While the controversy over the Queen Elizabeth Quay involving P & O Shipping Corporation of Australia continues, Shipping Minister M. H. M. Ashraff is trying to calm the storm with his third cabinet paper.
But Mr. Ashraff may not see a solution until the cabinet appointed Committee submits a report.
However he will seek cabinet approval to issue a ‘letter of comfort’ to P & O enabling it to obtain credit from its bankers.
The outstanding issues such as financial and technical matters are yet to be sorted out by the Cabinet Committee comprising the Secretary to the Ministry of Ports & Shipping, the Secretary to the Treasury and the Attorney General.
But the committee has met only once since its formation and the Cabinet’s decision to issue a letter of Intent to P & O.
The controversy arose on October 2 when President Chandrika Kumaratunga wanted to talk to Minister Ashraff after the Cabinet Meeting.
The President asked the Minister about his scheduled visit to Germany and the Minister said he was hoping to fly on October 5.
He also told the President that he was planning to go to Ampara that afternoon and make an official visit to Puttalam on Saturday morning to attend some functions.
The President then asked Mr. Ashraff as to whether he could submit a Cabinet Paper on the QEQ proposing to hand over physical possession to P & O.
The President told the Minister, he could do so since the matter had been finalised.
Minister Ashraff who was taken by surprise said nothing had been finalised yet.
He then called Ministry Secretary M. M. Junaid to find out whether the matter had been finalised.
After convincing the President the Minister agreed to put off his visit to Ampara and discuss the matter with BOI chief Thilan Wijesinghe.
The Minister at the request of the President agreed to prepare a Cabinet Paper with a broader outline. That evening he advised Mr. Wijesinghe as to how he should prepare the Cabinet Paper on the QEQ matter and proceeded to Ampara on the following day. (Thursday.)
By Friday evening Minister Ashraff received a faxed copy of a draft Cabinet paper prepared by Mr. Wijesinghe. On Saturday morning while on his way to Puttalam the Minister read the draft Cabinet paper and was reportedly taken by surprise since he had felt that Mr. Wijesinghe had attributed to him certain comments which he had not made to the BOI chief.
The Minister deleted those paragraphs while participating in the official functions in Puttalam. He amended the Cabinet paper to read the way he wanted it.
He handed over page by page to Ministry Secretary Junaid who immediately faxed it to his Colombo office to get a computer print out of the amended version.
Finally Mr. Ashraff signed the Cabinet paper at the VIP lounge of the airport the same night, before he left for Germany.
Mr. Junaid who was at the airport for this purpose sent the papers to the Cabinet Office to be submitted at the next meeting.
On October 16, soon after Mr. Ashraff returned, his first official duty was to attend the Cabinet meeting. The President called him and handed over unsigned observations on his Cabinet paper which advised the Cabinet to reject Ashraff’s Cabinet paper. The unsigned observations, it is understood, emanated from Treasury sources.
The proposal to develop the QEQ had originally come up some time ago, when several shipping firms, including Hanjin of Korea and the American Presidents Line showed interest in it.
The P&O also pursued it.
Mr. Ashraff at that stage told P&O he would consider its proposals if it agreed to build a breakwater in the adjacent area of the QEQ.
Later, the P & O told Mr. Ashraff it could develop the adjacent area but couldn’t agree to build a new breakwater. It said that would have to be undertaken by the government of Sri Lanka.
The P & O also said it was willing to help the Government to obtain a soft loan for the purpose and was ready to guarantee sufficient income to service the loan.
When the Government published international advertisements calling for proposals only P & O came forward with an acceptable proposition. On that basis, Cabinet approved the setting up of the Cabinet Appointed Negotiating Committee (CANC) to go into the matter.
The Cabinet at the same time decided that the CANC should function under the direct supervision of the Minister.
The Committee comprised Ministry Secretary, Secretary to the Treasury, the Attorney General and the Special Advisor to the Ministry of Ports and Shipping.
Later, there was another Cabinet Paper to co - opt Chairman of the Bureau for Infrastructure Development (BID) Mano Nanayakkara.
At the first meeting the CANC had with the P&O they discussed the financial profile presented by P & O.
