Will MCC Compact grant be another bus missed by Sri Lanka?
Verité’s Nishan de Mel says MCC grant presents greatest opportunity for SL to transform neglected public transport sector
Under proposed MCC Compact US $ 350 million to be allocated for transport projects Former diplomat Kohona says Compact would allow US citizens to be employed in SL with immunity
“There will be only two US citizens to oversee implementation of programme” MCC Country Director responds
LKI Executive Director Wignaraja points out SL’S infrastructure quality is well below uppermiddle income country
The proposed US$ 480 million Millennium Challenge Corporation (MCC) grant presents the greatest opportunity for Sri Lanka to transform her neglected public transport sector since independence, according to a leading economist in the country.
“We have the opportunity to make the biggest revolution in public transport for this country since independence, and we have free money to do it,” Verité Research Executive Director Dr. Nishan de Mel said.
He shared these views at a public discussion held under the theme ‘Separating the Baby from the Bathwater: Evaluating
the Millennium Challenge Corporation-sri Lanka Compact’, organized by the Pathfinder Foundation at BMICH last Friday.
Under the proposed MCC Compact agreement with Sri Lanka, US$ 350 million is to be allocated for transport projects, which include advanced traffic management system activity, bus transport service modernisation activity and central ring road network activity.
De Mel pointed out that politicians do not have sufficient appetite to invest in soft infrastructure compared to hard infrastructure, which has led to an increase in congestion as the public transport system remain outdated.
“We have governments that kept building roads and kept adding to the congestion. Therefore, we need an external party with a high level of interest in supporting something that can be a positive transformation,” he added.
According to a study carried out by the University of Moratuwa, 1.9 million trips are made per day along the main corridors connecting Colombo and its suburbs, which is projected to increase up to 4.5 million trips a day by 2035.
The economic cost of lost time as a result of longer commutes was estimated at Rs.400 billion per annum in 2014 and was projected to increase up to Rs.1.8 trillion in 2020.
De Mel, however, warned that the proposed Compact risk becoming yet another missed opportunity for Sri Lanka to transform her public transportation sector while increasing connectivity to agricultural centres.
“Sri Lanka never misses an opportunity to miss an opportunity. Raising questions that are speculative and feeding into existing prejudices is part of how we found ways to missed opportunities in this country consistently. When MCC gives money we can’t create a false equivalent with that and thedefence agreements we have,” he elaborated.
Joining the discussion, former Permanent Representative of Sri Lanka to the UN and Secretary to the Foreign Affairs Ministry, Dr. Palitha Kohona claimed that the proposed Compact would allow US citizens to be employed in Sri Lanka with immunity.
Dismissing the concerns raised by Dr. Kohona, MCC Resident Country Director for Sri Lanka Jenner Edelman stressed the designing and implementation of the compact is entirely driven by Sri Lankans.
“The country ownership is really important to us. The programme is developed by the government with extensive consultations with the private sector and civil society, and it is implemented by a team of Sri Lankans.
There will be only two US citizens including myself to oversee the implementation of the programme. Therefore, it will be Sri Lankans who will be responsible for the success of the programme,” she stressed.
She noted that 60-65 Sri Lankans will be hired to oversee the day-today implementation of the programme.
While welcoming the proposed projects in transport sector, Lakshman Kadirgamar Institute, Executive Director Dr. Ganeshan Wignaraja noted that Sri Lanka would need US $36 billion to fulfil the Infrastructure requirements of the population over a sustained period of time.
“Sri Lanka’s infrastructure quality is well below of an upper-middle income country. We are at 65 out of 145 countries in the WEF’S infrastructure quality index, which is not very good. Our road quality in this index is worse than a low-income country such as Pakistan,” he said. However, he opined that the proposed Compact has room for improvements while noting that agriculture should have been a priority area in the Compact instead of land projects.
The proposed Compact plans to spend US$ 67.3 million in activities related to land seeking to improve access to private and State land, provide more uniform valuation and assist the government in improving the land policy and governance framework under which land is managed and administered.
While agreeing that the proposed Compact has room to improve, Dr. De Mel hopes the proposed projects will be improved when Environmental Impact Assessments (EIAS) and other studies are conducted on the projects to meet regulatory requirements.
However, Dr. Kohona painted a pessimistic image of MCC alleging that it could be utilised as a tool to pursue different objectives of the US government which might be political.
De Mel urged experts and professionals prioritise the value to the country from such projects instead of focusing on political affiliations.
He noted that there is a 69.5 percent increase in interest paid by Sri Lanka on past borrowings.
According to Dr. Wignaraja, Sri Lanka will save approximately US$ 651.5 million through the MCC grant, which otherwise have to be borrowed and repaid with an interest.