My attention has been drawn to the middle page column written by your political correspondent under the caption ''The Show Behind the TV Show'' which appeared in your esteemed journal on 4th January 1998.
As my name has been mentioned in your article unnecessarily when referring to the interview given by the President to the popular "Janamandali'' TV program, I am compelled to bring to your notice denying my involvement in this program at all. First of all I would like to inform you the article by your correspondent contains many references that are not only far from the truth but also malicious and misleading.
While I categorically deny my involvement in any activity related to this interview I would like to enlighten you that as in all other Janamandali programs this too was completely handled by the SLRC staff.
Further, as thousands of questions had been poured into from the people of various degree to the head of state (even an ordinary citizen will accept that there will be thousands of questions if a head of state appears on TV to answer questions from the general public), there was no need for any authority to pose or articulate any questions as endeavoured by your correspondent to ridicule the good intention of the President.
Therefore, I sincerely appreciate if you would kindly publish this clarification with the same prominence as was given to your article under above caption.
Thanking you,
Yours faithfully,
Ariya Rubesinghe,
Director of Information.
Our Political Correspondent says that he stands by the story.
A major political and legal storm is brewing over the Galle Port development project - with the government on Wednesday refusing an extension and cancelling the huge tender given to a UK- China Consortium while the tenderer's agents here screamed that an interested party had worked behind scenes to sink the deal.
The project, vital for the government's strategy of national and especially southern development, has been bogged down for more than one year and the latest twist makes it evident that it may not get off the ground even by the turn of the century.
The government on Wednesday revoked the Letter Of Intent (LOI) issued to Mot. Mac Donald/ China Construction Consortium (UK-China Consortium) on a recommendation by Minister of Ports and Shipping M.H.M. Ashraff.
Mr . Ashraff also sought the approval of the Cabinet to reject the two feasibility study reports on the Galle Port done during the former regime.
Accordingly, the government has issued a formal letter to Ceylinco Insurance Company Ltd., asking for the encashment of the bid bond worth US $ 2.5 million.
The whole episode on the Galle Port expansion project blew up after President Kumaratunga castigated the failure to make any progress on it.
She said the tenderer had let the government down but later she told her Cabinet colleagues she did not mean anything bad when she referred to the Galle Port.
The President specifically told them that she did not use the word ''deceived'' as reported in the press.
Minister Mangala Samaraweera who interjected at this stage said he viewed the videotape, after seeing the press reports which allegedly misreported the President's speech in Galle.
He said he did not hear anything adverse regarding the Galle Port tender.
However after the President's statement in Galle the opposition UNP issued a statement calling upon the government to sack all the politicians involved in the Galle Port tender.
The UNP also said there was some justification in bringing the no-confidence motion against Minister Ashraff last year, though it was defeated.
Soon after the UNP statement, Minister Ashraff was brought under severe pressure by authorities to present a Cabinet Memorandum with immediate effect revoking the LOI issued to the UK-China Consortium.
Though he was in hospital to take some tests, Mr.Ashraff found time to prepare a Cabinet Memorandum revoking the LOI.
The Cabinet Memorandum states thus:
"Proposals for the development of the Galle Port were invited by the Secretary / Ports & Shipping in September 1992. Although more than 50 companies or their local agents were present at the first meeting only four companies responded, of which three companies namely: 1. Stevedoring Services of America, 2. P & O Australia, 3. Ballast Nedam Dredging of Netherlands, were pre-qualified. Subsequently all three companies declined to submit proposals as they felt that the project was financially not viable due to the inclusion of dredging and the construction of the breakwater. They were also unable to come to an agreement, with the Sri Lanka Ports Authority in respect of sharing of shipping lines, tariff, rent etc.
''Consequently, the Cabinet Sub-committee on Monetary Affairs decided that the government should invest in the dredging and the construction of the breakwater in order to make the project viable and more attractive on BOT terms.
