(Pushpa and Basil Rajapaksa)
by Nirmala Kannangara.
Commissions obtained from projects by the Rajapaksa family during their reign have been confirmed following the release of the Auditor General’s report on the Sri Lanka Ports Authority. The report dated March 1, 2016 under Ref. No. POS/A/SLPA/2016/04 states how Colombo International Container Terminals Limited, (CICT) the company that got the contract to build, operate and transfer (BOT) the terminals of the Colombo South Port had remitted Rs. 19.41 million to a ‘charity organisation’ well before they started their container handling operations.
This charity body is none other than the Pushpa Rajapaksa Foundation, and details have now come to light of how the funds obtained in the guise of ‘donations’ have allegedly been utilised only for personal expenses of the Chairperson of the foundation, Pushpa Rajapaksa, wife of former Economic Development Minister Basil Rajapaksa.
Through Hongkong and Shanghai Banking Corporation cheque No. 594691, CICT had remitted Rs. 19.41 million to Pushpa Rajapaksa Foundation (Peoples Bank Headquarter Branch account No. 204-1-001-5-0003290) on May 21, 2012, 14 months before the Colombo South terminal started their container handling operations.
Although this Chinese company has claimed they paid this large amount to the foundation in question for charity purposes, it has been revealed that this amount has been included in their accounts as part of the Colombo South Port Development Project expenditure.
Highly reliable SLPA sources, who wished to remain anonymous, told The Sunday Leader how a certain percentage of this ‘donation’ towards the Rajapaksa family will have to be paid back to CICT by the Ports Authority after the completion of the contract as per clause 62.3 of the agreement.
“According to Clause 62.3 of the BOT agreement, at the time CICT hands over the container handling operation to SLPA in 35 years or in the event the Government of Sri Lanka prematurely cancels the agreement, the Ports Authority has to pay a certain percentage of the money the Chinese company has invested in Colombo South port movable assets and on what they have spent to provide services for the terminal operations. Since the ‘donation’ towards Pushpa Rajapaksa Foundation too had been accounted as part of the Colombo South Port Development Project expenses, the SLPA has to re-pay a certain percentage of this money to CICT,” sources added.
The payment made to Pushpa Rajapaksa Foundation was confirmed by the Chief Financial Officer of CICT to the Director Finance, SLPA last year.
Director Finance, SLPA in a letter dated November 27, 2015 (Ref: FD/ FA/C/ 82-XV/ 17/ 2015) had requested CICT to provide details of the ‘donation’ they have made to Puhspa Rajapaksa Foundation on May 21, 2012 and whether they have accounted this money as part of the construction work of the Colombo South Port Project.
In reply, Chief Financial Officer of CICT in a letter dated November 27, 2015 to Director Finance, SLPA has confirmed this payment and also confirmed that this amount too had been accounted as part of the port development project expenses. The letter states:
‘The Director Finance,
Sri Lanka Ports Authority,
No. 19, Chaithya Road, Colombo 1.
Rs. 600 MN given to Pushpa Rajapaksa Foundation.
‘We write with reference to your letter FD/ FA/ C/ 82-XV/17/ 2015, dated November 27, 2015 and wish to clarify as follows. The amount indicated in the above letter is incorrect and the correct amount is LKR 19, 410,000 and this had accounted in construction in progress account in 2012. Copy of the above cheque and the payment voucher is attached herewith for your information.
Colombo International Container Terminals Limited, Chief Financial Officer’.
According to the sources, none of the SLPA employees were aware of this ‘donation’ and had never requested CICT to make any payment towards any charity.
“When international bids were called to offer the Colombo South Port contract, SLPA did not receive any bids. Hence the contract was offered to a Chinese company that was engaged in the Hambantota Port Project. It is this company that formed the CICT to construct the Colombo Port Southern Terminal and to fix the gantry cranes. It is alleged that it was the Rajapaksas that introduced this Chinese company for the Colombo South Port Project as the middlemen and had obtained the commission from the Chinese.
It was a known secret that the Rajapaksas obtained commissions from each project that was started during their time of rule. But in this instance, there is proof of how they obtained money. Although the Rajapaksas benefitted from this project, it is the general public that has to pay for it,” sources claimed. Speaking further, the SLPA sources accused the former Chairman Ports Authority, Priyath Bandu Wickrema for aiding and abetting the CICT to ‘donate’ the said funds to Pushpa Rajapaksa Foundation and added that it is up to the Financial Crimes Investigation Division (FCID) and the Bribery Commission to take action against all those involved in this scam.
“The Auditor General’s report, which was released on March 1, 2016, has comprehensively given details how this Rs. 19.41 million had been remitted to the Pushpa Rajapaksa Foundation. Based on this report, the two law enforcing departments can swiftly take action but although the FCID and Bribery Commission have already gathered evidence and questioned certain parties on this scam, nothing has been done,” sources added.
The sources further accused the Rajapaksa administration of giving the contract to construct the South Port terminal to CICT and transfer the container handling process to SLPA only after 35 years when this project could have been given to SLPA in order to generate more income for the country.
“The most difficult task in the port expansion project is the construction of the breakwater.
This contract was offered to a Korean company with an investment of Rs. 85,000 million from a loan obtained from the Asian Development Bank (ADB). After the construction of the breakwater, there was no necessity for the Ports Authority to give the contract to build the south port terminal and to install the gantry cranes to CICT but could have been done by them. Although Priyath Bandu Wickrema and a few of his loyalists in the SLPA Director Board, treasury representatives and the Attorney General’s representatives who were involved in the dialogues to hand over the terminal construction and build, operate and transfer the work to SLPA only after 35 years, the treasury representatives should have interfered and showed them what losses the country would suffer if this project was given for a 35-year period.
By the time CICT completes 35 years and hands the container operation service to the SLPA, the gantry cranes would be needed to be replaced. In such an event the SLPA will have to once again invest heavily to get new gantry cranes installed. There again our politicians could once again give it to a foreign company to invest and operate the container handling work and Sri Lanka would never be able to prosper,” sources claimed.
According to the sources, a 15 per cent share of this Colombo South port project is owned by the SLPA and most of the larger ships that come to the Colombo Port enter the CICT terminal because of its depth.
“The SLPA terminals cannot accommodate the larger vessels as its depth is much lesser than that of the CICT. Hence most of the larger vessels enter CICT terminal and SLPA gets an income of US$ 4 from each container as royalty. The income generated through this royalty is not even sufficient to pay the loan interest. Had this project been given to SLPA instead of to the CICTL, we would have by now settled the loan with the huge income generated from the south terminal,” sources said.
The sources further accused a VVIP in the good governance government of a recent claim that the east terminal too should be given to a foreign company instead of providing the necessary funds to construct the terminal and install the gantry cranes. “Although people voted this government into power seeking relief, only the faces changed but the same old method is still continuing. Why cannot this government provide enough funds for the east terminal project and settle the loan and the interest within a few years and then generate massive revenue like the CICT is now generating,” sources added.
Although a message was left with the Media Secretary to Ports and Shipping Minister Arjuna Ranatunga seeking a comment either from the Minister or Chairman, SLPA, Dhammika Ranatunga, neither the Minister nor the Chairman responded.