It took another turn when Ministry Secretary Junaid said they couldn’t decide over the table and entrusted further talks to be carried out by BID Chairman Mano Nanayakkara without the other members. He sought the assistance of present Chairman of the Ports Authority Ranjit Wickramasinghe, known to be an international financial consultant.
Mr. Junaid who approved Mr. Nanayakkara’s application for this, finally set up a working team to go ahead with the work entrusted to Mr. Nanayakkara.
But after awhile, it was observed that Sri Lanka Ports Authority officials were unhappy over the manner the negotiations were conducted and the matter was brought to the notice of the Minister.
Accordingly, a few meetings were held by the Minister and it was revealed that there was a sharp divergence of approach within the work team, where there were personality clashes. Mr. Ashraff tried to bring about some consensus.
It was observed that BID Chairman Mano Nanayakkara’s approach was profit based, while the SLPA official’s approach was revenue based. Chief Finance Manager of the SLPA, Anil Weerasinghe participated in these discussions on behalf of the SLPA.
SLPA officials were more concerned about a proposal made sometime ago by the Overseas Economic Co-operation Fund (OECF) of Japan to develop the Queen Elizabeth Quay.
The OECF of Japan had agreed to invest US $ 75 million while the SLPA’s component was estimated at US $ 45 million.
At this stage of negotiation, the pertinent question that arose was as to whether the development of QEQ should be entrusted to the OECF or P&O.
The SLPA’S officials’ argument was that if they went along with the proposal made by the OECF of Japan, Sri Lanka could earn revenue upto US $ 50 million an year.
Mr. Nanayakkara’s argument was that the Government did not have to borrow money from any overseas agency to develop any area where foreign investors had shown a keen interest to develop on a BOT basis.
His main contention was that the Government should do business for profit and not for turnover.
He said at present the QEQ earned around US $ 10 million per year which would go up to US $ 20 million if the OECF of Japan was given the job.
“If P & O Australia develops the same you have a bottom line of US $30 million per year which would go up to US $35 million, he argued.
When these arguments were put across the table Mr. Ashraff was in a dilemma as to who should be entrusted with the task of developing the QEQ.
Ultimately it went before President Kumaratunga and a final decision was made that Mano Nanayakkara’a approach was better. Minister Ashraff agreed.
When this decision was taken P & O wanted physical possession of the QEQ as early as possible, but the BOI and the SLPA decided that until they found a solution as to how they should handle bulk cargo without the QEQ, physical possession cannot be given.
In these circumstances a unanimous decision was taken that the North Pier of the Colombo Port should be developed, prior to the handing over of the QEQ to P & O.
But the vital problem that remains unsolved is the financial assistance required for the North Pier development. The government is unable to raise funds for this and at the same time no private investor would show much interest since the financial benefits wouldn’t be so much.
The OCEF, Japan has expressed its willingness to develop both the North Pier and the QEQ, but is not willing to develop the North Pier only, if the QEQ is given to P & O. However, the government has not given up efforts to persuade the Japanese government to grant aid to develop the North Pier.
At the same time, though the government has agreed on principle to hand over the QEQ to P&O, the Minister thinks it is not proper for Mr. Nanayakkara to decide on the financial side of the matter since he is only a member of the Cabinet Appointed Negotiating Committee.
The CANC initially met to discuss the issues involved, but thereafter it hasn’t met to decide on the full plan.
It was the work team headed by Mr. Nanayakkara which did the spade work, but he had to go to the CANC to get the needed approval.
It was on this promise that President Kumaratunga told Minister Ashraff to prepare the Cabinet Paper on the matter which led to a controversy thereafter.
Mr. Ashraff who met BOI Chief Thilan Wijesinghe after the President’s request subsequently amended the same to suit his requirements. This created a furore.
It also caused a political mix-up in the Sri Lanka Muslim Congress led by Minister Ashraff, but the matter in focus was the new port for Oluvil rather than the P & O issue.
But by Wednesday, October 23, on the birthday of the Minister Ashraff both parties moved to defuse the tension and agreed to talk to each other.
Since it was a Wednesday, Minister Ashraff attended the Cabinet Meeting as usual and found that the President had moved to withdraw the Treasury observations rejecting his Cabinet Paper on the QEQ.
As a reciprocal gesture he immediately moved to withdraw his Cabinet Paper paving the way to improve the relationship between him and the President.
