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The leafy village of Beragama in Hambantota district is a throwback to a time when Sri Lanka was trying to get on to the Chinese development highway.

Far from the cranes, concrete high rises, widening highways and Chinese workers that are now a mainstay in many parts of the island, Beragama, 250 kilometres south of the capital Colombo, is still covered by verdant paddy fields.

Villagers mostly use old bicycles to get around and the village temple, located at Beragama’s highest point, is still its nerve centre.

But over the top of the temple’s white stupa you can still see the large cranes of Hambantota harbour, built with Chinese funds in 2010 and now operated by China Merchant Port Holdings on a 99-year lease that came into effect last year.

“They have been here since 2008,” says Vimalabudhi Thero, the chief monk at the temple, alluding to the year construction started on the port.

Like investments in the ports of Gwadar in Pakistan and Chittagong in Bangladesh, Hambantota port is a key part of China’s Belt and Road initiative (BRI) that is building infrastructure and boosting regional connectivity and trade across strategic maritime and land routes.

For a decade Vimalabudhi had few problems with the Chinese funded projects that were coming up in Hambantota at break-neck speed.
Then president Mahinda Rajapaksa launched a series of projects in his home constituency. The most visible Chinese backed projects were the new highways, cutting south through the western slopes of the island, two port projects and a new airport, among others.

It was in 2017, when Rajapaksa was defeated, that the monk from Beragama became really concerned. Burdened by heavy debt, the Sri Lankan government was looking for a release valve.

The country owes at least one fifth of its over US$50 billion foreign debt to China. The situation was worsened by a stagnant economy and non-preforming projects like the Mattala International Airport, known as the world’s emptiest airport. The port has recorded negative growth.

A bridge construction in Hambantota, Sri Lanka. The district is a key part of China’s Belt and Road initiative, but there are growing concerns about the project’s environmental impacts. Image: Dhammika Heenpella/Images of Sri Lanka, CC BY-SA 2.0, via IFPRI Flicker

The new government of President Maithripala Sirisena and Premier Ranil Wickremesinghe came up with a plan: they would hand over a majority control of the Hambantota Port to the Chinese in a US$1.2 billion deal.

Vimalabudhi was alarmed that the agreement also included provisions for an additional 15,000-acre investment zone that would cover large portions of land in Beragama. “There were plans to take over land from our villages for this, and from what we could see they were after the most fertile land,” he said looking at the lush paddies outside his temple.

Last year Vimalabudhi was in the forefront of public protests against the investment zone, which ultimately stalled the plans despite the port handover going through. However, the government is yet to scrap the plans so the villagers remain fearful they will still lose their land.

“Look at what they have done to our land, it looks like a giant hedgehog has been here,” says Dharamadasa Banda a 70-year-old villager.

All across Sri Lanka’s Southern Province, large swathes of agricultural land and shrub jungle have been cut open for Chinese backed projects like the extension of a highway and link roads. Inland from the airport, bulldozers are taking the earth needed for the highway with indelible effects.

Trampling elephant habitat

The stretch of the highway linking the empty airport to the port cuts through key elephant corridors. It’s being built by China Communication Construction Company. Three quarters of the 489-hectare project runs through shrub jungle, according to an environmental assessment report obtained by the local rights body Center for Environmental Justice.

“According to the records of the Department of Wildlife Conservation there are more than 400 elephants roaming in the Managed Elephant Range and those moving between the parks also use this area on a regular basis,” the report states adding that animals roam as much as 25 kilometres a day. Between 15-20% of the island’s elephant population could live in the project area, the department estimates.

The airport was also built on elephant habitat, and wildlife officials in Hambantota are frequently called up to chase the pachyderms off the runway.

Lack of information sparks anger and confusion

Information on the environmental impacts of the port and highways has been limited. However, available reports, such as the environmental impact assessment of the Southern Highway extension, or the supplementary environmental impact assessment of the Port City raise serious concerns.

Landslides are one of the major risks identified. A Right to Information request to the Ministry of Higher Education and Highways in August revealed that the authorities had identified 13 landslide prone locations on the 143 kilometre stretch of the Southern Highway between the capital and Matara.

