CBK welcomes probe on Water’s Edge land sale

Former President Chandrika Bandaranaike Kumaratunga has welcomed the Supreme Court or 'any relevant body' examining the entire transaction behind the Water’s Edge Golf Club land sale. She has told the Supreme Court that her Cabinet approved the alienation of State land for a private golf course at Battaramulla on the advice of the then BOI (Board of Investment) and the Finance Ministry so as to attract foreign investment into the country.

Her response came in her submission to the court in a fundamental rights petition case where she has been accused of illegally transferring State land earmarked for a "public purpose" to a private golf club. Ms. Kumaratunga says her Government and the BOI were "searching for investment projects so that the economy would improve despite the on-going North East conflict".

She says that during the 1997-98 period, the country had suffered "terrible terrorist attacks" and that they had impacted on the investment climate and the economy as a whole. In that background, she says, the Government enhanced concessions and facilities accorded to investors on the basis of the sums of money invested, employment created, including other forms of indirect employment and economic benefits that the local community would receive with the implementation of major projects.

It was against this backdrop that the BOI received an application for a project to set up a golf course, she says."The said application was reviewed/appraised by the BOI and approved subject to the approval of the Cabinet as the proposal required the alienation of State land.

"The BOI, being an institution coming within the purview of the Ministry of Finance of which (she) was the Minister, forwarded the relevant documentation to the Ministry for the purpose, if found appropriate, presenting it to the Cabinet for approval,” she says.Ms. Kumaratunga says the BOI drew up lists of projects that would qualify for concessions, and among them were golf course projects, and that she was also advised that by that time the experience of the Digana Golf Club project had already begun attracting a large number of high spending, high net worth individuals visiting Kandy and the surrounding areas in the course of their golf tours.

She claims that it was the success of the Digana Golf Club project that the BOI recommended to the Cabinet that the Battaramulla golf club project should be approved. Surrounding the Victoria Golf Course at Digana, several luxury holiday homes were marketed to wealthy tourists generating much needed foreign revenue, with large extents of State land being alienated on long-term leases for the purpose of establishing the Digana golf course in Kandy, she points out.

The former President further states that the land now part of the Battaramulla golf course project, now known as the Waters Edge Golf Club, was originally acquired "prior to her being elected to office".

She says that as there were "serious allegations" regarding the alienation of State land during the tenure of office of the previous Government, her Government enunciated a policy by way of guidelines for such alienations, and that "to the best of her knowledge and belief" the allocation of land to the Battaramulla golf project was done in accordance with these guidelines.
Ms. Kumaratunga states that "to the best of her knowledge and belief" this project was also approved by the Urban Development Authority and the Tourist Board.

She says the usual practice in such matters was for the BOI to provide the content while this was evaluated by officials of the Finance Ministry and drafted by its senior officials, including the Secretary to the Treasury, in accordance with the relevant regulations and guidelines and submitted by them for her approval and signature.

Ms. Kumaratunga says she relied and acted on the advice and recommendation of the said officials. She says the project was never accorded any special privilege and was treated as a normal BOI project, and that she believes that "with this kind of delay this project had to undergo, changes would have been inevitable to the project proposal as originally conceived".

The former President also points out that in December 2001 the United National Party formed the Government, and the then Minister of Commerce and Consumer Affairs Ravi Karunanayake presented a Cabinet Paper dated 19 June, 2002 proposing that the allocation of this land be cancelled, and that she had welcomed a decision to appoint a committee to go into this transaction, but that the same Minister later withdrew the Cabinet paper and decision, without any reason, and that she protested this move.

Ms. Kumaratunga says that in her Cabinet Paper dated July 3, 2002, she had asked that the Minister's Cabinet Paper be re-submitted to the Cabinet, that a Committee of Officers proposed by the Finance Ministry be appointed, that the Secretary to the President or his nominee be appointed to that Committee, and a full report be submitted to the Cabinet by 31 July, 2002.

She says that when she learnt that the conditions stipulated for the project were being changed substantially, she submitted a Cabinet Paper dated July 28, 2004, moving that the Cabinet approve the termination of the agreement. It was after the Attorney General advised that the agreement could not be terminated that the Cabinet dropped the issue.

The former President says she is unaware of whether Rs. 150 million was paid to the shareholders of the company Asia Pacific Golf Courses Ltd., and that what the Club is today is not what she proposed in the original project submitted to the BOI, which formed the basis of the Cabinet Paper she had submitted as Minister of Finance.

Ms. Kumaratunga admits that the 5th Respondent in the case, Mr. Ronnie Peiris is a family friend of her children and herself, and that she is unaware whether he benefited financially from the said project or not. She says that she is unaware of what transpired before the Inland Revenue Department, but that had Mr. Peiris received an estimated Rs. 60 million from the transaction (sale of shares of Asia Pacific), it was after she proposed the cancellation of the project and therefore "cannot have any relevancy to her".

The former President says the case against her and others is mala fide, "with ulterior political motives to maliciously discredit her politically and personally".

Two retired Public Servants, Sugathapala Medis and Raja Senanayake have filed the Fundamental Rights petition stating that the former President was instrumental in illegally transferring State lands meant for a 'public purpose' to a private company to build a golf course near the Parliament Complex at Battaramulla and that she misled the Cabinet into believing that foreign investment was coming in for the project when in reality no golf course was built by those who obtain permission to do so by the Cabinet.

Instead, the petitioners claim, those shareholders of the company merely sold their shares for a sum exceeding Rs. 150 million to a third party and that Mr. Ronnie Peiris, a friend of Ms. Kumaratunga profited to the tune of Rs. 60 million by this transaction.