Ice Commission likely racketeers
Central Bank bond issue also to be included Ravi proposes legislation for foreign money to be brought back, but no concessions for secret account holders
“19. In order to make this model more beneficial, the jurisdiction of the proposed Tribunal and scope of the matters which falls within the jurisdiction of these Tribunals need to be expanded to include inquiry into breaches of civil and commercial law obligations and provision of appropriate relief including imposition of monetary damages, recovery of illegal proceeds and restitution and compensation.”
Bipartisan support
Among ministers who have signed the Joint Cabinet Memorandum besides Sarath Amunugama are: W.D.J. Seneviratne, Patali Champika Ranawaka, Rajitha Senaratne, Mahinda Amaraweera, Susil Premajayantha, Kabir Hashim (who is also General Secretary of the UNP), Ranjith Madduma Bandara, Talatha Athukorale, Faiszer Musthapha, Chandrani Bandara, Field Marshal Sarath Fonseka and Arjuna Ranatunga.
In the light of the bi-partisan character the Joint Cabinet Memorandum has assumed since both SLFP and UNP ministers have signed it, and with more due to sign, highly placed Government sources believe, it would receive the approval of the Cabinet of Ministers. These sources said fresh legislation would follow thereafter. Whether provision will then be made to include violators of exchange control laws is not immediately clear.
Bring money back to Sri Lanka
This, as our front page story today reveals, is in the wake of Finance Minister Ravi Karunanayake’s new plans to allow those holding funds in foreign banks, earned through ‘legitimate’ means, to bring them to Sri Lanka. However, he said, such a concession under proposed liberalised exchange control laws will not apply to those who have stacked moneys in foreign bank accounts and have been made through questionable means. They cover not only those held in Swiss Bank accounts but also in other safe havens by Sri Lankans after they had set up offshore companies in Panama. Details of the local account holders from a wealth of data exclusively made available to the Sunday Times from America’s International Consortium of Investigative Journalists (ICIJ) and Germany’s Suddeutsche Zeitung on offshore accounts set up with the help of Mossack Fonseka, a Panamanian firm, appear in a box story on this page.
The latest proposals by the group of ministers for a judicial mechanism to probe “frauds, corruption and misuse of funds” come during a twin phase. On the one hand, several cases of frauds, corruption and instances where public funds have been embezzled are still being probed. On the other, questions are being raised on some of the mega deals now being awarded by the Government prompting accusations of corruption within the new administration. The Joint Opposition has raised issue over some of these matters, particularly the Hambantota Port Project and the granting of 15,000 acres of land to a Chinese company for an industrial estate. The company in question plans to install its own power generating system to remain self-sufficient in electricity instead of depending on Sri Lanka’s national grid.
Colombo Port expansion deal
The Hambantota Port project has been wrapped up notwithstanding objections raised by Ports and Shipping Minister Arjuna Ranatunga – the minister in charge of the subject. The Sri Lanka Ports Authority (SLPA) refused to sign the agreement (on behalf of the Government) with China Merchants Port Holdings Company Limited, the Chinese firm that has been allowed a 99-year lease of the Hambantota Port. He had earlier raised objections on various grounds including “national security concerns.”
Now, Minister Ranatunga has cried foul again. This time he has raised issue over the Colombo Port Expansion Project, particularly the development of the East Container Terminal. In a three-page note to his colleagues, Minister Ranatunga has charged that “additional selection criteria” have been introduced for the selection of an investor and complained that this “criteria will create negative consequences in the whole bidding process.” The matter came up at Tuesday’s weekly ministerial meeting where a Minister, largely instrumental for the Hambantota Port Project, stayed away from the ministerial meeting when the subject was dis- cussed saying his brother represented a bidding local firm that had tied up with an Indian company.
Here is Minister Ranatunga’s note: “Cabinet of Ministers by considering the memorandum dated 06 February 2016 submitted by the Hon. Minister of Ports and Shipping on “Colombo Port Expansion Project – Development Options to the East Container Terminal” along with the observations of the Minister of Finance, granted approval to appoint ADB (Asian Development Bank) as the SLPA’s (Sri Lanka Ports Authority) Transaction Advisor and to invite Expression of Interest (EOI) / Request for Proposal (RFP) / Business Proposals from interested parties for the project.
“Accordingly, SLPA entered into an agreement with the ADB to obtain the transaction advisory services for the project. Estimated cost of the advisory services is US$ 5.6 million. ADB transaction advisory services are available for this procurement, since its inception until finalisation of a Concession Agreement.
“Pre-qualification process for the selection of an operator to develop East Container Terminal on BOT (Build, Operate and Transfer) basis was commenced with the Invitation for EOI (Expressions of Interest) on 06 June 2016. As per the Invitation for EOI document, criteria based on terminal operation, shipping and financial capabilities were stipulated.
“Subsequently, during the EOI process, as per the decision of the CCEM (Cabinet Committee on Economic Matters) dated 20 July 2016, an additional criterion was introduced to give weightage to a consortium, which includes a strategic investor from the region, having no less than a 20% shareholding in the consortium. According to the decision, this is to be considered at the RFP stage.
“Invitation for EOI was closed on 20 September 2016 and the received EOI applications are being evaluated by the CANC (Cabinet Appointed Negotiating Committee) with the assistance of the ADB.
“An open and competitive bidding procedure, agreed and advised by the ADB is also, adopted in this procurement. Therefore, evaluation of EOI applications should be done strictly in accordance with the criteria stipulated prior to closure of applications.
“CCEM at its meeting held on 23 November 2016 has instructed to adopt the following criteria when selecting an investor for the project. No Government entities should be allowed to compete. Regional competitors also should not be allowed. The operators who are already engaged in Colombo Port should have experience in Terminal Operations and the other company also should have wide experience in Port Management. “Pre-qualification of the project is already completed and new selection criterion cannot be introduced during the evaluation process. Any amendment or introduction of new criteria after the closing of applications is most ill- advised and leaves room for an affected party to seek relief in a court of law and lead to delay in procurement of a BOI concession.
“It is apparent that a number of applicants who have submitted EOI applications would be disqualified under the new criteria, and may even lead to a situation of disqualifying all applicants. In the event a sole applicant is allowed to remain in the process of bidding, it may damage the image of the government and other applicants may claim that the Government’s new criterion is especially designed to target a specific applicant. Moreover legality of the procurement process could be challenged even if one qualified applicant is disqualified consequent to the new criteria introduced.
“Therefore, it may be required to cancel the existing process and recommence the entire pre-qualification process if new criteria are to be introduced.
“The delay in the process of selecting an operator for ECT will cause serious impact while the market share of the Port of Colombo may also lose as the regional ports are in the process of expanding facilities.
“In the circumstances, through this Cabinet Note, I would like to enlighten the Cabinet of Ministers that additional selection criteria would create negative consequences in the whole bidding process of ECT.”
Minister Ranatunga’s note to his cabinet colleagues highlights a number of serious shortcomings. The most important is the lack of transparency and the resultant embarrassment to the very minister in charge of the subject. Sadly there is no mechanism to ensure checks and balances on such instances.
With barely two weeks to go for the dawn of 2017, the Sirisena-Wickremesinghe Government faces some serious challenges. Concerns expressed by a group of Ministers who are seeking tough action against “frauds, corruption and misuse of funds” underscore a serious situation. There is little doubt that remedial action would not only contribute to stability but also to greater public confidence.