PM and his party leaders lead onslaught on ‘Joint Oppostion’ and its protests; Sirisena gives top priority for legal action against Rajapaksa family Compromise reached on controversial Port City Project; No compensation for Chinese company, but lots of other concessions By Our Political Editor Even before the ‘Joint Opposition’ protest march from Kandy ended in [...]


As SLFP crisis deepens, UNP comes to the President’s rescue


  • PM and his party leaders lead onslaught on ‘Joint Oppostion’ and its protests; Sirisena gives top priority for legal action against Rajapaksa family
  • Compromise reached on controversial Port City Project; No compensation for Chinese company, but lots of other concessions

The 'Joint Opposition's controversial protest march was to end tomorrow with a big rally at Hyde Park, but the organisers have been informed that though they have booked the park, it cannot be made availbale because the park is being dug up for renovation. Pic by Athula Devapriya

By Our Political Editor
Even before the ‘Joint Opposition’ protest march from Kandy ended in Colombo, their actions appear to resonate in the higher echelons of the Government. At the weekly ministerial meeting last Tuesday, President Maithripala Sirisena reiterated that tough action would be taken against members of the Rajapaksa family for their alleged wrongdoings. The delays, he said, had been misconstrued. It was only for reasons of good governance since investigations had to be carried out according to proper procedures. That was by no means a weakness, he said.

The President was re-iterating the remarks he made at the previous week’s ministerial meeting (July 20). As exclusively revealed in these columns, Sirisena was bitterly critical of Rajapaksa who, he said, was trying to set the agenda for the Government. He was alluding to the protest march and declared then that action against Rajapaksa and members of the family would have to be expedited. The issue is still uppermost in his mind. At a ceremony held at the auditorium of the Mawanella Provincial Council on Friday to distribute computers, he said, “If the former leaders had performed their duties and governed properly, there would not be a need for them to undertake long marches for political purposes, hurting their feet.” He added, “Though some people greedy for power walk through roads aimlessly, the Government is committed to build the country by working with consciousness and discipline.”

It fell on the United National Party (UNP), one of the main partners in the Government, to counter if not stop the march altogether. That was as much for its sake as it was for its Sri Lanka Freedom Party (SLFP) partner. Not surprisingly, when this march was to cut through the political domains of two frontline UNP ministers — General Secretary Kabir Hashim (Kegalle District) and House Leader Lakshman Kiriella (Kandy District). They came up with a legal strategy to stall this first major political ‘offensive’ by the ‘Joint Opposition’. The 116 kilometre (72 mile) march would have to pass through the areas of jurisdiction of five different magistrate’s courts – Kandy, Kegalle, Attanagalla, Mahara and Colombo.

The Kandy Magistrate noticed parliamentarians Dinouk Amunugama, Keheliya Rambukwella, Lohan Ratwatte and Mahindananda Aluthgamage. He ruled that the march could not start from the Kandy town limits and added that individually persons could, however, pay their respects at Sri Dalada Maligawa. The Police had said they feared a breach of the peace since the UNP was also launching a membership drive that day. In addition, they pointed out, the first cricket test between Sri Lanka and Australia was being played at Pallekele. Former President Mahinda Rajapaksa, known for his street fighting attributes, declared he would respect the court ruling but the march should start from outside the Kandy town limits. Thus, it had to begin from Getambe on the outskirts of the town, barely a kilometre from Peradeniya.

Unlike the SLFP protest march to Kataragama (179 miles or 288 kilometres) which Rajapaksa headed on March 16, 1992, the former President, who turns 72 this year was not his brisk self. He walked some distance and later boarded a Defender Jeep. He stood on the suspended door and waved to the public along the route. On Friday, Rajapaksa boarded a private helicopter from Mawanella to fly to Anuradhapura where he had lined up previous engagements. He was due to return and join the march yesterday.

Cashing in on growing public discontent over the rising cost of living and related issues is the main cause for the march according to the ‘Joint Opposition’. There were also fears within the pro-Sirisena SLFP that an attempt was being made by Rajapaksa and his allies to capture power in the party by mustering public support — a message to pro-Sirisena loyalists in the SLFP that there was a wave in their opponent’s favour. Some 40 SLFP MPs backing Rajapaksa took part when the march began. The previous night they were entertained to a lavish dinner at the residence of former minister Keheliya Rambukwella. A band played whilst cocktails were served. ‘Joint Opposition’ leader Dinesh Gunawardena and former Western Province Chief Minister Prasanna Ranatunga gave those present a briefing on what they should do the next day. It transpired that during different days of the march, different groups from the districts were told to take part. Transport for them has been provided together with food. Accommodation was in different temples. On the first day supporters from the districts of Matale, Kandy and Nuwara Eliya took part. The second day saw those from Kurunegala and Kegalle. This is in addition to groups who chose to march throughout the route.

