Columns

• Detectives complain that interim reports sought by ruling politicos have ended up in the hands of the suspects and their lawyers
• IGP in deep trouble, reprimanded by President and possible probe by Constitutional Council, but PM defends police chief
• Sticky issues remain over China-backed Hambantota Port project; new controversy over China-backed irrigation projects also; how will Beijing respond?

By Our Political Editor
In October, President Maithripala Sirisena warned he would take “strong action” if the state investigative arms were found to be working to a political agenda.
He was referring to the Criminal Investigation Department (CID) and the Financial Crimes Investigation Division (FCID), both coming under the Inspector General of Police. In addition, he also made reference to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), an autonomous body.

His words echoed in the hall of the Sri Lanka Foundation Institute (SLFI) where he addressed war heroes. His fears appear to have come true. On Friday (December 2), Police Chief Pujith Jayasundera was on the stage at a police commemoration ceremony at Ratnapura when his mobile phone rang. He rose from his seat, moved away a few feet and began to speak. Here is the text of an audio recording of what he said both in English and Sinhala though the caller’s voice is not on tape.

Jayasundera: Good morning Sir. Is that an urgent matter, Sir?
Yes, Yes, I wanted the Director, FCID to check and come back to me. But yesterday I was late after finishing that commitment. Mata eka hambuwuney nehe (I did not receive it). I will get the details and come back to you. Yes, Nilame’s matter. Nilame’s.

Enna kiyala thiyanawa. Aniwaren Sir, arrest karanney nehe (Has been told to come. Definitely, there will be no arrest. Magen ahala avasara nethuwa arrest karanna epa Kiyuwa. (Without asking me and seeking my permission, do not arrest. It is definite Sir. Aniwaren Sir, arrest venney nehe (There will definitely be no arrest).
Ehema nehe Sir. (It is not like that Sir). Mang ahala beluwa (I inquired and found out). It is definite he won’t be arrested.

Right Sir.
It was an enterprising television reporter who recorded on video Police Chief Jayasundera speaking. Even without the voice of the other person who was calling recorded on tape, it became clear that this unidentified “Sir” was in fact seeking to stall the FCID from the arrest of someone identified as only “Nilame.” The television channel in question aired the tape on Wednesday. Many eyebrows were raised.

As the guessing game went on about the identity of this “Sir,” President Sirisena turned up in Parliament on Thursday. The votes under the financial head of National Dialogue, National Integration and Reconciliation, all coming under Sirisena were discussed at Committee stage. Sirisena had finished making a statement when a Janatha Vimukthi Peramuna (JVP) MP raised issue. He charged that the Police Chief was “bending the law” when he told a minister over the phone that the FCID would not arrest a “particular Nilame.” Sirisena was to say that he too had seen the television coverage of the matter. He said that the Police Chief’s conduct was “completely wrong” and added that he would summon him to seek an explanation. Later, Sirisena summoned him and delivered a strong warning. He said he was also ordering an inquiry into the matter. Clearly, Sirisena would have been told by the IGP as to who had called him.

Following up on Sirisena’s response on the same day in Parliament, JVP leader Anura Kumara Dissanayake wanted to know whether the “Sir” in question was Public Safety, Law and Order Minister Sagala Ratnayake. However, he could not be contacted for a response. If the reference was not to Ratnayake, Dissanayake said, he should disown it on the floor of the House. There was no response from the Government benches. The same question was repeated on Friday and a proper response was not forthcoming. Higher Education and Highways Minister Lakshman Kiriella casually dismissed the issue by saying that Dissanayake’s observations were his private view, and that the “Sir” reference could be to “anyone”.

The Sunday Times learnt that the reference to “Nilame” was to Dishan Wickremeratne Gunasekera, Basnayake Nilame of the Devinuwara Devalaya, Matara. He was a Director cum CEO of the Mineral Sands Corporation under the previous regime. He is known to be a close relative of former President Mahinda Rajapaksa. FCID detectives said they were now investigating allegations of corruption against Gunasekera. They had asked him to furnish a series of financial statements and the move had sparked rumours that he was to be arrested, these detectives said.

