Sep 18, 2019

MR responds to 2b fraud allegation Featured

Opposition Leader Mahinda Rajapaksa has made a statement in response to the President's statement at the opening ceremony of the Lotus Tower in Colombo.

Speaking at the opening ceremony of the Colombo Lotus Tower, the President made a statement to the effect that back in 2012, one of the Chinese contractors involved in the project ,a company named ALIT ,had taken the advance payment of Rs two billion (Around 15 million USD at that time) made by the Telecommunications Regulatory Authority (TRC) and disappeared.

In the statement made by the Opposition Leader he mentions that  the documents show that on October 9, 2012, TRC sent Rs. 2 billion  to the account of the main contractor, China National Electronics.

Mahinda Rajapaksa further says that a sum of Rs. 2 billion has been paid only to China National Electronics, the main contractor, for the construction of the lotus tower .

At the time that this payment was made in 2012, the TRC which was in charge of the project was directly under then President Mahinda Rajapaksa.

“Therefore I wish to make a clarification regarding this matter. In 2012, the total cost of the Lotus Tower project was estimated at 104.3 million US Dollars. The Exim Bank of China agreed to provide a loan facility of 88.6 million USD or upto 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 Lotus Tower was due to be completed by 2015, but due to the yahapalana government causing delays in the project and due to lapses on the part of the contractor, it could not be completed according to schedule,” Rajapaksa said.

He said that 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 USD (Rs. two 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. two 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,” he said.

Rajapaksa further noted 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.

“To say that a major Chinese government owned conglomerate had disappeared with Rs. two 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,” he said.

Rajapaksa said that the unfounded allegation of a Rs. two billion fraud in the construction of the Lotus Tower 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.

He also said that in April 2019, the Auditor General published a 670 page special report on the Lotus Tower project, but it makes no mention at all of a Chinese contractor who disappeared with Rs. two billion.

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