An application to the Mawanella Magistrate to seek a ban on the march was rejected. The Magistrate asked why he should stop a march when there had been no incidents the previous day. A similar application was also rejected by the Kegalle Magistrate. This enabled the march to proceed up to Nittambuwa by Friday night. This was after the night stops were changed. The Warakapola Magistrate on Friday refused to issue a restraining order to stop the march from travelling through the Warakapola town. The request for the order was made by the Warakapola Police.

Also on Friday, the Gampaha Magistrate ordered that the march should be restricted to the left side of the road from Kalagedihena to Kiriillawela. The Magistrate made the order after the Gampaha Police sought a restraining order saying the march could disrupt law and order in the area as the UNP‘s membership drive programme was also being held while a protest was being organised by the residents of Rathupaswela. Colombo’s Additional Magistrate on Friday refused to issue a restraining order to prevent the march from Kiribathgoda to Colombo. The request to issue the restraining order was made by the Peliyagoda Police.

The march moved from Nittambuwa to Kiribathgoda yesterday. The Pada Yatra participants are expected to march through tomorrow to Colombo. The ‘Joint Opposition’ planned to hold a rally at Hyde Park grounds. However, parliamentarian Vasudeva Nanayakkara, who booked the venue, was informed on Friday by the Kompannaveediya Police that the park would not be available since ground repair work was going on. The organisers are now on the lookout for another venue. Details of how the march wound its way so far appear elsewhere in today’s Sunday Times.

The march, without doubt, has placed the UNP on an unusually aggressive mood. Since assuming office in January, last year, party leaders have been maintaining a low-key approach on pro-Mahinda SLFPers. Their remarks on the allegations of bribery, corruption and misdeeds of the previous administration now under investigation were cursory and limited to a few of the frontliners. The march has changed it all. Minister Kiriella told the Sunday Times, “The so-called “protest march” by the ‘Joint Opposition’ is just a show by a bunch of crooks, rogues, murderers and corrupt politicians who are so desperate to come to power to rob the country once again. What they are trying to achieve from this kind of show is to pressurise the Government. They are trying to show that they are coming back to power and trying to intimidate the Government officers in various agencies investigating the corruption charges against them. We could have taken action directly for violating the court order. They started the protest at Getambe which is within the Kandy Municipal limits. Police were given full freedom to implement the law and order without causing any hindrance to the public.

“We are very much thankful to the Kandy magistrate for not allowing these crooks to start their protest at Dalada Maligawa or within the holy city premises. In the past they did not listen to the advice of Mahanayake Theras of Malwatta and Asgiriya chapters but brought alcohol, women and various illegal things to the holy city. We can’t call it a ‘Pada Yatra’ as the main person (Mahinda Rajapaksa) was travelling in a Jeep.”

On Friday, Sagala Ratnayake (UNP – Matara District), Minister of Law and Order and Southern Development, expressed similar sentiments. He was quoted in the media as saying that the protest march was a “political gimmick by crooks.” Comments from the Sirisena-led SLFP were more subdued. Senior SLFPer Lakshman Yapa Abeywardena, told the Sunday Times, “This protest march was organised to meet the needs of a handful. Our party members will give them the correct response at the right time. How can they justify a protest in so short a time after the Government came to power? They should give more time to the Government. Their actions will have no impact on the SLFP.”

‘Joint Opposition’ leader Dinesh Gunawardena said, “The UNP is so worried about our protest march that it has become the judge and the jury. It has already passed judgement on who is a crook and who is not. It should look inside. If this is a democracy, as claimed, what is wrong in us having a peaceful protest?”

He told the Sunday Times the Government had through its attempts to stifle the march made clear that it was frightened. “Otherwise why dig the Hyde Park ground which has already been booked by one of our members? They tell the world that they have restored democracy and media freedom but do just the opposite. The Government’s conduct is shameful. This is by no means good governance.”

For President Sirisena and his ministers the protest march and the political issues arising from it were not the only challenge this week. There were more significant economic issues. One in particular is the resumption of the Port City Development Project. Prime Minister Ranil Wickremesinghe had presented three different memoranda related to the project which the Government wants resumed from possibly October this year.