Four of the locations have already experienced landslides along with one other location that was not identified as being in danger. In May 2017, large areas of the highway were flooded during high monsoon rains. One of the lasting images of the floods was the southern exit of the highway with its semi-circular arch half submerged.

“We have never experienced any such thing in this area. The flood waters used to flow downstream to the west in the past. The highway looked as if it was blocking the waters,” said Indrarathne Abeysinghe, who lives near the exit point.

Soon after the floods then Minister of Megapolis Development Champika Ranawaka blamed the disaster on ad-hoc development projects specifically mentioning the Southern Highway as lacking a detailed environmental assessment report. His cabinet colleague Minster of Home Affairs Vajira Abeywardene argued the highway was constructed properly and was not the cause of the floods.

Available environmental assessment reports on the highway do say that the elevated roads could cause obstruction of water flows downstream but also add proper drainage systems have been built in.

There are concerns that the Port City, near the capital Colombo, could create similar problems. This involves large scale land reclamation south of the Colombo harbour and the construction of a new financial district. Coastal communities fear that the one-billion-dollar investment by China Harbour Engineering Company will lead to coastal erosion and harm fish populations. Further inland people worry about growing air pollution and traffic. With 95% of the work on the 2.3 square kilometre reclamation area complete, coastal communities and others now have to wait and see if those fears will come true.

The environmental impact assessment report by the Central Engineering Consultancy Bureau states that they do not foresee “any significant changes to the shoreline”.

*This story was published on The Third Pole.

COLOMBO (Reuters) - Sri Lanka signed two multi-million dollar contracts with Chinese firms for a port upgrade project on Thursday in the middle of a political hiatus that has raised doubts over the legitimacy of the government and the legality of the deals.

The debt-saddled island has long been a target of Beijing’s ambitious Belt and Road infrastructure scheme to connect China with countries cross Asia and beyond, while regional power India has also been vying for deals to counter China’s influence.

But a political crisis triggered by President Maithripala Sirisena’s replacement of Prime Minister Ranil Wickremesinghe with Mahinda Rajapaksa, who was in turn sacked by parliament, has raised doubts over who can legitimately make decisions in the country.

Foreign countries have yet to recognize the new government and Wickremesinghe’s party has said any decisions by Rajapaksa’s cabinet are illegal.

An official at the state-run Sri Lanka Ports Authority told Reuters it signed two contracts with Chinese firms worth over $50 million on Thursday after the deals were approved by Rajapaksa’s disputed cabinet last week.

One of Rajapaksa’s cabinet ministers, speaking on condition of anonymity, also confirmed the deals had been approved by the cabinet, while documents seen by Reuters showed the deals were set to be rubber-stamped at the meeting.

The contracts are a $32 million project to enhance the deep berth capacity of state-run Jaya Container Terminal (JCT) in Colombo with China Harbour Engineering Company, and another one worth $25.7 million for the purchase of three cranes from JCT Shanghai Zhenhua Heavy Industries Co. Ltd for the same project., according to the ports authority official.

Asked about the deals, the former cabinet spokesperson under Wickremesinghe’s government, Rajitha Senaratne, told Reuters:
“We will have to re-examine definitely. They don’t have the legal power to decide.”

The ports authority official said the tenders for the deals had been advertised in state-owned newspapers, as is the norm in Sri Lanka, and that they were sent to a cabinet-appointment procurement panel months ago.

India, which accounts for around 80 percent of Colombo’s trans-shipment business, has raised concerns over increasing Chinese projects in Colombo. 

New Delhi had been pushing Sri Lanka for the award of an estimated $1 billion contract for a second foreign-operated container terminal in Colombo.

But that deal was the subject of an argument between Sirisena and Wickremesinghe just before his ouster, in which Sirisena reportedly said the country couldn’t give any more of its assets to foreigners.

The political instability and economic malaise have raised questions over Sri Lanka’s ability to service large external debt taken to finance reconstruction following the end the civil war in 2009. It owes around $8 billion to China, including state linked firms and banks, official data shows.

The US has put on hold its discussions with Sri Lanka on its potential participation in an American aid initiative on poverty reduction due to the disruption in the country’s democratic process following the ouster of Prime Minister Ranil Wickremesinghe, a senior official has said. 

