The government is to seek parliamentary approval to enact the US $480 million Millennium Challenge Corporation (MCC) Compact agreement and the Programme Implementation Agreement, which were drafted with the consent of theAttorney General, according to the Finance Ministry.
“The Compact Agreement and the Programme Implementation Agreement will be submitted and enacted by Parliament of Sri Lanka once it is signed and before its entry into force and will be published in the Government Gazette before submitted to Parliament,” a ministry statement said.
The Cabinet of Ministers this Tuesday authorised Finance Minister Mangala Samaraweera to sign the Compact Agreement with the MCC on behalf of the Sri Lankan government, ending months of uncertainty over the grant.
The Finance Ministry ensured that the government is following the due process in signing the agreement with consultations and guidance from the Attorney General’s Department.
“The whole process and the final agreements were done under the guidance of the Attorney General and well within the legal framework. The Attorney General is of the opinion that agreements are in order and there exists no legal impediment to execute same,” the ministry said.
Samaraweera first submitted the Cabinet memorandum along with the final drafts of the agreements on May 31, 2019 to the Cabinet of Ministers, and the Cabinet appointed a committee for further discussions of matters in detail.
Subsequently, he re-submitted the Cabinet memorandum dated July 5, 2019 seeking the approval of the Cabinet of Ministers to sign the Compact Agreement and the Programme Implementation Agreement. However, the Cabinet approval was delayed until early this week due to opposition from President Maithripala Sirisena in entering an agreement with US-based MCC.
The Finance Ministry said the proposed projects under MCC Compact were based on “constraints to economic growth analysis” undertaken by MCC in 2016 on the request of the Government of Sri Lanka (GOSL).
“MCC and the GOSL subsequently decided to focus on the land and transport sectors, which were identified as binding constraints to growth. The constraints analysis concluded that traffic congestion in the Colombo Metropolitan Region, poor transport connectivity between provinces, and weakness in land administration constrained economic growth. Accordingly, the MCC agreed to grant US $ 480 million for financing the above projects,” the Finance Ministry said.