One relates to the withdrawal of compensation claims by the CHEC Port City Colombo (Pvt.) Ltd., the project company. The company’s claims, which kept mounting, were because of what the project company calls the suspension of its project in March 2015. Among the reasons the company has given is staff retrenchment costs, termination costs of contractors, overhead costs, equipment idling costs, remobilisation costs, losses due to price fluctuation, financial charges by banks, losses from rupee depreciation, loss of material from the landfill and costs relating to resumption of work. Compensation claims made on March 23, 2016 placed the losses at around US$ 144 million or Rs. 20 billion.

It may be recalled that during both the presidential and parliamentary election campaign, the Port City Project came in for bitter criticism by the UNP. Several of its leaders threatened to shut down the project. However, since assuming office the Government realised that such a closure would compel it to meet contractual obligations including a spiralling amount as compensation.

Premier Wickremesinghe appointed a Committee of ministry secretaries and requested the Project Company to propose alternative ways in which any financial loss suffered during the suspension period could be addressed as an alternative to calls for compensation. “The Project Company was also informed to consider the goodwill generated following official visits to China by the President and the Prime Minister. They had responded and come with the following proposals to the Secretary to the Prime Minister as an alternative to pursuing compensation claims,” it was pointed out to ministers.

The ministers have agreed that three such proposals should be accepted by the Government. Premier Wickremesinghe has said they are “reasonable.” The proposals are:

Making minor amendments to the Master Plan to create more Marketable Land of approximately 5.1 hectares without increasing the size of the reclamation area of 269 hectares referred to in the Development Permit of March 8, 2016 and without reducing the minimum land entitlement of GOSL (Government of Sri Lanka) of 62 hectares. This is to be achieved by reducing the 96 hectares reserved as Public Lands by around five per cent to around 91 hectares, without compromising the safety and quality of road and other infrastructure within the Port City. This is reasonable considering that even after this minor reduction, the public lands to be created is approximately 28 hectares more than what was initially planned. This increase has been made to enhance the value and marketability of land to investors and create more facilities for the general public such as park areas amounting approximately 45 hectares.

In terms of the Concession Agreement, the 5.1 hectares of extra marketable land being created should be allocated between the Project Company and GOSL on a 60-40 basis. The Project Company has proposed that the entirety of the extra land be allocated to it, which is approximately 2 hectares over and above its current entitlement. This would enable to company to meet part of the above mentioned losses.

Schedule 14 of the Concession Agreement currently provides the Project Company the right to select 10 hectares out of the total area allocated to it first before GOSL selects 6 hectares. The Project Company has requested to increase this selection entitlement to 20 hectares without increasing the total land entitlement of the Project Company. As a result GOSL will select 6 hectares after the Project Company selects 20 hectares. Thereafter, the land allocation mechanism provided in Schedule 14 will continue. This is also intended to accelerate new developments such as the proposed Colombo International Financial Centre (CIFC) building on land allocated to the Project Company, which the Project Company (or related party) has indicated its willingness to invest in, subject to feasibility and agreeing on commercial terms with the GOSL. This is mutually beneficial as investment commitments could be secured early, while the land reclamation is progressing. This proposal would not impact on the quantum or timing of revenue to be generated by the GOSL on its own land. In another memorandum titled Port City Development Project – Policy, Administrative and Legal issues, Premier Wickremesinghe has referred to further discussions a Cabinet appointed Committee of Secretaries held with the CHEC Port City Colombo (Pvt) Ltd., the Project Company. This is on issues and concerns raised by the Attorney General and to find acceptable solutions. This had been followed up with discussions at the Prime Minister’s Office. The Attorney General had raised concerns over the Concession Agreement and the matter has now been referred to the Cabinet of Ministers.

The Attorney General has raised three legal issues in the proposed agreement on the Port City. They are:
1 The Tripartite Agreement shall be signed between the Government of Sri Lanka (GOSL) (represented by Secretary, Megapolis and Western Development), UDA and the Project Company. The obligations of the GOSL should be novated (meaning the substitution of a new contract in place of an old one) to the UDA or any other Government agency nominated by the GOSL upon completion of the reclamation work and the reclaimed land being declared as an “Urban Development Area” in terms of the UDA Act or any other relevant legislation.

2 In terms of applicable law, the AG has opined the UDA has no legal capacity to perform the obligations of GOSL under the Concession Agreement as its Agent until the reclaimed seabed area is declared as an Urban Development Area. The GOSL must therefore authorise the Secretary, Ministry of Megapolis and Western Development to carry out all obligations of the GOSL and to delegate necessary authority to a designated Project Director to be appointed by him. The Project Director so appointed shall have the authority to make the necessary applications to obtain permits, licenses and other relevant approvals on behalf of GOSL from the statutory bodies and agencies, in order to achieve timely implementation of the Project.