"In March 1994, in terms of the direction of the Cabinet Sub-committee on Foreign Investment to the Director General/Secretariat for Infrastructure Development and Investment (SIDI) the three investors who were pre-qualified on the previous occasion and along with those who failed to submit proposals and all others who had shown interest (totalling about 50) were requested to submit proposals. Proposals from the following were received up to 30th June 1994.
'' 1. GL International Ltd - USA, 2. Navatair Pty. Ltd - Australia, 3. Ham & Interbeton - Netherlands, 4. Mott MacDonald/China Construction Consortium - UK/China, 5. Dredging International - Belgium, 6. Eagle Pacific Ltd. - Hong Kong, 7. BM Titan - Belgium, 8. Boskalis Westminster Dredging B.V. - Netherlands, 9. North East China Water and Hydro-electric General Development Corporation of China - China,10. Hamburg Port Consulting - Germany,11. Yampa Trading Inc. - USA,12. Marine Consortium (Pvt.) Ltd. - Sri Lanka.
Steps taken under the present government
''On the direction of the President, a committee was appointed to advise the Ministry on the steps to be taken to proceed with the development of the Galle Port. The committee recommended to the Ministry that the Project be pursued on the basis of the preliminary proposals already received by the SIDI and that all the parties pre-qualified by the Technical Evaluation Committee be requested to submit comprehensive proposals responding to the Request for Proposals already furnished and providing any other additional information that may be required.
"The committee also expressed its serious concern about the unlikelihood of the project taking-off the ground unless the government took the responsibility for financing the breakwater and dredging. However the committee also noted that any proposals received for developing the entire project on BOT terms should also be considered. Such proposals should include both the option viz, i. the total package, and
ii. only for the container terminals and related facilities on the basis that the government would develop the breakwater and undertake dredging.
"In the meantime, some of the pre-qualified applicants also expressed the possibility of arranging loans for the GOSL to develop the breakwater and undertake dredging.
"Under these circumstances, then Ministry submitted a Cabinet Memorandum dated 18th November 1994 and sought the approval of the Cabinet of Ministers for one or a combination of the following alternatives for the development of the Port of Galle.
a. Government to undertake the construction of the breakwater and dredging with funds found by the government. The rest of the project to be handed over to the foreign private sector to be handled on BOT basis. OR
b. Government to undertake the construction of the breakwater and dredging on a loan arranged by the company to which the contract is given to perform the balance project on BOT basis. OR
c. The entire project to be handed over to a foreign private sector company to be handle on BOT terms
"The Cabinet of Ministers at its meetlng of 30th November 1994 having decided to drop the option (b) above, expanded the committee with the inclusion of a representative of the Ministry of Fisheries and Aquatic Resources Development and requested the committee to study the alternatives (a) and (c) and make recommendations. The said committee having, studied both these options, prepared a comprehensive Terms of Reference so that the short-listed bidders could submit comprehensive proposals.
"In February 1995, proposals under options (a) and (c) for the development of the Galle Port BOT basis were called from seven pre-qualified bidders recommended by the Technical Evaluation Committee of the Ministry and responses were received from the following firms.
1. Ms. G. L. International, 2. Ms. Ham Interbetton,
3. Ms. Marine Consortium, 4. Ms. Mott MacDonald (UK-China Consortium).
The Cabinet of Ministers at its meeting of 19th April 1995 granted approval for the Cabinet Appointed Committee referred to above to function as a Cabinet Appointed Evaluation Committee (CAEC).
"Although Ham Interbetton obtained the highest marks, the CAEC by a majority decision recommended that the UK China Consortium be selected for the implementation of the project.
"The Ham Interbetton proposal indicated that it would develop terminals on BOT basis and that the construction of the breakwater and the dredging of the entrance should be funded by the government. It further proposed that it could arrange funds for the government and that the government should in addition to constructing the breakwater should take responsibility for meeting the cost of its construction. Ham Interbetton also proposed amendments to the original JICA plan.
"Under these circumstances, the CAEC rejected the proposal made by Ham Interbetton as it felt totally outside the envisaged BOT scheme.