"The United States believes that the steps taken by President Sirisena were unconstitutional and wants the country to get back to its democratic process at the earliest," the official said. Sri Lanka plunged into a political crisis after President Maithripala Sirisena dismissed Wickremesinghe and replaced him with former strongman Mahinda Rajapaksa.

Rajapaksa has failed to muster support of the majority in the Parliament. 

“Because of this disruption to Sri Lanka’s democratic process, we have put on hold discussions about Sri Lanka’s potential participation in Millennium Challenge Corporation (MCC) programmes,” the senior Trump administration official told PTI when asked about the relationship with Colombo and the Trump Administration.

The latest move by the Trump Administration could be seen as a setback for Sri Lanka, which was expecting a major investment from the US in the island nations transport and land sectors.

The proposed MCC Sri Lanka Compact was designed to spur economic growth and investment by the private sector to reduce poverty and increase economic opportunities for its people, according to MCC Chief Operating Officer Jonathan Nash who visited Sri Lanka in September this year for talks with Sri Lankan authorities.

Colombo Additional Magistrate Isuru Neththikumara ordered the Criminal Investigations Department (CID) to arrest the suspects that can be charged over the murder of former Sri Lankan rugby captain Wasim Thajudeen.

The CID informed the Magistrate today (29) that it is possible to present charges against the former Senior DIG of Western Province Anura Senanayake, OIC of the Crimes Division of the Narahenpita Police Sumith Perera and former Judicial Medical Officer (JMO) of Colombo Dr Ananda Samarasekara, who are named as suspects, in connection with concealing evidence and falsifying documents pertaining to the murder of Thajudeen. 

The case was postponed to February 28, 2019 as the CID requested for another date in order to seek the advice of the Attorney General.

The United National Party (UNP) and the Tamil National Alliance (TNA) raised suspicions in Parliament today stating that former LTTE Commander Karuna Amman and the Eelam Peoples Democratic Party (EPDP) were involved in some criminal incidents in the North and East.

UNP MP Nalin Bandara urged the Speaker to immediately seek clarification on Vinayagamoorthy Muralitharan alias Karuna Amman’s tweet in the context of the murders of two policemen in Batticaloa.

Two police constables, aged 28 and 35, were found dead under suspicious circumstances at a checkpoint at Vavunathivu in Batticaloa this morning. Police media spokesperson said that a special team from the Criminal Investigation Department (CID) has already been deployed to Batticaloa to conduct an investigation.

Speaking further, Nalin Bandara pointed out to Karuna’s tweet from November 27 which said that some UNPers are trying to scare him and that he would like to remind them about “Karuna Amman from before 2004”.

In this context, MP Bandara said that they are suspicious whether this tweet had anything to do with the murders that took place in Batticaloa this morning.

Meanwhile, TNA Parliamentarian M.A. Sumanthiran told Parliament today that Karuna Amman’s group was suspected to be behind some crimes in Batticaloa.

He also said that the EPDP was suspected to be behind recent attacks in the North and said that its leader Douglas Devananda was going around telling people ‘he was back’.

The EPDP and the Karuna group was accused in the past of being involved in human rights abuses in the North and East.

The crimes committed by both groups had been listed by the United Nations (UN) with both sides categorically denying any involvement.

 14 MPs representing the Tamil National Alliance (TNA) wrote to president Maithripala Sirisena today informing him that they will support the restoration of a government headed by the United National Front (UNF) as it existed prior to October 26th. 

"The view of the majority of the Hon. Members of Parliament on the issue of whether the said Hon. Member (Mahinda Rajapaksa), commands the Confidence of Parliament to be the Prime Minister has been negative and has been demonstrated beyond doubt," the TNA said.

"We the Members of Illankai Thamil Arasu Kadchi, will support the restoration of a Government headed by the U.N.F. who in the opinion of Your Excellency is able to command the confidence of Parliament as Prime Minister," the TNA added.

The Parliament approved a motion barring all Cabinet Ministers, State Ministers, Deputy Ministers and their personal staff from using state funds today.

The motion was passed with 122 votes in favour while the pro-Rajapaksa MPs boycotted proceedings for a fourth straight session.

The motion was moved for Parliament to declare that Secretaries to any and all Ministries have no any authority to approve any payment of monies drawn from the funds of the Republic for Ministers, State Ministers, Deputy Ministers and their personal staff.

