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Govt. in fresh bid to get MCC grant approved before Sept. 17 review
View(s):The Government has strongly defended the proposed Millennium Challenge Corporation (MCC) agreement, enabling Sri Lanka to obtain a grant of US$ 480 million, with the MCC board set to review the agreement at its next meeting on September 17.
The Government’s defence of the agreement was presented to the Cabinet this week after President Maithripala Sirisena further delayed approval for the proposed agreement.
The move came as the United States embassy said the proposed grant was now set to be reconsidered.
“Discussions are ongoing. The MCC approved the $480 million grant four months ago and is awaiting cabinet approval before its mid-September Board meeting. At that point, Sri Lanka’s eligibility for grant funding may be reconsidered due to its graduation to upper middle income status,” a US embassy spokesman said.
A document submitted to the Cabinet in response to objections raised over the MCC agreement said there was no issue of any “overriding domestic laws” since the Government’s negotiation team that included Attorney General’s Department officials, was able to amend the original clause of the draft agreement which required the status of International Law. “During negotiations, the Government asked MCC to remove any language that would supersede domestic law and the MCC agreed,” the document stressed.
The document further noted that the MCC compact includes provisions for termination of the agreement by the MCC or the Government of Sri Lanka by giving 30 days’ notice. Therefore, it is not factually correct to say that only the MCC has provisions to terminate the compact, it added.
The issue of harassment of women being mentioned is not to embarrass the government, the document remarked, pointing out that the problem of harassment of women on public transport in Sri Lanka (and many other countries) has already been well publicised. “Instead, the purpose is to recognise and identify the problem so that remedial actions can be justified and taken as every description of compact activities begins with an analysis of the problems a country seeks to address.”
Regarding the projects being selected by the MCC, it has been pointed out that while many ministries submitted projects, they were considered from the aspect of a Constraints Analysis, areas covered by other donors, completion within five years, economic return and other factors.
The document added that the MCA is a company by guarantee which will be established to implement the project in a specific time frame. The Board of Directors are Government nominees and therefore, it’s totally a Government entity. “Money will be reflected in the national accounts and national budget and spent by line ministries and supervised by COPE, COPA and Parliament. Grant funds are usually not channelled through the Treasury, but contractors and vendors are directly paid by the donor. Budgetary provisions will be made in the national budget to account for this expenditure. Therefore, it is clearly not outside Government,” it claimed.
(See Business Section for related story.)