"Accordingly the approval of the Cabinet of Ministers was sought by the Cabinet Paper of 22nd August 1995, to negotiate with the UK China Consortium and to issue a Letter of Intent to it with the concurrence of the Attorney-General. The Cabinet of Ministers at its meeting of 23rd August 1995 approved the above recommendation.
Comments
i . Letter of Intent
"The Letter of Intent in terms of the Cabinet decision was issued on 10th May 1996 to United Kingdom - China Consortium {Mott MacDonald / China Construction Consortium C/o Construction & Personnel Services (Pvt) Ltd., [CAPS]} with validity for a period of 540 continuous days from the operative date i.e. 1st July 1996 and contained the following milestones.
a. Feasibility Study to be completed within 180 days from the operative date.
b. To produce Letters of Support within 300 days from the operative date.
c. The Consortium to negotiate with the GOSL up to a period of 450 days from the operative date.
Before the issue of the LOI on 8th May 1996 the Construction Personnel Services (Pvt) Ltd., informed that the Consortium be renamed Euro-China Ports Construction Consortium, because HAM, INTERBETTON and NUTTALL of the Netherlands, one of the original bidders, would be joining the Consortium on the understanding that the Feasibility Study would be undertaken according to the JICA plan. The Ministry indicated that it had no objection to it. However, the LOI and the Surety Bond continued to be in the name of the UK China Consortium
ii. Surety Bond.
"In terms of the LOI the Surety Bond No. COBB /2239 valid from 09.05.1996 which guaranteed a would be SLR 137,250,000.00 million (Rs. equivalent of US$ 2.5 million) encashable by the GOSL if the Consortium failed to achieve the first milestone of submitting the required Feasibility Study Report within a stipulated period, was furnished by Construction and Personnel Services (Pvt) Ltd., by on behalf of the UK China Consortium. The LOI stipulated that the Surety Bond be valid for 210 calendar days from the operative date. The above Surety Bond had been extended by the UK China Consortium up to 31st December 1997.
iii Memorandum of Understanding with the Government of the Netherlands
Through the Sri Lankan Mission in the Netherlands, I also signed a memorandum of understanding with the Minister for Foreign Trade of the Netherlands in November, 1996 whereby the Netherlands Government agreed to provide up to a maximum of Guilders 450,000.00 to carry out the feasibility study of the Galle BOT project. The participation of the Government of the Netherlands in my view enhanced the seriousness and strength of the Consortium .
ix. Follow up on the Bid Bond
"In view of the fact that both the feasibility studies were not acceptable as financially viable, the Ministry had issued a formal letter to Ceylinco Insurance Company Ltd., encashing the Bid Bond.
RECOMMENDATIONS
Therefore I seek the approval of the Cabinet of Ministers for the following,
"i. Rejection of the two Feasibility Study Reports on the Galle Port development on BOI basis submitted to the former Ministry of Shipping, Port, Rehabilitation & Reconstruction with immediate effect and parties be informed accordingly.
"ii. Revocation of the Letter of Intent dated 10th May 1996 issued by the Ministry to Mott MacDonald / China Construction Consortium (UK China Consortium ) C/o. Construction and Personnel Services (Pvt.) Ltd.
"iii. Calling for Expressions of Interests (EOI proposals by the BOI for the Galle Port Development on full BOT basis or GOSL undertaking the construction of the breakwater and dredging and to proceed on the basis that relevant guidelines outlined for the evaluation of such proposals. Local and international advertisements should be published for this purpose not later than 15th February, 1998, stating clearly that the proposals should not envisage any curtailment of development of other ports in Sri Lanka and requesting responses within three ( 03) months.
"iv. Appointment of a Cabinet Appointed Negotiating Committee (CANC) for the Project consisting of the following members:
o Secretary, Ministry of Finance & Planning.
o Attorney General.
o Secretary, Ministry of Port Development, Rehabilitation & Reconstruction.
o Chairman / Director General, Board of Investment of Sri Lanka.
