Colombo, September 20 (Daily Mirror/Daily News): One of the main tasks of Sri Lanka Podujana Peramuna (SLPP) Presidential hopeful Gotabaya Rajapaksa would be restoring the relationship with China, spokesman for the SLPP presidential candidate, Keheliya Rambukwella said today.Addressing a media briefing, he said the relationship with China had been tarnished on numerous occasions during this government.“For instance, Prime Minister categorically said in 2015 that they would stop and abandon the Port City project subsequent to which the project had been stopped for 18 months,” MP Rambukwella said.“The other instance is that when President Maithripala Sirisena said during the opening of Lotus Tower that a Chinese company had run away with Rs. 2 billion. This was uttered keeping the Chinese Government representative beside President Sirisena, MP Rambukwella added.
He was asked whether it was something that they should restore and that was what Gotabaya’s one of the main task would be.
Mahinda Rajapaksa’s Rejoinder
Former President and Leader of the Opposition Mahinda Rajapaksa said the allegation against a Chinese company of having disappeared with Rs. 2 billion that was meant for the construction work of the Lotus Tower “is a horrendous insult to China.”
“To say that a major Chinese Government-owned conglomerate had disappeared with Rs. 2 billion belonging to the Sri Lankan Government is a horrendous insult to China. This insulting statement was moreover made in the presence of the Chinese Ambassador. We can understand why the Government would want to sling mud at the political opposition on the eve of a decisive Presidential Election. But to publicly insult a major world power that has always been friendly and helpful to Sri Lanka, is unconscionable,” Rajapaksa said in a statement issued yesterday.
According to Rajapaksa, the comments made by President Maithripala Sirisena at the opening of the Lotus Tower was made due to wrong information being conveyed, and he expected the relevant individuals to move quickly to issue a correction. “Since all documents pertaining to the Lotus Tower project are available with the TRC and the Auditor General, ascertaining the truth with regard to this matter is not a difficult task at all,” he said.
Rajapaksa said in his statement that President Sirisena’s accusation that the Chinese contractors involved in the project – a company named ALIT – had taken an advance payment of Rs. 2 billion (Around $ 15 million at that time) and disappeared was flashed around the world by international news agencies, and that it became a major news story in many Asian countries.
The former President said that at the time this payment was made in 2012, the Telecommunication Regularity Authority (TRC) was in charge of this project, which was directly under him as President, which was why he was making a clarification regarding this matter.
“In 2012, the total cost of the Lotus Tower project was estimated at $ 104.3 million. The Exim Bank of China agreed to provide a loan facility of $ 88.6 million, up to 85% of the total project cost. The remaining 15% of the cost had to be borne by the TRC. The contractors for projects financed by the Exim Bank of China are nominated by the Chinese Government. Accordingly, the China National Electronics Corporation and ALIT were nominated by the Chinese Government,” the former President said.
He said that while the Lotus Tower was due to be completed by 2015, due to the Yahapalanaya Government causing delays in the project, and due to lapses on the part of the contractor, it could not be completed according to schedule.
“In projects of this nature, the 15% ‘local component’ has to be paid to the contractor upfront as an advance payment. Documents confirm that on 9 October 2012, the TRC had credited $ 15 million (Rs. 2 billion) to the account of the main contractor China National Electronics Corporation. The latter company is still the main contractor of the project. The advance payment of Rs. 2 billion was never paid to the other contractor, ALIT. The relevant documentation will show that from day one, all payments had been made to the account of China National Electronics Corporation.”
The statement said that the two contractors recommended for the Lotus Tower projects are 100% Chinese government-owned conglomerates, and that the active party doing the contract was always the China National Electronics Corporation and not ALIT.
The former President also accused the Yahapalanaya Government of declaring open all the projects started by his Government, including the Colombo Lotus Tower project.
“The Lotus Tower can generate enormous revenues for the Government by providing telephone, television and radio broadcasting services, and also by attracting local and foreign tourists. But its cost has been less than a seventh of the cost, for example, of the privately-owned Shangri La hotel project in Colombo. The Lotus Tower is, therefore, an excellent investment. This is also an edifice that will symbolise Sri Lanka, much like the Eiffel Tower in France.”
Rajapaksa said that the unfounded allegation of the missing Rs. 2 billion was made at its opening ceremony, in order to prevent the credit for constructing such a national asset from going to the SLPP and the Joint Opposition.
“What we saw happening was no different to throwing stones at a neighbour’s new car out of sheer jealousy. For more than five years, we have heard a lot about golden horses, Lamborghinis, and bank accounts with a balance of $ 18 billion but this is the first time that anybody heard of a Chinese company that had disappeared with Rs. 2 billion belonging to the TRC. “
UNP Govt’s View
The Lotus Tower, expected to become a Colombo landmark, is entangled in a web of cost overruns and unexplained financial transactions with the Government committed to repaying a huge debt for the project, the state-owned Daily News reported.
Although the Sri Lankan government had paid an initial deposit of Rs. 2 billion to a Chinese company, there is no record of what happened to that money to date, Government sources told Daily News yesterday. President Maithripala Sirisena himself alluded to this controversy when he ceremonially commissioned the Lotus Tower yesterday.
These sources pointed out that the Lotus Tower was finally completed and vested with the people this week with the government having saved a huge amount of money for the country which would have been lost due to a controversial project agreement. The original estimated cost of the Lotus Tower was Rs. 19 billion and the Chinese Exim Bank had agreed to grant this sum to Sri Lanka. The contract for the construction of the tower was signed on January 03rd 2012 with China National Electronics Import and Export Corporation (CEIEC) being the general contractor, and with the Chinese company and the Telecommunications Regulatory Commission.
However, investigations carried out in 2015 when the new government came to power, revealed that there was no information regarding this Chinese company which was a party that signed the agreement. Government officials said that this was notified to the Chinese Government by Sri Lanka. However, even the Chinese Government could not come up with any information regarding this Chinese company either within or outside of China. Even the address that was given in the agreement with regard to this company appears to be a fake address, officials told the Daily News.
The initial deposit of Rs. 2 billion paid to this company by the Sri Lanka Government is also unaccounted for and no one knows what happened to it. Thereafter in November 2017 this company was removed from the tripartite agreement and as a result the Chinese EXIM Bank had suspended the loan facility due to be given to Sri Lanka. Thereafter, the Rs. 16 billion that was scheduled to be granted to Sri Lanka by EXIM Bank was limited to Rs. 12 billion. Howewver, by then Sri Lanka was already paying the Rs. 2400 million loan repayment annually. Sri Lanka had paid the loan installment of Rs. 2400 million for 2018 and Sri Lanka needs to keep paying this sum annually for the next 10 years. The payment for the first half of 2019 amounting to Rs. 1200 million has already been paid.
It was in such a situation that the TRC invested Rs. 4 billion to the Lotus Tower project saving the country a huge amount.
The base circumference is 45 meters and it stands at a height of 356 meters. The main feature of this tower is the transmission tower and the antenna coverage length is around 90 meters.
The digital antenna covers a distance of 60 km to the north, 60 km to the South and 50 km to the East and 15 km to the West. This will provide transmission facilities to 20 television stations and 50 FM channels.
The initial design for the Lotus Tower was done in 2008, while construction commenced in 2012. The Moratuwa University provided the main consultancy services with the expertise from around 70 engineers. The Lotus Tower provided an ideal platform for many engineering students to gain experience, Daily News said.