On several occasions he went away to a quiet place to study the matter in detail and prepare a third cabinet paper.
There is an irrevocable Cabinet decision to hand over the QEQ to P&O but the third cabinet paper will come before the Cabinet only after the outstanding issues are solved.
At present there is 95 percent consensus on Mano Nanayakkara’s findings and now it is left to the CANC to negotiate with the P&O. It is likely that by next July the P & O will take over the QEQ.
Mr. Ashraff went before the last Cabinet meeting with these two proposals but the President who was away in Paris left a note to the Cabinet that they should not take up any controversial matter during her absence.
Thus, Leader of the House Ratnasiri Wickramanayaka who presided over the last Cabinet meeting had to put off everything on the agenda including Mr. Ashraff’s cabinet paper to raise the salary of the present Chairman of SLPA to Rs.100,000 which met with stiff opposition.
In the government there are many things happening besides these. The President’s move to recall Agriculture Minister D.M. Jayaratne from the FAO food summit in Rome, is one of them.
When the government learnt that the left minded Minister was going to make a hard hitting speech criticising the World Bank, it immediately moved to recall him saying that he should be back in the country to tackle the cost of living crisis.
But on his arrival nothing happened and the worried minister was still wondering why he was re-called.
The outspoken Mr. Jayaratne has a history of attacking the World Bank in various forms which the government thinks would be detrimental to its future negotiations.
Not only for Mr. Jayaratne, it was a bad week for Acting Defence Minister Anuruddha Ratwatte when government MPs made various allegations against him on appointments made by the Ceylon Petroleum Corporation.
Prominent among them was Benett Cooray who was taken to task by the Minister at his Parliament office at Jayewardenepura.
He told Mr. Cooray in no uncertain terms that he was not prepared to sacrifice any CPC official to please others.
Gen. Ratwatte said: “I take full responsibility for any action taken by my officials and am not going to sacrifice them for carrying out my orders. If anyone had charges against the officials they should sent the representations in writing. It will be investigated and action taken if any person was found to have committed acts of misconduct.
“But I am not going to ask anyone to resign for carrying out my orders, and I take full responsibility for it”.
As a sequel to this 42 MPs had written to the President requesting a meeting to discuss the CPC issue. Meanwhile, there is another move by the Presidential Secretariat to defer all the tenders connected to the Ceylon Electricity Board until the President returns.
The CEB also comes under the purview of Minister Ratwatte.
At the meeting of the Parliamentary Select Committee on Constitutional Affairs, members discussed various subjects, including appointments to the judiciary. DUNF member Ravi Karunanayake took some swipes at Minister G.L. Peiris when he said,
“These days where conventions are broken, we don’t need to talk about it. How are you going to protect?” Everybody burst into laughter with this comment.
The Select Committee is now sitting almost daily. The strategy seems to be to first cover areas where there is general agreement.
The Committee examines issue by issue in detail, and if the Chairman, G.L. Peiris is of the view, and the Committee feels that a particular issue needs further consideration, the item is laid by for further examination.
On Wednesday, a fiery confrontation took place between Ravi Karunanayake and Minister Thondaman over the composition of the Finance Commission.
When the exchange grew hotter UNP’s A.C.S. Hameed intervened and said “the more I see these confrontations the more I wander how the PA sticks together”.
“You are insulting us”, replied Dr. Peiris jokingly.
When the discussion on the powers of the Governor took place at one stage, Minister Peiris remarked, when he was last in Pakistan he had discussed the matter of the Governor’s independence with the President of Pakistan.
“I hope you did not give him any ideas”, quipped Attorney General Sarath Silva. Mr. Hameed added “.... and I hope that the President did not give you ideas.”
The Committee has still not agreed on the powers of the judiciary and its constitution.
There has been a long debate as to how the judiciary in the Regional Councils could be protected from political interference. It has been agreed also how, on some of the controversial issues, the members of the Select Committee should also continue to hold discussions among themselves.
Some of the important areas that are now being discussed include the appointment and the role of the Governor, the Board of Ministers and their powers, Legislative power, Regional judiciary, Regional Attorney General, Finance Commission, Regional Public Service Commission, State land, Law and Order.
After discussion on land which is one of the crucial issues it has been deferred for further consideration.