The saga of “Sir” and the “Nilame” came after the ministers had, at their weekly meeting last Tuesday, discussed the issue of arresting state service officers over cases connected with bribery and corruption. This follows the recent questioning of senior Treasury officials serving in different statutory boards and corporations to fulfil a requirement of the law. President Sirisena noted that public officials should not be held responsible just because they were on the directorates of such institutions. He turned to Finance Minister Ravi Karunanayake and declared; “You will have difficulty in getting their co-operation if this kind of thing goes on.” Such situations have made officials turn against the Government. They would also be reluctant to carry out directives for fear of facing questions from the FCID.

The IGP’s phone call episode has laid bare some very unsavoury realities. It makes clear that contrary to the fundamental precept that all are equal before the law, some are more equal. They seem to include alleged wrongdoers who had served the previous regime. The current leadership vowed during the presidential and parliamentary elections to bring them to book. It is now clear that there are strong exceptions too and that raises the all-important question of the much-talked of nexus between ruling political elements and those in the Opposition. Little wonder, some top investigators complain that contents of “interim reports” sought by some ruling politicos ended up in the hands of those under investigation and those looking after their interests. Such documents have even been produced at legal consultations.

This, no doubt, raises issues about the Police Chief himself. Action in respect of some of the important incidents has either been delayed or stalled altogether. One such instance is how the Police tear-gassed wounded war heroes who assembled outside the Presidential Secretariat on November 7. An official Committee was appointed to probe the incident and it made its recommendations known. The Sunday Times learnt that the Constitutional Council will summon Police Chief Jayasundera and an investigation is also to be launched by the Police Commission. Not so long ago, the Constitutional Council Chairman, Speaker Karu Jayasuriya, summoned Jayasundera to warn him about his conduct after complaints were made to the former by those at the highest levels.

In Parliament yesterday Speaker Karu Jayasuriya said: “The President spoke about this matter yesterday. The Prime Minister has also spoken. We even met the Chairman of the National Police Commission and discussed it. We will also be meeting the Minister. The Constitutional Council is due to meet next week and we will take a decision on it. There are various allegations. The Prime Minister, the Opposition Leader and even an MP from your party and members of the civil society are on the Constitutional Council. We will take a decision regarding the appointment.”
Responding to the Speaker’s remarks, Prime Minister Ranil Wickremesinghe declared: “I would like to clearly state that if there is any allegation against the IGP then let us know. There is no allegation at the moment. He was simply answering a question he was asked. At the moment, we are having several big strikes. In such a situation, we can’t reduce the powers of the IGP. We need to ensure that the law and order situation does not collapse.

“As such, I will only discuss this matter at the Constitutional Council (CC) if there is a credible allegation against him. Otherwise, I will clearly state that there is no need to take up this matter at the CC. We can resolve it elsewhere. He (IGP) has not stopped investigations into anything. Just because it has been carried in the media does not mean there is a problem with this case. He had stated that the individual would not be arrested on the day that the court case is filed because there are certain documents that are required from this individual. The IGP told me that the next step in the case can only be determined once they scrutinise those documents.”

Police Chief Pujith Jayasundera, much in the news these days, seen with Public Safety, Law and Order Minister Sagala Ratnayake yesterday at the CR&FC grounds where they watched the rugger match between Police and CR&FC. Pic by Amila Gamage

Premier Wickremesinghe’s position contradicted President Sirisena’s remarks that it was wrong for the IGP to have acted that way. He expressed his regrets in Parliament.

There is no gainsaying that such developments adversely affect the Government. With crime on the rise, the law and order situation less than desirable and more policing required, the hierarchy is embroiled in other issues. More so at a time when there are periodic strikes and protests which have a debilitating effect on the country’s economy – a high priority area. Day-to-day policing to ensure there is law and order on such situations, a Police source said, was being carried out by peripheral heads.

One such high priority area for the Sri Lankan economy is the development of the Hambantota Port. A Concession Agreement between Sri Lanka and China for this purpose is now on its final stages. Prime Minister Ranil Wickremesinghe has directed that the agreement should be executed on or before January 7. The idea was to present it for approval by the Cabinet of Ministers. The status on November 27, according to a position paper from the Ministry of Development Strategies and International Trade, lists six different areas as “critical.” The paper describes them as “sticky issues.” The emergence of a final draft (in addition to other related documents) will hinge on resolving the issues.

Here are those issues:
• China is insisting that there should be a restriction on development of any other facility within 200 kilometres from the perimeter of the Hambantota Port. This new condition, which was not part of their original Project proposal for the first draft of the Framework Agreement “pushing them to agree to exclude Colombo, Galle and Oluvil Port development.” It says that China’s main concern is possible development in Galle, which may impact Hambantota.

