Observers wonder why 2015 investigation into Chinese payments to Rajapaksa was dropped

Observers wonder why 2015 investigation into Chinese payments to Rajapaksa was dropped

Colombo, July 4 ( The Sri Lankan Prime Minister, Ranil Wickremesinghe, told parliament on Wednesday, that the Criminal Investigations Department (CID) would launch a probe into the New York Times allegation that the China Harbor Engineering Company (CHEC) had contributed US$ 7.6 million to the 2015 election fund of former President Mahinda Rajapaksa.

But political observers wonder what happened to the investigation launched into a similar complaint made in July 2015? At that time it was alleged that the CHEC had given LKR 149 million or US$ 1.1 million to Rajapaksa through various proxies. Reuters had reported it and so did the state run Daily News. The reports quoted the police spokesman Ruwan Gunasekara to say that CID and the Central Bank’s Financial Investigating Unit (FIU) were investigating.

Political observers suspect that the 2015 investigations were stopped because at the time of the transfer of power in January 2015,  Prime Minister Ranil Wickremesinghe had promised Mahinda Rajapaksa that he and his immediate family would not be victimized.

The other reason could have been that the process of mending fences with China had begun, and the pre-Presidential election hostility to China for its closeness to the Rajapaksas was being replaced by a spirit of accommodation.

With Sri Lanka and China cozying up to each other, China’s projects, including the US$ 1.4 billion Colombo Port City project, executed by the CHEC, began humming again.

In fact, over the past three years under the Sirisena-Wickremesinghe regime, China has secured more projects in rail and road construction that it did under Rajapaksa. The Hambantota port was given out on lease to the Chinese company CMPort on a 99 year lease. As of now, 40% of the high rise housing construction is being done by Chinese companies.

Cheng Xueyuan, Chinese Ambassador to Sri Lanka with Prime Minister Ranil Wickremesinghe

Political Exigency 

If the issue of the CHEC making under the counter payments to Rajapaksa is being raked up again now, it is because of an anxiety to fix Rajapaksa before the provincial council elections in 2019 and the Presidential and parliamentary elections in 2020.

There is a sense of urgency because the Rajapaksa brothers appear to be on a comeback trail following their party Sri Lanka Podujana Peramuna’s stunning success in the February 2018 local government elections. The SLPP was streets ahead of President Maithripala Sirisena’s Sri Lanka Freedom Party (SLFP) and Prime Minister Ranil Wickremesinghe’s United National Party (UNP).

Any candidate put up by the SLPP is expected to win the January 2020 Presidential election.

The NYT report, which, according to Rajapaksa, had been facilitated by a section of the government, came in handy to corner rival Rajapaksa again. It is one more serious corruption charge against him. It is sanctified by appearance in the prestigious newspaper NYT.

May Strain Sino-Lankan Ties

Be that as it may, Sri Lanka appears to be on a path of confrontation with China. But the cost of the confrontation may be high.

China is Sri Lanka’s largest foreign direct investor and aid giver. It is handling prestigious and mega projects like the Colombo Port City and the Hambantota port ,both designed to make the government’s dream of turning Sri Lanka the logistics and financial hub of South Asia.

The Chinese embassy has already taken exception to the way the NYT article is playing out in the Sri Lankan political landscape. It has issued a strong statement against the NYT story saying that it is based entirely on falsehoods.

The Chinese Foreign Ministry spokesman, Lu Kang, has dubbed the NYT report as “fake news”.

The Chinese Ambassador in Sri Lanka is said to have taken up the matter with the government. The envoy and representatives of the CHEC and CMPort are to meet the Lankan media on Thursday to clarify matters.

According to informed sources, CHEC and CMPort have both expressed deep disappointment about government ministers making public statements against them merely on the basis of a newspaper report.

It appears that in its political pursuit of Rajapaksa, the Sri Lankan state may end up antagonizing China, its principal financial benefactor. A case of throwing the baby with the bathwater?

(The featured image at the top shows Prime Minister Ranil Wickremesinghe with former President Mahinda Rajapaksa))