When the question of devolution was discussed, Ravi Karunanayake asked as to whether the provinces could lease out land vested in them to foreign countries.
The reply from the Chair was ‘yes’.
Mr. Karunanayake then said devolution means selling the country.
Dr. Peiris then said you are using emotive language and confusing the issue.
Mr. Karunanayake said “No. No. What I am saying is devolution is selling the country”.
At this stage Mr. Thondaman intervened and asked as to what the central government was doing.
If the central government could lease out land to foreign countries why can’t the provinces do it, he asked.
Meanwhile Minister Peiris is promoting maximum dialogue on all the issues because he seems to be of the view that none of the issues should be wrapped up without proper debate and analysis.
When the Select Committee on devolution continued its deliberations the two prominent political leaders President Kumaratunga and Leader of the Opposition spent time out of Colombo.
President Kumaratunga undertook a trip to Paris, while UNP leader Ranil Wickremesinghe was in recluse at the Tangerine Beach Hotel in Kalutara. Strangely both these trips coincided with the birthday of Tiger Supremo Velupillai Prabhakaran.
Political analysts say at least the UNP leader was within reach, mapping out his future strategies as to how he should lead the party to victory.
But it appears that he is facing some problems here.
The latest being between Sajith Premadasa, only son of former President Premadasa and Mervyn Silva, MP for Hambantota who crossed over to the UNP along with Anura Bandaranaike during the time of President D. B. Wijetunga.
To sort out these matters the UNP leadership decided to summon the UNP’s Executive body in Hambantota presided over by General Secretary Gamini Atukorale.
At this meeting there were allegations and counter allegations.
Mervyn Silva who is known for his vociferous rhetoric traded charges with Sajith Premadasa saying he organised a volleyball match in Tissamaharama on the day former President J. R. Jayewardene died.
He also said Mr. Premadasa had overstepped his boundaries and was sponsoring savings accounts (Tikiri ginuma) to people in the area and Mr. Silva pointed out that it was against the party’s rule of conduct.
Mr. Silva also alleged that Mr. Premadasa had praised Foreign Minister Lakshman Kadirgamar at one meeting in the South getting involved in the process of image building for the government.
UNP leader Ranil Wickremesinghe who made an unscheduled trip to Hambantota on the day of the Executive Committee meeting participated in the meeting listening to the speakers.
When Mervyn de Silva went on a tangent attacking Sajith Premadasa, Mr. Wickremesinghe intervened to stop him saying that he should not make unfounded allegations against another.
Mr. Premadasa in his reply said the match was organised long before the death of former President J. R. Jayewardene and that he was not in a position to put off the match due to special circumstances.
But Mr. Premadasa said soon after the match he rushed to Colombo to pay his last respects to the dead President.
Mr. Premadasa said Mervyn Silva was going round Hambantota district attacking him, and defended his position saying that he went round Hambantota for welfare work.
“I will not stop it and nobody can stop me” Mr. Premadasa said.
“I will leave the party but not stop my welfare work. I will go from village to village and tell people as to what happened” he said.
After everybody made their positions clear to the leadership, Mr. Wickremesinghe said if the two organisers Mervyn Silva and Sajith Premadasa couldn’t work together they should confine themselves to their respective areas.
Mr. Premadasa should remain in Suriyaweva and Mervyn Silva in Lunugamvehera.
He said that under the present circumstances he would be compelled to demarcate a border line for the two politicians.
Speaking about the funeral of former President J. R. Jayewardene he said nobody could predict about the death of Mr. Jayewardene and said the UNP put off their Executive Committee meeting owing to this which was organised a long time before the former President’s death.
Mr. Wickremesinghe said “everybody is entitled to go ahead with programmes as long as they remain in their respective areas but if they want to go into another area they should obtain permission from the people concerned”.
“Ananda Kularatne is going ahead with the Yowunpura programme to make himself popular, likewise Mervyn Silva is making an effort through his parliamentary speeches and “kavi” to make himself popular and Sajith also can continue with his welfare programmes but can’t allow to go on poaching.”
But for Mr. Wickremesinghe there are problems all over the country that need his attention.
A disciplinarian, Mr. Wickremesinghe has not hesitated to take action against some of his party activists for allegedly attempting to break party rules.
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