The motion further states that: 

“Whereas this House on 16th November, 2018, accepted the official statement made by the Hon. Speaker on 15th November, 2018 that, in terms of paragraph 2 of the No Confidence Motion against the Government adopted on 14th November 2018, the Cabinet of Ministers stood dissolved in terms of Article 48 of the Constitution, and accordingly this House further resolved that, since 26th October, 2018, as contemplated in Article 48 of the Constitution, this House had no confidence in the Government including Hon. Mahinda Rajapaksa;
“And whereas Parliament has full control over Public Finance as mandated in Article 148 of the Constitution; that this Parliament resolves that from 15th November, 2018, Secretaries to any and all Ministries have no authority to approve any payment of monies drawn from the funds of the Republic to pay for the salaries and other emoluments of Ministers, State Ministers, Deputy Ministers and their personal staff and are also prohibited from defraying expenses incurred in foreign travel, internal air travel including use of helicopters on behalf of the above Ministers and any person taking any action in violation of this resolution will be dealt with according to law.”

A motion was passed in Parliament on Thursday barring 'purported' Prime Minister Mahinda Rajapaksa from using state funds after he lost two no-confidence votes. The motion was passed with 123 votes in the 225-member Parliament as Rajapaksa supporters boycotted the proceedings for a third day.

The Sri Lanka Working Journalists Association (SLWJA) has condemned the attack on reporters by a security officer attached to Chief of Defence Staff, Admiral Ravindra Wijegunaratne, in front of Fort Magistrate Courts yesterday (28).

Video evidence showed that three journalists were clearly attacked and obstructed from carrying out their duties.

"Journalists Gayan Amarasekera of Lankadeepa, Indika Handuwela of Derana Aruna and Malith Gamage of Lakbima were disturbed and attacked by a naval officer in civil clothes who identified himself as a security officer of Admiral Wijeguneratne," the SLWJA said today.

Wijegunaratne was remanded yesterday for harbouring the chief suspect responsible for the abduction and murder of 11 youths.

The SLWJA requested president Sirisena to hold a full-scale investigation into the incident as the commander-in-chief of the armed forces. They also urged the president to ensure media freedom and the safety of journalists.

Indian Coast Guard Ships CGS Samar and Aryaman are on a visit to Sri Lanka from 01 to 07 December 2018, the High Commission of India said. The ships will arrive in Colombo after participating in the India-Sri Lanka-Maldives Tri-Lateral Coast Guard Exercise ‘Dosti’ that was conducted from 25-29 November 2018 in Maldives. 

Two junior Sri Lanka Coast Guard Officers have also been embarked on the ships since their departure from India on 23 November 2018 to provide valuable sea experience and first hand insight into Coast Guard operations. During their stay in Sri Lanka, the ships would also be visiting Galle.The visit is aimed at furthering the level of cooperation and interoperability that exists between Coast Guards of both the nations and to assist in capacity building of Sri Lanka Coast Guard. 

Interaction between both the services has seen a steady increase over the years with a number of high level delegations and four ship visits undertaken by Indian Coast Guard to Sri Lanka since the last year. 

The operational and professional exchange that takes place between both the Coast Guards has also served to build mutual trust and provide an opportunity to learn from each other.  

ICGS SAMAR

CGS Samar is an indigenously designed state of the art vessel that was built in Goa Shipyard, the same yard where Sri Lanka Navy’s two latest Advanced Offshore Patrol Vessels Sayurala and Sindhurala were built. The ship is designed to carry high speed boats for fast boarding operations, search and rescue, law enforcement and maritime patrol. 

ICGS Aryaman

CGS Aryaman is also an ingeniously designed vessel that was constructed at Cochin Shipyard. Like CGS Samar she is also tasked to carry out fast boarding operations, search and rescue, law enforcement and maritime patrol.

During their visit, the Indian Coast Guard ships will undertake training on aspects such as search and rescue, vessel search procedure and documentation, pollution control etc. In addition, a series of professional exchanges and sports fixtures have been also planned ashore between the ships’ crew and Sri Lanka Coast Guard personnel at Colombo as well as Galle.