"v. To appoint a Project Committee (PC) consisting of the following members:
o Chairman, Sri Lanka Ports Authority (PC Chairman)
o Representative from the Attorney General's Department
o Representative from the Ministry of Ports Development, Rehabilitation & Reconstruction
o Representative from the Ministry of Finance & Planning
o Representative from the Central Environmental Authority
.o Deputy Director General, Bureau of Infrastructure Investment (as Secretary/ Convenor of PC)
"vi. Authorise the encashment of the Bid Bond amounting to US Dollars Two million Five Hundred Thousand (US$ 2.5m furnished by Construction and Personnel Services (Pvt) Ltd., on behalf of the Consortium."
Having presented the foregoing Cabinet paper Minister Ashraff rushed home to prepare a media statement which he distributed during the weekly Cabinet news briefing on Thursday.
The same night Colombo businessman A.J.M. Muzammil who worked closely with S.A. Kandasamy, the representative of the UK-China Consortium, visited the Minister to see what had gone wrong.
Mr. Ashraff emphatically told Mr. Muzammil that the government would call for fresh bids.
Mr. Muzammil upon returning home, immediately contacted Mr. Kandasamy, who by that time was thinking on the next step.
Mr. Kandasamy, the Chairman of the local promoter of the Galle Port expansion project, who is also a Vice President of the Ceylon Workers Congress, says the decision to revoke the Letter of Intent was unfair.
He believes that there was a planned effort by an interested party to take the project away from them, at a stage when they had made much progress. Mr. Kandasamy said that according to the Cabinet memorandum submitted on Wednesday, the BOI in its observations had rushed the Ministry and the government.
The BOI, he said, had claimed that the feasibility study carried out by Chinese experts had called for government participation. He said this was incorrect.
They only asked for certain concessions which is a normal practice under any BOI project worldwide.
"We have during the last six months got the Chinese and the Jahore project people to work together to make this project a reality," Mr. Kandasamy said.
The latest design produced by the Chinese and the Jahore Port of Malaysia is capable of handling 1-8 million TEUs annually which is more than the normal amount expected.
The JICA report said that it is capable of handling only one million TEUs and at the same time one must not forget that this tender was floated on the report submitted by the JAICA, Mr. Kandasamy added.
At the time of cancellation the Chinese partners have agreed to raise US $160 million from the China Expo Bank and the Bank of China while the Jahore Port firmly committed 10% equity with an assurance to increase it substantially as the project progressed, he said.
It's a mystery as to why it was cancelled after so much of progress, he said.
Mr. Kandasamy said:
"We have not deceived anybody as reported in the press, and we are looking for options available to challenge the government's decision.
"The government has no right to encash the bid-bond because we have accomplished our duty by submitting the feasibility on time.
"I can't understand why the government failed to give us an extension, when there are valid reasons. "I say this because the Malaysians and the rest of the South Asia are facing a severe economic crisis at this point of time."
Mr. Kandasamy is of the opinion that the government should look into all these circumstances before taking a decision.
However he said the government's decision had compelled the local promoter seek legal advise. Mr. Kandasamy is consulting Neelan Thiruchelvam for legal opinion and he is confident they have a prima facie case against the government.
Wijeyapala
Mendis
Divisions within divisions and wheels within wheels are
emerging as President Kumaratunga moves again to strip ex-Minister Wijeyapala
Mendis of his civic rights - while the UNP launches a new anti-corruption drive
by warning that when it comes to office, it will abrogate any deal to privatise
AirLanka.
The move to strip Mr. Mendis of his civic rights is likely to come up before Parliament next month as the government plans a fresh offensive against the opposition UNP.
The government's move comes in the wake of UNP plans to bring in a people's petition to impeach the President.
The UNP at present is carrying out a campaign against the government over several matters including the locomotives issue and the Galle Port expansion project.
President Chandrika Bandaranaike Kumaratunga, since the latter part of December has shown a keen interest in moving the resolution to deprive Mr. Mendis of his civic rights mainly to counter the UNP's propaganda, particularly against her.
