Apr 08, 2017

Malik trying to evade issues & sign H'tota agreement!

Minister Malik Samarawickrama stated that the agreement handing over the Hambantota harbour to China Merchant Company can be signed this week.

Two representatives from China Merchant have arrived in Colombo and the minister said the agreement needs to be signed before they leave.

Meanwhile, the report of the cabinet sub-committee appointed to  look into this agreement was handed over to the President on Wednesday.

Although ‘Sathhanda’ had forwarded a questionnaire to Minister Samarawickrama regarding this agreement, to date the minister has not responded. The questions submitted by Sathhanda are as follows:

Many issues - Malik silent

It is evident that the Hambantota agreement has become a two way trap which is definitely detrimental to the people of this country. However, the manner in which this government operates is where the tail is unaware of what the dog does and vice versa.

As such we have no faith in the government’s actions.

However, with Sri Lanka’s strategic positioning a port positioning is of great significance and as such, it cannot be accepted that the government is trapping the people in this  tangled web. In Buddhism it is described as ‘Antho Jata Bahi Jata’ meaning tangled inside tangled outside.  

Moreover, being a regime that has based its rule on ‘good governance’ the government should be ashamed of having put this country in such a predicament. But, as history has proven, those governing the country, seem to have no shame or conscience and this is something that we have seen over the years. However, the civil society that enforced and supported the change are today observing silence in all these matters and eventually it is we who must take on that task.

Respond and show your commitment:
Therefore, it is upto those concerned to respond to these questions regarding the Hambantota port and prove their commitment to the people of this country as it is their right to know.

1. This question is based on the loans obtained for the construction of the port and the repayment of these loans.

■ Is it correct that the loan obtained for the construction of the Hambantota harbour is $1,332.8 million? 

■ From that amount, is it correct that the $ 306.7 million obtained in 2007 was based on an interest rate of 6.4%, while the rest was obtained on an interest rate of 2%? If not, at what rate of interest was the loan obtained?  

■ If the above rate of interest is correct, then the normal rate of interest is around 3.1% and according to the repayment plan, what is the full amount that has to be paid, inclusive of the interest? 

■ According to the information produced the amount is $ 1,761.25. Is this correct?

■ Of this loan amount, how much has been repaid so far?

■ Are the figures that indicate that we have repaid $ 498.53 million so far correct?

■ If it is correct, the total amount payable is $ 1,261.72 and how long will it take to repay this amount? 

■ Is it correct to assume that it will take around 20 years to complete repayment of the loan?

■ In comparison to the amount already repaid, what is the assessment that was done where it was indicated that the balance loan amount could not be paid within the next 20 years?

■ What is the income generated by the Hambantota harbour during 2014, 2015 and 2016?

■ Are the figures published, indicating that the Hambantota harbour made Rs. 900 million in 2014 and Rs. 1.2 billion in 2015 correct?  

2. This set of questions are based on proposed agreements in relation to the Hambantota port.
■ What are the issues in the agreements signed between the China Harbour Co and China Merchant Co and the previous regime pertaining to  Supply Operate and Transfer (SOT)?

■ Is it correct that according to these agreements, for the 56 hectares provided to these companies over a period of 40 years, there was a possibility of earning $ 1.96 annually?

■ With every loading and unloading of a container, is it correct that the government receives  half of the amount which is $ 2.5?

■ Is it true that according to the agreement the Port Authority had the opportunity to earn profits through its container terminal and other terminals and the 1,300 hectare trade zone?

■ Will the country stand to gain greater profits with the new agreement in comparison to the previous agreement?

■ Under the current regime, whey was the other proposal forwarded by China Harbour for the Hambantota harbour rejected?

■ During the 50 years will the port taxes be charged and will shares be divided on a ratio of 65% to the Chinese and 35% to the Port Authority.

■ According to that agreement, did Sri Lanka stand to gain $ 3,281 million?

■ In relation to the current agreement, what are the benefits of the proposed agreement? 

3. This set of questions are based on the proposed harbour agreement.
■ Was the agreement with China Merchant Holdings reached based on accepted tender procedures? If so what are they?

■ According to the agreement, who did the valuation that determined that Sri Lanka is to receive $. 1.1 billion? How was it done? What were the factors that were considered?

■ Will the money obtained from leasing out the port be sufficient even to cover the loan repayment? How will the rest be covered?

■ At least were factors such as the commercial value of the port assets or the scarcity  of the lands in the area taken into consideration?

■ Under the agreement, what extent of land belonging to the Hambantota harbour is to be given to China Port Merchant Holdings?

■ Is it true that according to the prepared plan valuation has been done only for 500 hectares and nothing is mentioned in the agreement regarding the rest of the lands?

■ What is the annual lease amount for the 500 hectares leased on a 99 year lease agreement?  Is the amount Rs. 494 million?

■ Currently, for the 12 hectares that is leased to Laughs Gas Company, the annual lease payment is $ 50,000 per hectare. That is Rs. 7.5 million. If it was given to the Chinese Company in 2017 at the same rate it was given to Laughs Company in 2013, (at the rate of $50,000 per hectare) they would receive around $ 15,000 million.

Accordingly, the loss per year is $ 14,506 million. When you calculate it for 99 years, the loss amounts to $ 1,436,094. When preparing the agreement, did you pay attention to this factor?

■ According to the agreement, the profits of the venture will be divided on a 80 -20 ratio between the Chinese company and the Port Authority,  but it will only be after 15 years. However, within this agreement it states that these profits will be divided provided the venture is profitable. Under these circumstances, will the Port Authority gain any profit? What is the guarantee they will? 

■ Will the Chinese Company and the Sri Lankan government have to equally bear the maintenance costs of the port? In the event the government is unable to meet its share of the maintenance cost, will it have an impact on the government’s share of the venture? If no, what is the guarantee it will not be so?

4. These set of questions are based on the issue of national security and legal problems within the proposed agreement.

■ Through this proposed agreement, is there a possibility of the country’s national security being compromised?

■ Can you explain how it will not affect the country’s national security through handing it over to pilotage service company?

■  Similarly, there is a tendency that through this agreement it will create  positions including the Harbour Master position, which is only one person for the whole country.  Do you agree that this will create a situation where positions with similar powers as the Port Authority will be created within the private sector?

■ There is a clause in the agreement that states that within the first ten years a certain portion of the shares held by the Chinese company can be sold to a Sri Lankan citizen, but, why should the price be determined through an international valuation?  Why isn’t this international valuation included in this agreement? 

■ Excluding the customs and Naval responsibilities, all other duties have been entrusted to the Chinese company through this agreement. Do you agree?

■ Is it correct that even all port security responsibilities have been entrusted to the Chinese company?

■ Finally, can you explain what the Port Authority stands to gain through the agreement’s part iiv?  

Therefore, dear good governance gentlemen, if you can provide answers to these questions, we are certain this country can be saved from this tangled web, the Hambantota Port agreement. 

We will present these questions before the public until Special Assignments Minister Dr. Sarath Amunugama or Development Strategies and International Trade Minister Malik Samarawickrama responds to these questions regarding the Hambantota Port agreement.