Transparency International Sri Lanka (TISL) yesterday provided a detailed statement to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), pursuant to a complaint filed by TISL on 5 November, relating to allegations of attempts to bribe MPs. 

In the statement provided, TISL officials highlighted to CIABOC investigators that the contents of telephone conversation recordings shared with the media recently by Palitha Range Bandara MP, clearly indicate an offence under Section 14 of the Bribery Act. 

TISL Executive Director Asoka Obeyesekere said: “There are three key points to flag from the recorded conversations. One is the offer of 500 million rupees (50 crores) to crossover. Secondly, the offer to pay the amount in US dollars and thirdly, the willingness to carry out the transaction in Anamaduwa.” 

The offence of bribing a member of parliament carries a prescribed prison term of up to seven years under the provisions of the Bribery Act.

CIABOC officials confirmed to TISL today that an investigation has been initiated into the complaint and that statements would be obtained from the relevant parties. “We hope that upon the conclusion of this investigation, those who sought to bribe MPs will be held to account and that anybody attempting to do so in the future is mindful of the consequences,” Obeyesekere added.

President Maithripala Sirisena has assured Speaker Karu Jayasuriya that he will hold separate discussions with the leaders of the United National Front (UNF) and the leader of the opposition tomorrow evening to arrive at an immediate solution to the current political impasse, the Speaker's media unit said in a statement.

The Speaker met with president Sirisena for a special discussion at the Presidential Secretariat today.

"The Speaker told the President that all spheres of the country have become unstable today. He said the rapid depreciation of rupee and the collapsing of the investment sector and the tourism sector would be unbearable for the country. Therefore, the Speaker said that immediate solutions should be given to the instability to which the President responded positively. The President also commended the Speaker's contribution to find solutions," the statement said.

Sri Lanka’s dilemma on allocating funds for the year 2019 continues even after the endorsement given by the cabinet of ministers newly appointed by President Maithripala Sirisena for the three month Vote on Account this week as it needs parliamentary approval for drawing expenditures from the consolidated fund, official sources said.

According to article 150 of the Constitution, "the Government may withdraw funds from the consolidated fund once parliament passes a resolution or a law, granting a specific sum of money for a specified public service to be spent in a particular financial year."

Once parliamentary approval is granted, the warrant under the signature of the Minister of Finance alone has to be issued, for the withdrawal of the specified amounts to be effected.

Cabinet spokesman Dayasiri Jayasekara of the 'purported' UPFA government said that they will present a Vote on Account in parliament next week and enact it with a majority vote in the legislature.

Without a legitimate settlement for the current political impasse, the Finance Ministry will find it difficult to make payments to cover the salaries of public sector employees, pensions, samurdhi beneficiaries and public welfare programmes for at least the first three months 2019, official sources claimed.    According to Treasury statistics, the consolidated fund has over drawn a massive sum of money to the tune of around LKR 250 billion at present for state expenditure.

No money from state institutions including state owned enterprises is forthcoming to the fund and the treasury cannot resort to borrowings to swell the consolidated fund, he revealed, adding that the sudden dissolution of parliament without passing a Vote on Account would further aggravate the financial crisis in the country.

To make matters worse, the 'purported' Finance Minister Mahinda Rajapaksa's tax reductions introduced recently would cause a massive reduction in state revenue next year as there was no way to present revenue proposals in a three month Vote on Account.

Furthermore, 15 tax revisions will come into effect from January 1 next year, on the directions of the Ministry of Finance, if those amendments are approved in parliament.

Out of those revisions, three such tax measures, namely the Telco levy reduction, VAT threshold increase, and WHT on interest income would result in a loss of LKR 75 billion in revenue, tax experts revealed.  

By removing the 5 percent WHT, the Finance Ministry officials are expecting the interest income to be declared as income tax and subject it to be taxed at 24 percent instead of the 5 percent applicable at present, tax experts added.

According to Finance Ministry statistics, the total state revenue was LKR 925 billon in the first 6 months of this year.

Meanwhile, expenditure on salaries and wages was LKR 316 billion, interest payments at LKR 391 billion, welfare at LKR 223 billion with the total expenditure at LKR 930 billion.

Under this set up, the Finance ministry faces a monumental task ahead to manage the cash flow prudently, he warned.