Parliamentarian Dr. Harsha de Silva created quite a stir in Parliament yesterday when he alleged that Prime Minister Mahinda Rajapaksa, in 2007 as President, had written to his US counterpart George W. Bush urging for the now vilified Millennium Challenge Corporation (MCC) compact for Sri Lanka.

De Silva implored the government to move away from falsification and conspiracy theories regarding international agreements.

The MCC grant of USD 480 million to Sri Lanka may not be accessible for much longer as the authorities in Washington are due take a decision on this matter soon.

The new government is yet to convey its final decision to MCC authorities in Washington as the Auditor General is currently reviewing the special committee report on the draft agreement.

The US Embassy said the MCC compact will directly benefit over 11 million Sri Lankans and meaningfully stimulate economic growth. It is a substantial grant of over 5 years, equivalent to USD 22.43 for every Sri Lankan.

The larger part of the MCC Compact, the USD 350 million transport project, focuses on modernising bus transport and improving traffic management systems, which would contribute towards crucial improvements in public transport and provide tangible benefits to the poor.

A small land project—envisaged amounting to USD 67 million—seeks to improve the land administration policy in Sri Lanka. Specifically, it seeks to map and survey state lands, strengthen government capacity and provide help with the digitisation of deeds.

The MCC Board of Directors will be meeting soon in Washington to arrive at a decision on the Sri Lanka issue among other matters but the government is still to arrive at a decision on accepting the grant, official sources said.

However, the present government is not prepared to drop the USD 480 million grant, especially at a time when the country is facing a severe balance of payment crisis, a senior official disclosed.

The Cabinet of Ministers is expected to reach a consensus as to whether it is feasible to approve it or not under the present foreign reserve position, a senior official closely connected to the negotiations divulged.   Making a startling revelation, former State Minister Dr. Harsha de Silva told parliament that the present Prime Minister Mahainda Rajapaksa, the then president, had urged US President George Bush to “please give us the MCC”.

He said the move was “unprecedented” but had been taken by Rajapaksa though the proposed agreement subsequently came to be much vilified during the recent election campaign.

“The Mahinda Rajapaksa government really wanted to obtain the MCC Compact. They carried out a substantial amount of preparatory work and had multiple meetings and presentations but due to cheap politics, it was branded as one of the most harmful international agreements when our government pursued the same compact,” he added.

He further observed that it was former Central Bank Governor and current State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal who was at the forefront of the government's campaign for MCC in 2005.


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