/p>\n\n\n\n The Budget proposals of the Yahapalana\ngovernment make it clear that they intend privatising all state owned assets\nranging from non-strategic business establishments like the Colombo Hilton to\nstrategic assets like the Norochcholai power plant. The sale of the Hambantota\nport was just the beginning.<\/p>\n\n\n\n The\nPrime Minister has already announced that the Mattala airport would be next.\nOther assets like the Colombo -Katunayake Highway, Southern Highway, Water\nBoard and Electricity Board are also due to be privatised.<\/p>\n\n\n\n In their desperation to justify the sale of\ngovernment owned assets, the government has been deliberately running down the\nenterprises they want to sell, as for instance by stopping bunkering operations\nin the Hambantota port. The total amount that has to be paid for the Hambantota\nport is USD 1,266 million capital + USD 495 million in interest \u2013 a total of\nUSD 1,761 million by 2036. By the end of 2016, nearly USD 500 million of this\ntotal amount had already been repaid.<\/p>\n\n\n\n There\nwas never any problem about meeting the payments for the Hambantota port\nbecause it was paid out of the profits of the Ports Authority. With its\nprivatisation however, the loan taken to build the Hambantota port will be\ntransferred from the Ports Authority to the Treasury to be paid by the tax\npayer. <\/p>\n\n\n\n The government has been trying to justify the\nprivatisation of the Hambantota port on the grounds that the land\nfor the Shangri La hotel was sold outright by my government. The few acres on\nwhich a non-strategic asset like a hotel is built cannot be compared to a\nstrategically important port with four terminals, 12 berths and a 5,000 acre\nindustrial park. The Shangri La land moreover was given on the specific\ncondition that it can be used only for a hotel in accordance with the\ngovernment\u2019s urban development plan.<\/p>\n\n\n\n The\ngovernment has also been saying that my government gave land to a Chinese\ncompany in the Port City. The Port City is new land that is being reclaimed\nfrom the sea. This land has commercial value but is not of strategic importance\nlike a major harbour.<\/p>\n\n\n\n Once the new land mass was created, the\ncompany carrying out the construction was to have the use of a very small part\nof it subject to Sri Lankan law, in lieu of payment. The entire project would\nnot have cost the Sri Lankan government anything.<\/p>\n\n\n\n It should\nalso be borne in mind that my government enacted the Land (Restrictions on\nAlienation) Act No: 38 of 2014 which restricts the ability of foreigners and\nforeign owned companies to buy land in Sri Lanka but the present government\nremoved all such restrictions by Land (Restrictions on Alienation) (Amendment)\nAct No 3 of 2017.<\/p>\n\n\n\n My\ngovernment built or created new things. The present government is making a\nliving by selling what my government built. The government will not be using\nthe 1.12 billion USD that comes from the lease of the port to pay the loan\ntaken to build the port. Instead the money is to go to the treasury to meet the\nday to day expenditure of the government.<\/p>\n\n\n\n The USD\n1.12 billion raised from the privatisation of the Hambantota port is small change\nfor this government and will soon vanish just like the USD 13.7 billion they\nraised earlier.<\/p>\n\n\n\n As\npublic indignation mounts at the manner in which the Hambantota port was\nprivatised, Yahapalana ministers are now going around saying that my government\ntoo had planned to sell the entire Hambantota port to the Chinese.\nThis is a diabolical lie. Everyone knows that my government had an explicit\nanti-privatisation policy. Not only did my government refrain from privatising\nany State assets, we reacquired several important assets that had been\nprivatised by previous governments.<\/p>\n\n\n\n STATEMENT NO 4.