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During his visit to Japan last week, President Ranil Wickremesinghe at a meeting with Japanese Prime Minister Fumio Kishida, expressed his regret to the Japanese Government for the suspension of the Colombo Light Rail Transit (LRT) project which was to be implemented with Japanese Government support.

The LRT project was initiated by the Yahapalana Government to reduce traffic congestion in Colombo city and provide people with affordable and more convenient ways of public transportation.  

It was also designed to offer an emission-free travel experience to passengers and reduce the country’s carbon footprint.

The project’s objective was to boost the transportation capacity and improve the safety and comfort of public transportation by introducing a Light Rail Transit (LRT) system, with 16 stations from the Multi-Model Transport Hub in Colombo Fort to Malabe Depot. The proposed LRT system was to be 17 km in length.

In March 2019, the Yahapalana Government entered into an agreement with the Japan International Cooperation Agency (JICA) for a Japanese soft-loan of US$ 1.86 billion for the construction work of the LRT project.

After President Gotabaya Rajapaksa assumed office, for some inexplicable and yet unexplained reason, he unilaterally suspended the LRT Project.

On September 21, 2020, Dr. P.B. Jayasundara, in his capacity as Secretary to President Gotabaya Rajapaksa, informed the Transport Ministry Secretary that the LRT system was costly and “not an appropriate or cost-effective transport solution for the urban Colombo transportation infrastructure.”

In his letter, Dr. Jayasundera conveyed the President’s directive for the Transport Ministry Secretary to terminate the project with immediate effect and close its project office.

Inquiries conducted by the National Audit Department have revealed that the project had been cancelled by a Cabinet memorandum submitted on September 24, 2020; which was after the President had issued his directive.

Thus it would seem the President had taken a unilateral decision to terminate the project and submit it to the Cabinet for endorsement, which it did faithfully without even a murmur of disapproval.

Not surprisingly the unilateral decision of President Gotabaya Rajapaksa had irked the Japanese, who over the years, have had an excellent relationship with the country.

As the Sunday Times Editor in his Editorial of May 21, this year said “a longtime friend of Sri Lanka, unlike many other countries, Japan has never forgotten a good deed. The speech made by then Finance Minister and later President J.R. Jayewardene in San Francisco at the end of World War II to unconditionally support the re-entry of Japan into the international community, has been etched in the institutional memory of generations of Japanese policy-makers.”

Japan has also been one of Sri Lanka’s largest investors and was at one time number one on the list. Despite the unforgivable actions of the Gotabaya Rajapaksa government, Japan has continued to provide further assistance after Sri Lanka declared itself bankrupt last year and continues to play a big part in the discussions to restructure the country’s international debt.

One also recalls the part played by Japan during the Peace Process of 2022 by nominating Senior Diplomat Yasushi Akashi as a Special Envoy to assist Sri Lanka.

The added advantage of Sri Lanka obtaining Japanese assistance is; the latter has no hegemonic interests and therefore is not likely to draw Sri Lanka into any geopolitical entanglements.

As the Sunday Times Editor goes on to point out “It would therefore have been all the more hurtful to Japan when, after all the economic support it had given Sri Lanka, a foolish and corrupt exercise by those in President Gotabaya Rajapaksa’s Secretariat scuttled a generous offer to build a Light Rail Transit (LRT) system without the basic courtesy of informing the Japanese Government of its decision.”

Apart from the colossal blunder of treating Japan with contempt in its handling of the LRT Project and thereby harming Sri Lanka’s cordial longstanding ties with Japan, the cost to the country had been enormous.

A special audit report on the Japanese LRT project, issued by the Auditor General’s Department in November last year, revealed the country lost nearly Rs. six billion due to the previous government’s decision to unilaterally cancel the project. The report revealed that around Rs. 5.978 billion spent on the project until then, had been wasted.

In addition to the above expenses, the Japanese consulting company had demanded Rs. 5.16 billion, including the consultancy fees provided until the project’s termination and compensation for the project’s cancellation without any prior discussion.

If the amount was not paid and the company went to an arbitration procedure in the future, Sri Lanka would have to pay a huge amount such as the full consultancy fee and compensation, the audit report warned.

The audit report also said, while the funding for the project was provided by the Japan International Cooperation Agency (JICA), on the request of the Sri Lankan Government in 2016, no acceptable reason had been given for cancelling the project.

The funding was given on a concessionary interest basis, with a 12-year grace period and was to be repaid in 40 years.

According to the Audit Report this project had been cancelled by a Cabinet memorandum submitted on September 24, 2020.

After assuming office, President Ranil Wickremesinghe had been called upon to correct the blunders of his predecessor, and the fallout of the LRT Project’s cancellation was just one of many.

During his expression of regret to the Japanese Government for the suspension of the Colombo LRT project, he pointed out the need for future legislation in Parliament to ensure that large-scale bilateral projects could not be halted or cancelled without the agreement of both parties.

Prior to his visit to Japan, the President had obtained Cabinet approval for this purpose.

Cabinet spokesman Bandula Gunawardana told reporters at the weekly Cabinet briefing, that the Cabinet had approved a proposal by President Ranil Wickremesinghe to seek Parliamentary approval for agreements on foreign investments.

A government could also withdraw from or change such a foreign project with Parliamentary approval, Minister Gunawardana said, adding that in the past leaders had stopped foreign investment projects according to their whims and fancies and such ad hoc decisions had cost the country dearly.

Although Minister Gunawardana did not elaborate on the leaders who stopped such foreign investment projects according to their whims and fancies, Gotabaya Rajapaksa was certainly one of them going by his actions vis-a-vis the LRT Project.

That Minister Gunawardana himself was complicit in taking such an erroneous decision was proved by the fact that it was endorsed at the Cabinet meeting of September 24, 2020.

While President Ranil Wickremesinghe’s decision to ensure Parliamentary approval was obtained before going back on an investment project was salutary, it could only work in a context where Cabinet Ministers and Parliamentarians could think independently and had the capacity and the willingness to differ with their leaders when they wanted to stop foreign investment projects “according to their whims and fancies.”

Would the LRT Project have been saved if there had been a Cabinet decision in force on the lines outlined by Minister Gunawardana at the time the decision to cancel the project was made? Highly unlikely indeed. One cannot imagine Minister Gunawardana or his Cabinet and Parliamentary colleagues expressing dissent to Gotabaya Rajapaksa at that time.

(javidyusuf@gmail.com)