The opening of the Lotus Tower took an unexpected turn when President Maithripala Sirisena dropped a bombshell of sorts that the Government had incurred a loss of Rs. 2 billion due to an advance paid to a Chinese company. The allegation underscored on multiple levels why corruption and political impunity remain massive challenges for Sri Lanka and how it also influences the political sphere at crucial moments.
According to President Sirisena the Rs. 2 billion was paid in 2012 to a company that was tasked with constructing the Lotus Tower. He referred to the company as ALIT. According to reports available to the public, a Chinese conglomerate consisting of China National Electronics Import and Export Corporation (CEIEC) and Aerospace Long-March International Trade Co. Ltd. (ALIT) were tasked with constructing the Lotus Tower. The project has a long track record of controversy but still managed to continue, largely under the radar.
For starters, the Lotus Tower was an unsolicited proposal, which was placed before the former Government and received Cabinet approval in 2010. It is questionable why the former Government failed to conduct a feasibility study and follow due process in deciding whether this was the best way to use up $ 104.3 million as a loan from the China Exim Bank, especially given that Sri Lanka will now have to fork out Rs. 2.4 billion per year for the next 10 years to repay the loan, according to the President.
Unfortunately, matters do not appear to have improved significantly under the present Government. President Sirisena during the opening said that due to the disappearance of ALIT from Sri Lanka the Government was unable to recover the advance payment and to add insult to injury the China Exim Bank decided to trim the loan it had initially pledged, leaving the Government still needing Rs. 3 billion to complete the project.
Some of these details are not new. Earlier this year the Auditor General (AG) releasing a report gave details of how the entire project was mismanaged from the start and how funds were wasted and deadlines missed repeatedly driving up costs even higher. The AG said as a result of the construction work not being done on the due date, the agreed charge that had to be paid for not utilising the loan for the period from 19 August to 27 October 2017 alone had been $ 322,984. There were also issues of land ownership and the Telecommunications Regulatory Commission (TRC) not being mandated to have a public company under its authority to run the Lotus Tower.
It is concerning that President Sirisena, who has the TRC under his purview, took no action to order an investigation into these issues even after the Auditor General’s report. This also suggests that despite repeated pledges to wipe out corruption, intent remains far removed from the words. In addition Sri Lankan politicians are also well known for keeping “files” of information on their colleagues so they can be whipped out when needed as political bargaining points.
With Presidential Elections round the corner and the President’s party engaged in coalition talks with Opposition Leader Mahinda Rajapaksa’s Sri Lanka Podujana Peramuna (SLPP), it would appear that the Lotus Tower has gotten caught in political crosshairs. Sadly the casualty in this instance, as in many others, is public interest and accountability.