<\/strong> UMA OYA\u201d<\/strong> (Island 11.1.17)<\/strong><\/p>\n\n\n\n Former President Mahinda Rajapaksa says he\nwould like to remind those who are blaming his government for implementing the\nUma Oya project that successive governments since 1959 had tried to launch\nit. <\/p>\n\n\n\n The Uma Oya project has come in for much\ncriticism in recent times. A few days ago it was reported in the media that the\nKirindi Oya tributary which flows past Bandarawela had suddenly gone dry as a\nresult of this project. The leader of the JVP stated in Parliament some weeks\nago that as a result of ground water seeping into a tunnel being constructed as\npart of the Uma Oya project, 2,333 wells, streams and springs in the Bandarawela\narea had run dry, and cracks had appeared in 4,625 houses, six temples, one\nmosque and three schools in the area due to the change in ground conditions,\nand further that thousands of acres of agricultural land have been affected.<\/p>\n\n\n\n After\nthings started going wrong, members of the JVP, ministers in the Yahapalana\ngovernment and various NGO activists have been making statements aimed at\nlaying the blame for all this on me and my government. One minister said\nthat this situation had come about because I had wanted to divert water to\nHambantota to irrigate land in my village. The President also stated that this\nproject had been carried out due to \u2018political requirements\u2019.<\/p>\n\n\n\n The Uma\nOya project consists of constructing a dam and reservoir across the Uma Oya at\nPuhulpola from where water would be diverted via a 4 km tunnel to another dam\nand reservoir constructed across the Mahatotilla Oya in Dyraaba. Water from\nthis second reservoir would be channeled through a 15.3 km tunnel to a\nhydroelectricity powerhouse. The outflow from the powerhouse is to be diverted\nvia a 4 km tunnel into the Kirindi Oya, to provide water to parts of the\nMoneragala and Hambantota districts.<\/p>\n\n\n\n The\ndiversion of the Uma Oya has been under discussion for well over sixty\nyears. The idea was first mooted in 1959 in a study carried out by the\nUnited States Operations Mission and the Canadian Hunting Survey Corporation.\nIt also featured in the United Nations Development Programme\/Food and\nAgriculture Organisation Master Plan (1968-1969) for the Mahaweli project.\nStudies regarding the Uma Oya diversion project were also carried out by the\nLahmeyer International Company of Germany in 1989, by the Central Engineering\nConsultancy Bureau (CECB) in 1991 and by SNC Lavalin Inc of Canada in\ncollaboration with the CECB in 2000.<\/p>\n\n\n\n During the UNP led government of\n2001-2004, at inter-ministerial meetings held in December 2003 and February\n2004, chaired by the then ministers of power and energy and irrigation Karu\nJayasuriya and Jayawickrema Perera with the participation of all the ministers\nand MPs of the Uva province, it was decided to implement the proposed Uma Oya\nscheme as a high priority project. On 26 January 2005, under the\nChandrika Kumaratunga government, Cabinet approval was granted to proceed with the\nUma Oya project, based on a cabinet paper submitted by the then Minister of\nAgriculture, Livestock, Land and Irrigation, Anura Kumara Dissanayake. The\nDeputy Minister of this ministry at that time was Bimal Ratnayake.<\/p>\n\n\n\n The JVP\nMinister\u2019s Cabinet Paper bearing No: 05\/0036\/039\/002 dated 4 January 2005\nstated the following: “For the development of the South East Dry Zone\nin Sri Lanka, (particularly Hambantota and Moneragala districts) there is no\nother alternative unless water is diverted from Uma Oya to the South East Dry\nZone.” “Strategy for economic development of both Hambantota and\nMoneragala districts changed during the recent past and diversion of Uma Oya to\nKirindi Oya is now seen in the perspective of recently conceived Ruhunupura development.\n<\/p>\n\n\n\n The infrastructure of Ruhunupura development\nconsists of the development of the Hambantota harbour into one of the modern\nharbours in the region, international airport in the Moneragala district, and\nan oil refinery. It is expected that the Hambantota harbour will attract a\nlarge number of ships sailing in the Indian Ocean. Also a large number of\nindustrial activities are expected to take place in and around Hambantota\nincluding tourism. For all these new developments, projected water requirement\nhas been estimated as 100 MCM in the year 2030. <\/p>\n\n\n\n In the absence of a reliable source of water\nin the area, water from Uma Oya is seen as the only alternative to supplement\nthis requirement.””Therefore high priority should be given for this\nproject.” It was only after all of the above had taken\nplace under previous governments that the Uma Oya project appeared in my 2005\npresidential election manifesto as a priority project. <\/p>\n\n\n\n The JVP supported my candidacy at the 2005\npresidential elections and Uma Oya was made a priority project of my\ngovernment. From winning the war against terrorism to building highways,\nharbours and power plants, my government did many things that previous\ngovernments had only been able to dream about, but never implement. Uma Oya was\none such project.