Colombo and Washington were locked in a controversy yesterday over claims that Sri Lanka had obtained ten million US dollars as a prelude to the US$ 480 million Millennium Challenge Compact deal. The Presidential Secretariat, in a statement on Thursday on the report of the Experts Committee, declared that “although US dollars 7.4 million and [...]

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MCC deal: Uncertainty over payment of US$ 10 million

Experts committee chairman says issue not mentioned in report but development is 'curious'
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Colombo and Washington were locked in a controversy yesterday over claims that Sri Lanka had obtained ten million US dollars as a prelude to the US$ 480 million Millennium Challenge Compact deal.

The Presidential Secretariat, in a statement on Thursday on the report of the Experts Committee, declared that “although US dollars 7.4 million and US dollars 2.6 million had been granted under the two stages, no account details are to be found anywhere.” The President’s Office was quoting from the final report of the Experts Committee that carried out a six month study on the compact, which is now increasingly unlikely to be accepted.

However, the United States Embassy strongly denied the claim that there was funding. “No MCC funds were ever transferred under the current US$ 480 million grant. Funds for preparatory activities have been cancelled or indefinitely postponed pending the government’s decision whether to proceed with the grant,” a spokesperson said.

Reacting to these remarks, Experts Committee Chairman Prof. Lalithsiri Gunaruwan told the Sunday Times, “We have not mentioned in our report whether the grant money came or not.” Pointing out “we do not know either way,” he said in the process of examining the compact, “we came across two preparatory agreements which were signed in 2017 and 2018.” Insisting that he was not pointing fingers at anyone, Prof. Gunaruwan added that “this development is curious.”

Commenting on the developments, Foreign Relations Minister Dinesh Gunawardena told the Sunday Times that he had asked his ministry officials to give him a full report on the matter. Until then, he said he would not be in a position to clearly state what the exact position was. “I have been told there are no documents but I have sought a full report,” he declared.

Other sources said it was not clear whether the Expert Committee had obtained details of the preparatory agreements from the External Resources Division of the Finance Ministry.

The two-fold MCC compact seeks to assist the Sri Lanka government to improve inadequate transport logistics infrastructure and planning. The other is a land project for agriculture, the services sector and industrial investors.

Prime Minister Mahinda Rajapaksa told the Sunday Times that he would place the final report of the committee before the Cabinet next week. It is not immediately clear whether a decision on the matter would be made thereafter or time would be given for ministers to study the report.

The decision of whether or not to accept the US$ 480 million dollar grant from the people of the United States rests with the Government of Sri Lanka, a US Embassy spokesperson said yesterday.

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