The President told Minister G.L. Peiris and Jeyaraj Fernandopulle to bring in the resolution as fast as possible.
When the Ministers pointed out that the UNP would not support the resolution, the President insisted that it be moved in Parliament irrespective of the outcome.
Now the plan is to call a vote by name so that everyone would know who voted for and against.
Tamil parties have indicated they are not in favour of the resolution since they don't agree with the Special Presidential Commission concept in principle.
The UNP in the meantime is in a dilemma whether it should support the motion or not.
Though the UNP hierarchy wants Mr. Mendis to step down to avoid embarrassment to the party. Mr. Mendis says he would fight back and stay in Parliament as long as he could.
The UNP has also thought of an alternative which requires Mr. Mendis to make a specific statement to Parliament to say that he would retire from active politics once the term of this Parliament ends.
But Mr. Mendis is adamant. He has told close associates he would not resign from Parliament or the party under pressure from the party leadership.
In short he had said, "If the UNP wants let it vote against me."
This leaves the UNP in a dilemma as to what it should do next.
The UNP in the process may issue a statement to the effect that the appointment of commissions by the PA is largely politically motivated and the party is not prepared to accept their recommendations.
As the UNP tried to work its way out of the problem over Mr. Mendis, President Kumaratunga on Wednesday appointed a ministerial team to study and counter UNP propaganda.
The President acted after Minister Richard Pathirana pointed out that the local media and the opposition are persisting in a campaign of allegations against the PA.
Mr. Pathirana said charges of corruption had been made against several Ministers and a joint effort should be made to counter this offensive.
The President then appointed a committee comprising Minister D.M. Jayaratne, Jeyaraj Fernandopulle, Mangala Samaraweera, Kingsley Wickremaratne and S.B. Dissanayake to counter the campaign against the government.
At the same time once again the President pointed out the importance of bringing in the resolution against former Minister Mendis.
She said though the resolution is listed under the name of Prime Minister Sirima Bandaranaike, it could be presented in Parliament either by Minister G.L. Peiris or Richard Pathirana.
The Cabinet also discussed as to how the behind the scene story of the "Janamandali" programme where President Kumaratunga was interviewed over Rupavahini, was leaked to The Sunday Times.
Minister Mangala Samaraweera said two freelance journalists had been smuggled into Temple Trees with the Rupavahini crew and an independent inquiry was being held to determine as to how it happened.
Mr. Samaraweera also suggested that individual Ministers should take action against newspapers when specific charges of corruption were made against them.
President Kumaratunga who was not keen to promote Minister Samaraweera's idea said that could be considered later.
Mr. Samaraweera also met Directors of Lake House recently behind closed doors.
The main indictment against Lake House Directors was that they were not delivering the goods for the government. The Minister expressed his dissatisfaction over all the newspapers published by Lake House except the Daily News, which in his opinion is doing a good job for the government.
The government, it appears, needs the fullest co-operation of Lake House for propaganda work as it has decided to hold Provincial Council elections in June this year preceded by a non-binding referendum to push the political package.
The Minister in short told the Lake House Directors to clean up the institutions probably fearing that some UNPers there might rock the boat.
At a UNP Working Committee meeting, party leader Ranil Wickremesinghe said he considered 1998 as an election year.
"The government is not in a position to put off the Provincial Council elections, which are due in June," he said.
However the Southern Provincial Council could function for some time beyond June since it was dissolved during D.B. Wijetunga's time, the party leader said. In addition to this, the government is pushing for a referendum. The UNP is now ready to face any election, he said.
He also said the electoral organisers would be finalised shortly and that he had already appointed cluster organisers.
The UNP in the meantime had worked out a plan of action to accelerate its offensive against the government and this includes the setting up of a management committee and a propaganda unit, both headed by Mr. Wickremesinghe.
The UNP is moving to attract more professionals to the Working Committee. A well known architect is one of them.
Mr. Wickremesinghe had also proposed that the UNP should oppose the privatisation of AirLanka.
