Friday, 21 February 2014 04:22
Criticises plan to sell land to Chinese company, says prices will fall
Claims project is not FDI as Govt. will guarantee loan from EXIM bank
Alleges transactions questionable as company banned by World Bank in 2009, suspicious deals in 7 countries
By Uditha Jayasinghe
Pinpointing a shocking aberration from good governance UNP MP Dr. Harsha de Silva yesterday laid bare what he termed a “dump and pump” scheme of the Government concerning the proposed US$ 1.4 billion port city project, which is to be developed with a Chinese company banned by the World Bank.
De Silva termed the project “Colombo’s largest land scam” and insisted the project would do harm to the Sri Lankan economy and by extent the people on several points. He charged that the continental shelf to be utilised for the project under international law belonged to the country and that despite previous statements made by President Mahinda Rajapaksa, the Government was planning on selling it outright to a corrupt foreign company.
The Government hopes the construction of a port city along the iconic shoreline of capital Colombo with Chinese input will attract US$20-25 billion of foreign investment. Phase I of the land filling project is expected to start in the next few months and will likely to be completed in 24 months while the project itself will be completed within 39 months.
China Commu-nications Construction Company (CCCC) has come forward to invest in the land filling process and will acquire 170 hectares from the total 233 hectare land area. According to the Cabinet paper approved in November the Sri Lankan Government will receive the remaining acres, which will be up for sale for commercial or recreational purposes.
“Nonetheless the Cabinet paper clearly states 20 hectares of land will be given on free hold terms to the CCCC, which is selling land outright to foreigners. Something the President himself has publicly claimed he would never do. The remaining 170 hectares will be given on a 99-year lease that is almost the same as selling.”
Earmarked as the single largest investment project in Sri Lanka, the port city is expected to also have Sri Lanka’s first 100-storeyed skyscraper under Phase II of its work. This phase would include the construction of hotels, high rise buildings, recreational facilities, a shopping complex and a golf course as well as a F1 track.
However, de Silva pointed out the land which would take only Rs. 1.8 million to develop has been given a base price of Rs.8 million when sold. He went onto say that since the company nor the Government are legally required to stick to the base price they have the freedom to sell the reclaimed land at whatever price they wish.
“This will bring down the land value drastically in Colombo and its suburbs. A perch of land in Fort is now about Rs.12 million but this cannot be maintained when there is cheaper land available. Average people with land as assets will find their value decreasing overnight. The Government can then buy up land cheaply in these areas or allow their cronies to do so,” he accused.
CCCC in the agreement has also stipulated the Government cannot reclaim land within a 20km radius of the port city. Moreover, the bulk of the funding for the project will not be coming in foreign investment but rather through a loan from the EXIM Bank of China given to the CCCC that will be guaranteed by the Government of Sri Lanka.
Challenging the government to prove him wrong Dr. de Silva emphasised that CCCC subsidiary company China Harbour Engineering Company (CHHC) has been banned by the World Bank in 2009 and after being caught in a string of corruption scandals involving the Philippines, Malaysia, Bangladesh, Jamaica, Guyana, Papua New Guinea and Uganda. The ban will only be lifted in 2017.
CHHC has been found guilty of artificially increasing prices of roads built in the Philippines as well as fraud while undertaking a 23 km bridge project in Malaysia where they were tried in court. An official they bribed with US$ 1.8 million while building the Chittagong harbour in Bangladesh was sent to prison. Financial discrepancies have also popped up in a US$ 400m highway in Jamaica, US$ 150 million airport in Guyana and most recently accusations of corruption have begun emanating from a US$ 350 road in Uganda.
“This is the country the Government has picked. This company built the Hambantota harbour and has now been given its extension, they built the Mattala Airport and in September was given a US$ 100 m deal to expand it, they built the Southern Expressway from Pinnaduwa to Matara and have now been given the last section up to Hambantota. This is also the company that was given the Colombo South Harbour Extension Project. Most of these ventures were given after 2009 so the Government knew full well this was a banned company,” he explained.
He added that the UNP had taken the company in good faith and was unaware of how deep the issues ran until a day ago. “We will do everything that we can to stop this sweetheart deal. We will consult with our lawyers. We will stage this fight in Parliament, the Courts and outside. When a UNP Government comes into power we will cancel all these odious deals, including the unfair, corrupt loans taken.”
Cabinet Spokesman and Media Minister Keheliya Rambukwella dismissed the claims as “statements,” quipping that a “UNP Government will not happen during our lifetime”.
Casino links explained
In a spin-off statement, UNP MP Harsha de Silva questioned how JHU member Udaya Gammanpila could not be aware of Defence Ministry Secretary Gotabaya Rajapaksa’s link to casinos as they were being built on Urban Development Authority (UDA) land.
Questioning who was giving Aussie gaming mogul James Packer and Rank Holdings land to build a mixed development project, Dr. de Silva quoted from website postings on the companies that still detail the opening of a casino even though the Government has insisted the provision was removed from the gazette notification.
Claiming he would speak on the issue at a future point, he recalled that Packer’s casino had to change its design on the order of Rajapaksa as well.