• The Minister of Ports and Shipping (Arjuna Ranatunga)/Sri Lanka Ports Authority (SLPA) insists upon port security, “quoting the SLPA Act and concerns over National Security.” The note points out that “the real reason may be jobs and trade union issues. There is no rationality in the arguments presented by SLPA and hence needs to get them to agree for the Security to be provided by the JV (Joint Venture).”

• The SLPA/Minister of Ports and Shipping speak of a Concession period of around 45-50 years, while Chairman, SLPA (the Minister’s brother) insists on 99 years, with provision for further extension of 99 years. The latest draft of the Framework Agreement only states 99 years, with provision for extension, on mutually agreed terms, without a specific period. If this is accepted by the Chairman, Port, the only remaining issue would be getting the Minister of Ports and Shipping (Arjuna Ranatunga) and the SLPA (Dhammika Ranatunga) to agree to the same term.

•  Harbour Tonnage – SLPA and the Minister of Ports and Shipping insist that the Harbour Tonnage (a fee levied by a Port based on the size/capacity of the vessel, when she enters a Port) should be collected by the SLPA, being the Owners of the “Port” (believe that Hambantota is a national Port declared under the SLPA and only the assets, except the land, which is leased, would be vested on the Joint Venture) and agree to be responsible for maintenance of the breakwater, turning bay, entrance channel and associated facilities.

•  However, this is a critical aspect for operational efficiency of the Port, wherein the operation of the Port will be severely impacted, in the event the facilities are not up-kept and brought in line with the types of operation the Port is to perform. Further, the investment that were spent on creating all such facilities are to be vested on the Joint Venture, pursuant of the Debt-to-Equity swap. Hence, the argument from Chairman, Port is that such revenue and associated up-keeping should be the responsibility of the Joint Venture, which is fair and rational. Requires, obtaining the consent from the Minister of Ports and Shipping and the SLPA.

•  Pilotage – As per the Pilots’ Ordinance and the Master Attendant’s (Harbour Master’s) Ordinance, the Harbour Master and the Pilot, play a dual role of regulator and the service provider (piloting) for a vessel. Minister of Ports and Shipping/SLPA is of the view that this role/function should be with the SLPA. Again, this is a matter extremely critical for operational efficiency of the Port. Hence, the Chairman Port is of the view that the Pilot should be under the operational control of the Joint Venture, while having independent and direct reporting system with regard to regulatory function.

•  Chairman Port is agreeable, for the time being, to do things as currently done by Magampura Port Management. Consultancy (MPMC), where the Pilots assigned from SLPA function under the direction of the MPMC. Chairman Port is ready to re-imburse the actual cost for providing Pilots by SLPA. Short-term, this arrangement may be acceptable, but going forward the relevant Ordinances may have to be amended. Requires, obtaining the consent of the Minister of Ports and Shipping/ SLPA.

•  Royalty – The Minister of Ports and Shipping/SLPA insists on a royalty payment (quoting China Harbour proposal which contained such royalty payments). Chairman Port is ready to discuss this on a revenue sharing basis, once the Port utilisation reaches a mutually agreed level. This may have to be agreed during the negotiation of the Concession Agreement.

The note says that the provision of a condition to conclude all Transaction Documents (not contained in the Project Proposal), “seem to be a modus operandi to bring pressure on us to complete all documents, expeditiously.”
They include the Non-Disclosure Agreement, Shareholder Agreement, Joint Venture formation, Concession Agreement, Lease Agreement and Asset/Liability Transfer, it adds.

It is not immediately clear whether the negotiations could be finalised for the agreement to be signed before January 7 next year. This is particularly in the light of the need to resolve the “sticky issues.” The development came as the Financial Crimes Investigation Division (FCID) began investigations into an alleged scam involving more than four billion rupees. President Sirisena told a meeting connected with a membership drive for the Sri Lanka Freedom Party (SLFP) that one billion rupees has been issued in 2012 by the Finance Ministry for the project. Thereafter, the Treasury had also issued more than three billion rupees in 2015. Sirisena said that not even a sod of soil had been dug for this Nilwala project. A Chinese company was involved in this project.

FCID detectives questioned two officials, one in the Department of Irrigation and another in the Ministry. Detectives say that China CAMCE Engineering Company Limited had been paid an advance of Rs. 40 million but the project had not got off the ground even after six months. Later, they say, a sum of Rs 2,972 million has been paid to the same company. There had been no agreement signed nor steps taken to forfeit the surety.