The party is to write to the Chairman of the Public Enterprises Reforms Committee, opposing divestiture of AirLanka shares.
The UNP said it had learnt reliably that the government was negotiating with Emirates.
The UNP views this seriously and states that any future government would abrogate any agreement entered into with a foreign airline. By such an act the UNP states that AirLanka would compromise most of its facilities available at the Bandaranaike International Airport.
On the other hand it said the foreign partner would benefit by the facilities enjoyed by AirLanka in other countries, and the privatisation should be stopped forthwith in the interests of the country.
With this Mr. Wickremesinghe is planning to steer the party to achieve some of his goals in 1998.
At the meeting, former Minister Dharmadasa Banda pinpointed some of the shortcomings associated with the cluster system. The remarks were apparently aimed at General Secretary Gamini Atukorale. But Mr. Wickremesinghe stepped in at this stage to sort out matters.
At the same time Charitha Ratwatte's name was mentioned as the Secretary Co-ordination.
With Liam Fox now out of the na tional scene in Britain, the US is showing a greater interest in bringing about a dialogue between the PA and the UNP on the ethnic conflict, but the ruling party is insisting that the main opposition must submit alternative proposals before January 31.
A delegation from US House of Representatives international relations committee met government and opposition leaders for talks on the current political situation here.
The delegates, Michael Eunis and Robert A. Hathaway, along with US Ambassador Shaun Donnelly, were apparently trying to encourage a healthy dialogue between the two major political parties, the PA and the UNP.
Minister G.L. Peiris met them for lunch at the American Ambassador's residence, while the UNP's Ronnie de Mel and Rohitha Bogollagama had separate meetings with them.
The US delegation had apparently offered its good offices to bring about a healthy dialogue between the two major parties to find a lasting solution to the ethnic crises.
However, they felt that the progress achieved by the government in its bid to implement a political solution was not sufficient.
When the UNP representatives put across their line of thinking that the government should have a dialogue with the LTTE and there should be international pressure on the LTTE to come to the negotiating table, the US delegation said the US could not talk to the LTTE since it is banned in that country.
When a UNP spokesman pointed out that the LTTE was not banned in Sri Lanka, the US delegates were surprised to hear that and double checked with Richard Smythe, a senior US diplomat.
Meanwhile, the government is planning to go ahead with the non-binding referendum to push the package if the UNP fails to come up with alternative proposals before the end of this month.
The government's position is that it discussed all matters for two long years and in the circumstances it could not allow the UNP to drag it any more.
It is believed now that the UNP is somewhat apprehensive of a non-binding referendum and now a greater consensus is emerging among Parliamentarians that both parties should permit them to act more independently and give liberty even to cross over, as that would become a means of avoiding a non-binding referendum.
This would bring the system more in line with public consensus reflecting their will through members of Parliament and may help to build a healthy bipartisan approach in governmental affairs.
Besides this, the focus these days is on the local elections in Jaffna.
More than electioneering in Jaffna, Tamil parties are interested in the petition filed by the TULF against the rejection of its list for the Jaffna MC.
In the petition, TULF has cited the EPDP and the PLOTE as respondents.
The PLOTE consulted eminent lawyer Faiz Musthapa, PC, on the matter. He apparently asked as to who was appearing for the TULF. When it was maintained that it was Jayampathy Wickramaratne, the lawyers in Mr. Musthapa's chambers had commented that the government would probably not oppose the TULF petition.
What might happen is that the Election Commissioner would give an undertaking to the Court that he was prepared to accept the TULF's nomination papers.
But now the PLOTE has filed a counter plaint stating that the Election Commissioner's decision to reject the TULF nomination papers was correct.
This would prevent the case being dismissed on an undertaking given to Court by the Commissioner of Elections since the Court in any case would be compelled to inquire into the counter plaint filed by the PLOTE.
The inquiry may result in a postponement of the local elections for the Jaffna Municipality and the Valigamam North Pradeshiya Sabha.
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