Business Times

Short-cut to development-2

We return to this issue because of growing concern over the short-cut, development path Sri Lanka is taking sans proper tender procedures and transparency. This week the Business Times is reporting the controversy over the proposed deal to hand over the prime, former Commercial Company property now owned by the Urban Development Authority (UDA), to a blue chip company.

It is reported that the deal is being pushed by a powerful government official despite opposition from other government quarters who are concerned that no tender procedures are being followed for what is seen as the showpiece property in the city of Colombo. Any company or developer securing this property has a huge advantage over others given its location, size (11 acres) and sitting right in the heart of the capital.

The site is being developed for a variety of business and leisure activities like malls, hotels, commercial establishments, etc.

It was only last week that we pointed out the dangers of the development path through deal-making, some of which have landed in court in the past like LMS, Water’s Edge and Sri Lanka Insurance because there was something fishy in the transactions.

We clearly pointed out the need for transparency, accountability and good governance in the mega development that the city of Colombo will see in coming years. There is a lot of good things happening under the UDA through the direction of Defence Secretary Gotabaya Rajapaksa in the development of Colombo where the focus will be to ‘green’ the city. However on the flip side there are also many negatives in terms of development without tenders and essentially through deal-making which policy planners would do well to avoid.

Of course corruption has become part and parcel of the Sri Lankan environment that nothing happens without a ‘santhosam’ – and nowadays it’s no small deal. The money is big-time.

More and more information has come to the Business Times of the wheeling-and-dealing type of business Sri Lanka is getting into, now that the war is over. Some corporates who have over many years been rock-solid in their integrity and governance in dealings with the government are expressing serious concern over the state of play now in terms of the mega development contracts.

“Everywhere you turn … money is changing hands,” said one corporate executive. In some of the biggest projects, the talk is about paying ‘this person’ and ‘that person’ or the ‘deal is off’.

Tender procedures are openly violated with a ‘who cares’ attitude. There is so much development in the pipeline and contracts to be offered that it is incumbent on the government to follow well established procedures for tenders and contract-approvals.

ARs and FRs (government regulations) shouldn’t be flouted. Tender procedures, as we suggested in the column, if necessary should be fast-tracked to save time as a slow bureaucracy can often kill the ‘goose that lays the golden egg’ but shouldn’t be abandoned altogether for the sake of expediency or favouritism.

Conflicts between powerful officials in the government are also coming to the fore in the development process and that’s not good for a government and President who believes in transparency and good governance. Corporate Sri Lanka (the good guys) are watching while foreign investors are also looking for clear guidelines in the development path, which may come in the budget.

Incidentally the rate of interest Sri Lanka is paying for huge loans from China for various projects is still not known as it appears to be a ‘state’ secret. This is where the proposed Right to Information or Freedom of Information bill needs to be enacted. This bill which has been on the table for many years and proposed by media and public interests is a political football kicked on all sides or from side to side. Even recently the opposition proposed its presentation only to be told by the government and such a bill is to be presented.

The public’s access to the way mega projects have been approved is sancrosanct through the principle of good governance and the constitutional right of the people. Clearly the Colombo Commercial property deal falls into this category. The government is the guardian of state resources on behalf of the people. Thus all transactions involving public resources must be transparent and available for public scrutiny. There is no argument about that. There shouldn’t be, under any administration, present or in the past.

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