The whole process and final agreements with regard to the the largest single grant ever received by Sri Lanka that was awarded by the Millennium Challenge Corporation (MCC) were done under the guidance of the Attorney General and was well within the legal framework, a statement from the Ministry of Finance said.
"The Attorney General is in the opinion that Agreements are in order and there exists no legal impediment to execute the same. A Cabinet Memorandum along with the final drafts of the Agreements was submitted on 31.05.2019 to the Cabinet of Ministers. The Cabinet appointed a committee for further discussions of the matters in detail. Subsequently, the Ministry of Finance submitted the Cabinet Memorandum dated 05.07.2019 seeking the approval of the Cabinet of Ministers for signing the Compact Agreement and the Programme Implementation Agreement. The Cabinet of Ministers has granted its approval for signing above Agreements on 29.10.2019.," the statement said.
The Millennium Challenge Corporation (MCC) is a bilateral United States Foreign Aid Agency established by the United States Congress in 2004, applying a new philosophy towards foreign aid. It provides time limited grants and assistance to developing countries that meet rigorous standard for good governance, from fighting corruption to respecting democratic rights.
On the request of the Government of Sri Lanka (GoSL), the MCC undertook a “constraints to economic growth analysis” in year 2016. MCC and the GOSL subsequently decided to focus on the land and transport sectors, which were identified as binding constraints to growth. The constraints analysis concluded that traffic congestion in the Colombo Metropolitan Region, poor transport connectivity between Provinces, and weakness in land administration constrain economic growth. Accordingly, the MCC agreed to grant USD 480 million for financing the above projects.
Final negotiations on the Compact were conducted in October 2018 between the MCC and a Cabinet approved GoSL delegation which consisted of officials from the relevant Ministries and Government Agencies for implementing the selected projects including a representative from the Attorney General’s Department.
Land Administration
The MCC Sri Lanka Compact has no bearing on land ownership, administration and management in the island.
The USD 67 million land administration project has an estimated economic rate of return of 30% and aims to expand and improve existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. The project will initially focus on districts in the Central, North-Western, North-Central and Eastern Provinces.The project will also help the Government identify under-utilized state land that can be put to more productive use and maximize rents from lands that the government leasesLand activities will help the Government create an inventory of state lands, modernize methods of valuing lands, strengthen tenure security for smallholders, women, and firms, and digitize deeds records so that they are less vulnerable to damage, theft, and loss.
The US Government will not buy, sell, or own any actual land - or take control of any actual land - under this agreement, the US Embassy said in a statement recently.
Transportation
The Transport Project is budgeted at $350 million and aims to improve urban and rural mobility in the Western, Central, Sabaragamuwa, and Uva Provinces in two ways. First, it will ease traffic congestion and improve public transportation in the Colombo Metropolitan Region. Getting transport right is key to making Colombo a more livable, well-functioning city.
Second, the Transport Project will improve connectivity between the central part of the country and ports and markets in the Western Province. The Transport Project will upgrade transport infrastructure and systems and has three activities.
USD 160 million has been allocated for an Advanced Traffic Management System (ATMS) for the Colombo Metropolitan Region. ATMS combines physical improvements and civil works with technology enhancements to optimize the efficiency of the existing road networks along eight heavily traveled corridors that link central Colombo with its suburbs.
The activity will also introduce modern technologies for vehicle detection, real-time data collection and analysis of traffic flows; an interconnected traffic signal system; and dedicated bus priority systems throughout the network.
The USD 50 million bus service modernization activity would improve bus services in greater Colombo. Bus service accounts for 45 percent of all passenger miles traveled in greater Colombo and disproportionately serves low-income individuals. The activity will introduce automated fare collection systems based on smart cards; create single schedules for multiple bus operators running on a given route; introduce GPS bus tracking to enable transit operators to know buses’ locations and determine if they are operating according to schedule; and improve safety and accessibility for women, the elderly, disabled and other vulnerable groups.
The USD 140 million rural transport activity would upgrade approximately 131 kilometers of interprovincial roads in the Central Ring Road Network connecting the Central, Sabaragamuwa, and Uva Provinces with ports and markets in the Western Province. MCC will rehabilitate various segments of the network.
Passengers and goods from the Eastern Province also travel through this network. Improvements to this network would net several benefits as the central region is a center of the agriculture and tourism industries, is one of the most ethnically diverse, and has large concentrations of poor.
Related News:
Cabinet approves US$ 480 million MCC grant
MCC compact to improve 300 km of urban and inter-provincial roads in Sri Lanka
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