jbond197
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Rajapaksa government selling Sri Lanka to Chinese companies-Harsha
UNP parliamentarian Dr. Harsha de Silva says the Rajapaksa government is making way for the Chinese to firmly take control of the Sri Lankan economy.
He notes that the repercussions of this short-term strategy to open all stops for the Chinese without any concerns for the geopolitics or the regional economic integration will be seen in the not so distant future.
Issuing a statement about the key projects handed over to the Chinese by the government, Dr. de Silva states that what they suggest is that the present government is not interested in genuine foreign direct investments but instead is more than keen to go with commission based Chinese funded projects to be undertaken at high costs by Chinese contractors.
Following is the full text of the statement:
Todays official announcement by Aitken Spence that China Merchant Holdings is buying its 30 percent stake as it was pulling out of the consortium to build and operate the Colombo South container terminal for 35 years is further evidence that the Rajapaksa government is making way for the Chinese to firmly take control of the Sri Lankan economy. This goes to show the absolute failure of the regime to attract genuine investors for the post war development phase of Sri Lanka in the background of the Expropriation Act and other confidence eroding policy prescriptions.
The direct reasons are speculated as China Harbour Engineering Company that has been awarded the contract to construct the terminal has escalated the costs by some 35 percent to USD 350 million while at the same time China Development Bank which had originally agreed to fund the debt component of the project has demanded greater security for the loan causing Aitken Spence no option but to pull out. It must be noted that all this has happened while the Ports Authority has allegedly begun to construct the so called East terminal in complete contravention to the agreements originally signed that gave certain revenue guarantees to the South terminal concessionaires.
The cost increase by China Harbour is more than 100 percent form the original estimate of USD 154 million as envisaged in the ADB agreement of February 2007. There seems to be a history of high costs and projects being awarded without tender to this company in the recent past. According to reports China Harbours bid to construct the breakwater of the Colombo South port was some 70 percent more than the lowest bid and given the transparent bidding conditions of the ADB they were unable to secure the contract. However the construction of the first phase of Hambantota port went to China Harbour for USD 360 million without tender plus the subsequent USD 140 odd million for additional work including the blasting of the phantom rock in the seabed. China Harbour has, according to its own website but not revealed by the government thus far, already secured the second phase of the Hambantota port for USD 810 million. It is unknown if any tenders were called
for this second project. In addition China Harbour has been awarded the construction of the Mattala airport at a cost of USD 200 million. As if not enough, the Ports Authority recently stated that China Harbour has also been awarded the contract to reclaim the sea adjoining the Colombo South port at a cost of USD 750 million. Again no one knows if any tenders were called.
What all this suggests is that the present government is not interested in genuine foreign direct investments but instead is more than keen to go with commission based Chinese funded projects to be undertaken at high costs by Chinese contractors such as China Harbour Engineering. Last weeks much hyped USD 105 million project to build an ego-boosting tower of some sorts is also a Chinese project and so are almost all projects that are being awarded on an almost daily basis, be it roads, bridges, buildings, civilian aircraft or refurbishing military aircraft.
The repercussions of this short-term strategy to open all stops for the Chinese without any concerns for the geopolitics or the regional economic integration will be seen in the not so distant future.
China had 55% but third partner had sold their shares to that Chinese company. now Chinese have 85% share.
