King Coal and fiddlers free-EDITORIAL

While the 2015 budget was being presented by President Mahinda Rajapaksa in parliament yesterday, much public attention was focused on frauds and shady deals in a multitude of projects run by huge Chinese companies, the national and international controversies or complications arising from these.

Power and Energy Minister Pavithra Wanniarachchi responding in parliament to a question raised by United National Party’s economic activist Harsha de Silva revealed on Thursday that the government had lost more than Rs.1.5 billion in buying coal for the Norochcholai Power Plant. She said measures were being taken to recover the lost amount from those responsible after a probe by the Criminal Investigations Department. Ms. Wanniarachchi, known to be a confidant of the President pointed out that the fraud took place before she took over this ministry.

Yesterday morning, in a pre-budget blast, the former Power and Energy Minister Patali Champika Ranawaka said he was happy that the coal fraud was being exposed now. Mr. Ranawaka, who is now the Minister of Technology and Research, said coal purchases for several years were being made through a separate company set up by the Ceylon Electricity Board (CEB). He said this company was not going through normal tender procedures and he had little or no control over it.  He said he hoped that instead of only making statements in parliament and headlines in the media, those responsible for this huge fraud would be tracked down and punished.

During the highly publicised 23-hour visit by China’s President Xi Jinping last month, as many as 24 agreements were signed in the presence of the two presidents while many others were signed on the sidelines. One of these was for China to assist in the management, purchases and other functions of the Norochcholai Power Plant. While the Norochcholai plant and the Colombo Port City project have come in for severe criticism with conflicting claims, the biggest international controversy is over China getting a controlling stake of the strategic international port at Hambantota.

Our sister newspaper, the Sunday Times reported last Sunday that Sri Lanka had granted Chinese state-owned companies operating rights to four berths at the Hambantota Port. There had been no tenders or prior announcement but Sri Lanka Ports Authority Chairman Priyath B Wickrama said the Government had agreed to such a deal with the Chinese lenders in 2010. He said in exchange for these operating rights, the Chinese had consented to ease loan conditions. The ‘Agreement on Key Terms for Supply, Operate and Transfer (SOT) of Container Terminal Hambantota Port Development Project Phase II’ was signed on September 16 in the presence of the two presidents.  The partners in the Hambantota SOT will be China Merchants Holdings International (CMHI) and China Harbour Engineering Company Ltd, an engineering contractor and subsidiary of China Communication Construction Company Ltd. (CCCC), the newspaper said.

 According to an announcement made by CMHI to the Hong Kong Stock Exchange, it will hold 64.98 percent of shares while SLPA will have the remaining 35.02 percent. The total capital investment into the SOT is US$ 601 million, of which the Chinese will invest about US$ 391 million. The SLPA is not investing money in the project company and its capital will be the infrastructure, Mr. Wickrama said. After this news report was spotlighted on the front page, the CMHI’s website was restricted from Thursday and access was allowed only with permission and through a password. Who is trying to hide what? As the American publisher William Randolph Hearst has said, news is something that is suppressed. The rest is advertising. So what Sri Lankans are being told about China’s loans and contracts is largely advertising stuff while the real news is suppressed. Yet, as disclosed in parliament on Thursday, every Sri Lankan – including infants and unborn generations – is in debt to the tune of a staggering Rs. 400,000 and for every rupee we earn, 70 cents is pickpockted for the payment of taxes or interest on loans.