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Thursday, 17 December 2020 04:26 - - {{hitsCtrl.values.hits}}
The MCC grant attracted much controversy, partly due to the proposal of establishing a land bank
By Chandani Kirinde
The Millennium Challenge Corporation (MCC) has withdrawn its $ 480 million compact offer to Sri Lanka.
The decision was taken at the meeting of the Board of Directors of MCC held on Tuesday, the Daily FT learns.
The US Embassy in Colombo did not comment on the decision of the MCC Board but said an official statement was due this morning.
The Government said in February this year that it had decided not to sign the agreement with the MCC after taking into consideration the recommendations of a four-member Committee that studied it and found some of its features threatened national security as well as the social and economic welfare of Sri Lanka.
The committee headed by Professor Lalithasiri Gunaruwan was appointed after the election of President Gotabaya Rajapaksa and tasked with studying the agreement and making recommendations to the Government on how to proceed with it.
Prior to that the new Government also put on hold a Cabinet decision taken by the previous administration on 29 October 2019 to sign the MCC compact agreement. The MCC compact was one of the hotly-debated issues during the last Presidential Election, with the SLPP staunchly opposing it.
The Board of Directors of the MCC approved the five-year, $ 480 million compact with the Government of Sri Lanka in April 2019. Its funding was to assist to overcome inadequate transport logistics infrastructure and planning and lack of access to land for agriculture, the services sector, and industrial investors.
The MCC Board first selected Sri Lanka as being eligible to develop a compact in December 2016 but it has been met with suspicion from the start, mainly fuelled by politicians aligned to the ruling party.