However, a Cabinet Memorandum submitted by Gamini Wijith Wijayamuni Zoysa, Minister of Irrigation and Water Management, dated July 7 provides a different version. It casts serious doubts on some of the claims. Here are highlights that underscore the contradictions:

“Although it has been proposed for a long time to provide water to Hambantota area by constructing large and medium scale reservoirs in upper reaches of Nilwala and Gin river basins, but such proposals could not be implemented during that era, by now, it has been unpractical to divert Gin-Nilwala water to Hambantota area through such reservoirs as the relevant river basin areas have undergone a huge development at present…..

“Since a large development has taken place in Gin-Nilwala river basins at present, it was proposed to use tunnels as much as possible to minimise the damages to the environment and affecting the people, and this has resulted to make this Gin-Nilawala diversion project a complex as well as an expensive project. Thus, the Cabinet of Ministers approval has been granted in 2009 vide cabinet decision dated 26th November 2009 to sign an MoU with China CAMCE Engineering Company Ltd. to enter into an EPC contract to obtain monetary provisions required to launch this project.

“As per the MoU signed in 2009, the said company after having studied deeply on various water diversion methodologies for three years and paying much attention towards water diversion locations and transfer routes, prepared a feasibility report in 2012 to fulfil water requirements of Greater Hambantota development area by diverting water in Nilwala and Gin river basins…..

“The updated feasibility for Gin-Nilwala diversion was prepared in April 2014 including recommendations made by the line agencies of the EIA (Environmental Impact Assessment) study as Environmental Authority, the Forest Conservation Department, the Wildlife Department after conducting field inspections. Also, the TOR (terms of reference) for the EIA study for implementation of this project was issued in 2014 by the Environmental Authority, after conducting several discussions on the feasibility of these proposals with the line agencies and conducting field inspections.

“In parallel, an updated feasibility report was submitted to China CAMCE Engineering Co. Ltd. for further studies and to provide technical and financial proposals separately for an Engineering Procurement Committee and the Cabinet has approved to enter into a contract agreement worth US$ 690 million with China CAMCE Engineering Co. Ltd., vide the Cabinet decision dated October 10, 2014. Moreover, the relevant agreement had been forwarded to the Attorney General’s Department and their observations and consent were sent to the Ministry on April 4, 2014.

“Accordingly, the agreement was signed between the Ministry of Irrigation and Water Resources Management and China CAMCE Engineering Company for US$ 690 million on November 5. 2014….. With the understanding of providing these services from the contractor by paying five per cent of the contract amount as agreed upon of the EPC contract to the China CAMCE Engineering Co. Ltd., the amount of US$ 29,989,000 (approximately 4.35 per cent) has been paid, as part of the Advance Payment in three instalments on the days of December 31, 2014, January 6, 2015 and January 7, 2015 with the available imprest at the time.

“After the new Government took over in 2015, this project was reviewed by the Cabinet Sub Committee on Economic Affairs and several discussions were held to make clarifications in this regard between the subcommittee and the official committee on Economic Management……”

Minister Zoysa’s cabinet memorandum raises some pertinent questions. He sought approval to go ahead with the project with the same Chinese company. He sought the appointment of a committee of officials to negotiate with the company to split the contract in two stages. More importantly, he sought the approval of the Cabinet of Ministers to pay a balance of US$ 4,511 million to China CAMCE Co. Ltd. and sign an addendum to the contract agreement.

Sections of the Government believe funds for this project, said to have been issued in the form of a cheque from the Treasury, were allegedly utilised for the last election campaign. Investigators have so far found no evidence to confirm this. If indeed there were discrepancies, it is not clear why the issue was not raised in the Cabinet Memorandum and Ministers kept infomed. There is little doubt that some of the positions taken up by the Government are contradictory and some questions do remain. Main among them is whether money did change hands. If so, who received such funds?

It is at a time when a Chinese enterprise is to be awarded the contract for the Hambantota Port that another of Beijing’s companies has come under probe. That such a move will draw some response from the Chinese authorities is not in doubt.

This is whilst the Police Chief’s telephone saga has raised serious doubts on whether the Government is serious about pursuing high profile cases related to bribery and corruption to its end. It is no exaggeration to say that eroding public confidence, in the wake of rumours of a nexus between those high and mighty in the political divide, have now become a fact.