Deputy Minister of Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs Dr Harsha de Silva yesterday alleged that an agreement with the Chinese as regards the funding of Hambantota Port had been altered at the expense of the country.
Economist Dr. Silva said that the alteration had resulted in the country having to pay a staggering 6.3 per cent fixed interest on US 306 mn loan, whereas the original agreement envisaged payment of variable interest, hence just 0.6 percent in accordance with LIBOR (London Interbank Offered Rate).
The Deputy Minister emphasised that Sri Lanka couldn’t benefit from lower interest rate due to controversial change in the agreement at the behest of the Chinese, a matter of grave concern.
Responding to a query, the MP said at the time Sri Lanka had accepted the original loan agreement on Oct. 17, 2007, LIBOR had been fixed at 5.5 percent plus 0.9 per cent. Then LIBOR had crashed and quickly come down to about 2.0 per cent prompting the Chinese to call for a revision of the agreement, the deputy minister said.
As the deputy to Prime Minister Ranil Wickremesinghe, who holds policy planning and economic affairs portfolios, Dr. Silva said that he would make further inquiries. The Central Bank and the Securities and Exchange Commission, too, come under Premier Wickremesinghe’s purview.
The DM said that the government would take up the matter with China.
According to him, the agreement was altered on Sept 10, 2008. Pointing out that in accordance with the agreement, Sri Lanka had to make the payments over 15-year period, the UNPer said that the country was paying a heavy price due to the altering of original agreement.
The DM said that the issue of that particular component of Hambantota funding had been raised by him both in and outside Parliament on many occasions, but the previous government refrained from responding to his queries. ‘I came across the relevant file a couple days ago. Perhaps, there will be more revelations in the coming days."
The new government would inquire into fraudulent activities that couldn’t be seen by the ordinary people, the DM said.
Responding to a query, he said that the Commission to Investigate Allegations of Bribery or Corruption was turning a blind eye to what was happening.
