Separate funding for Megapolis Project raises concerns from Treasury

The Sri Lankan Government is planning to set up a separate fund to implement the Western Region Megapolis Project ( WRMP) with a gigantic investment of US$44 billion, not without problems however.

The Ministry of Finance is raising concerns over the issue citing the practice of all funds for government projects coming from and being managed by the Treasury.

There was only one instance in the past where a project deviated from this practice and that was the Akuregoda Defence headquarter’s building project fund set up with finances collected through CATIC and Shangri-La deals and managed by the Defence Ministry during the previous regime. That project has raised many issues which are being probed by the present administration.

A top official of the Megapolis and Western Development Ministry said the aim for a separate fund is to quicken the cash disbursement process in the implementation of 10 mega projects and 200 smaller projects, including the controversial Chinese-funded Colombo Port City development,

At present, big infrastructure projects are treated equally with other projects under the annual development programme of the government budget especially in the process of fund disbursement, he said.

The Cabinet Committee on Economic Management (CCEM) was of the view that there has to be a separate account and fund for the massive sum of money running up to billions of rupees to be handled under the WRMP.

The Finance Ministry’s concern was raised at the CCEM meeting recently but it has agreed to iron out bottlenecks in the setting up of this fund in consultation with the Megapolis and Western Development Ministry.

Its Minister Patali Champika Ranawaka told the Business Times that the WRMP plan would be funded by the Government of Sri Lanka, private sector, foreign governments and foreign investors as well as the Asian Development Bank and other international funding agencies.

Touting it as a “flagship project,” the government aims to merge the Colombo, Gampaha and Kaluthara districts and create a cluster of towns and cities with new infrastructure to attract foreign investment.

A Treasury official said that operating an account outside the purview of the Finance Ministry will result on Treasury losing control over the financial transactions of the Megapolis Project.

Managing such a massive fund without the control of the Treasury could also lead to corruption and irregularities, he warned.