3 The reclaimed land is declared as a Development Area under the UDA Act or any other relevant legislation in several stages as the reclamation progresses, to fast-track new real estate investments in areas where reclamation work and related infrastructure have been completed.

4 In terms of the Concession Agreement, in the event of termination of the contract for default by the GOSL prior to the completion date as defined in the Concession Agreement, the GOSL has agreed to pay the project Company an amount equal to 200 % of the net project cost as at date of termination.

The Cabinet of Ministers have ratified the Attorney General’s view on these four matters. They have agreed that required changes would be made in the proposed Tripartite Agreement. They have also decided to start the Project with no further changes to be made to the agreement. Any change, they have decided, would be mutually agreed between the two parties with the Cabinet of Ministers briefed accordingly.

In a third memorandum, Premier Wickremesinghe has dealt with “Commercial Issues” – Port City Development Project. He has noted that the Attorney General has raised concerns over the Concession Agreement. Some of the significant points made by him:
= The Concession Agreement provides for the creation of an Estate Management Company (EMC), which is to be 100% owned by GOSL, to manage, maintain and repair the common areas of Port City by collecting management charges from investors on marketable lands. However, until such time the EMC is self-sustainable, GOSL would have to inject funds. The Project Company has agreed to establish and operate it. The Secretary to the Ministry of Megapolis and Western Development should continue discussions on establishing a partnership and obtain necessary funding from the Colombo Municipal Council, the Western Provincial Council and other relevant statutory agencies.

= The Concession Agreement limits developments GOSL could undertake on its land during the first six years (or three years from the completion of reclamation works) to activities relating to operations of the Port of Colombo and educational or cultural development within areas identified in the Development Master Plan. During recent negotiations, the Project Company has agreed to expand permitted hospitals and exhibition and convention centres.

In terms of the Concession Agreement, in the event of a change in law that creates a financial impact exceeding $ 2.5million in a calendar year, the GOSL is obliged to compensate the Project Company throughout the land lease period. The Project Company has said that this is an internationally accepted standard clause in investment agreements. However, the Project Company has agreed to limit this obligation of GOSL to 35 years.

The GOSL has undertaken not to permit any other seabed reclamation project greater than 20 hectares within a 20 kilometre radius of the Project (excluding public amenities such as parks, utilities, ports or port related activities) for 15 years from the date of execution on the Agreement, or date that the Project Company disposes its entire interest in land, or when the Project Company has earned sufficient revenue to satisfy its debt under the funding agreement, whichever is earlier.

The Cabinet of Ministers has decided that the Concession Agreement should be amended to incorporate these four recommendations made by the Attorney General. Other than the Port City Project, the Government is also going for more ventures with help from China. The Exim Bank of China has agreed to fund the proposed expressway from Colombo to Ratnapura. After the Exim Bank’s willingness, the Chinese Government has recommended the names of four of its companies so that the Government could pick one. The Government has decided that all four companies will get one segment of the project. The companies are China National Technical Import Export Corporation (CNTEC), China Aerotech Engineering Corporation (engineering arm of CATIC), China Harbour Engineering Corporation (CHEC) and Hunan Construction Engineering Group Corporation (HCEGC).

That protest campaigns against the Government by the Opposition are mounting when ambitious programmes, mostly with the help of China, are being launched. This is no doubt a cause for worry for the Government. In what is clearly a paradoxical situation, the UNP has taken up cudgels with the pro Mahinda Rajapaksa group over its protest march. Though the marchers were lampooning Sirisena through some unkind songs most of them were directing their invectives against the UNP and its leadership.
There are interestingly some unexpected political gains for Premier Wickremesinghe. That President Sirisena in particular and his group in general would have to now rely on him even more. It is his own ‘soldiers’ who are launching an onslaught. It is mostly they whom Sirisena would have to turn to if a crisis within his own party worsens. Even more importantly, this is with less support from the SLFP’s own ranks. That is the price for Sirisena’s inability to take full control of the SLFP, the party he ostensibly leads since being voted to office in January last year.

So much so, the Cabinet of Ministers will meet on Monday instead of Tuesday in the coming week. The reason – Premier Wickremesinghe is off to Indonesia for a conference on reconciliation. The fact that the meeting has been advanced for him to attend speaks a lot.

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