<\/p>\n\n\n\n On 27\nNovember 2007, consequent to consultations held earlier that year by the then\nMinister for Enterprises Development Sarath Amunugama and the then Minister for\nPower and Energy John Seneviratne with the Export Development Board of Iran\n(EDBI) and Farab Company of Iran, an MOU was signed with the Iranian government\nunder the terms of which the EDBI would finance the project and Farab Company,\nwould prepare the detailed engineering design and carry out the physical\nconstruction. <\/p>\n\n\n\n The contractor Farab Company is owned by the\nIranian government and a team of engineers from the Irrigation Ministry, CEB\nand CECB had checked the credentials of this company and its experience in\nhandling similar projects. In 2008 a Cabinet Appointed Negotiating Committee\ngot the contract price fixed at USD 514 million. Though the contract was\nsigned in 2008, construction did not commence until 29 November 2011 until the\nCentral Environmental Authority gave it clearance and a full feasibility report\nacceptable to the engineers of the Irrigation Ministry, Ceylon Electricity\nBoard and the Central Engineering Consultancy Bureau had been received.<\/p>\n\n\n\n Ground\nwater seepage is inevitable when drilling tunnels and measures have to be taken\nto prevent it. According to information available to me, the water seepage has\ntaken place because the German manufactured drilling machine did not have the\nadditional components to fully seal the tunnel as it moved forward. This\nwas apparently due to the project consultants failing to provide the correct\nadvice. <\/p>\n\n\n\n The first seepage of water had taken place\nonly in late December 2014 just days before the present government came\ninto power. The environmental harm it has caused could have been averted if\nremedial measures had been taken in time. However the new government took no\naction because they were too busy persecuting the opposition. <\/p>\n\n\n\n The JVP was also too busy persecuting the\nRajapaksas and helping the UNP to run the FCID to make representations to the\ngovernment to rectify a problem that had arisen in the only major project ever\ninitiated by a JVP Minister. I now learn that the necessary\nequipment has been obtained from Germany. <\/p>\n\n\n\n Whenever a large scale infrastructure\nproject is implemented, there will be communities that are adversely affected.\nWhen the accelerated Mahaweli project was implemented, the entire Maskeliya\ntown had to be shifted to make way for the Maussakele reservoir and the\nTeldeniya town had to be shifted to make way for the Victoria reservoir. <\/p>\n\n\n\n The\nextent of water seepage during the drilling of the Uma Oya tunnel may not have\nbeen anticipated. But in projects of this magnitude, even unanticipated\ncontingencies have to be provided for. Many large projects were implemented\nduring the nine year tenure of my government, and some displacement of people\ndid take place, but there was no public unrest because problems were identified\nearly on, and compensation packages provided to the satisfaction of those <\/p>\n\n\n\n of\nthe affected. Such alertness and efficiency is however lacking under the\npresent government. <\/p>\n\n\n\n Today,\nthe situation is such that if a citizen loses his house in a landslide or flood\nor some man-made disaster, he will be living in a tent or a school until the\nnext government comes into power. There is now agitation over issues that have emerged\nin the construction of the Central Highway which have not been resolved by the\ngovernment. Those affected by the unforeseen problems that have emerged in the\nimplementation of the Uma Oya project have had to endure the consequences inherent\ninefficiency of the present government.[1]<\/a>\n (continued)
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