Aug 16

President Sirisena, during his televised discussion on 13 August 2016, said that the Rajapaksa government carried out most projects without Feasibility Studies (FSs) and serious planning. To the best of my knowledge, this is the first authoritative statement on the absence of FSs on major projects of the previous government, although it was widely suspected to be so. He took the example of how the decision to locate the Mattala Airport was taken in order to reveal the irresponsible and flippant manner with which vital decisions were made. This means that massive funds, borrowed at commercial rates of interest, were wasted on these projects. Is any further evidence needed to conclude that the government was criminally negligent in the management of public funds?

President Rajapaksa, after enacting the infamous Eighteenth Amendment, was the most powerful president in the world in terms of the powers he wielded over the people he ruled. Therefore, he should be held accountable for lack of due diligence in executing the office of President. The mere fact that there is no FS on this thirty-billion-Rupee project, as well as for several other big projects, is sufficient proof of gross financial impropriety. The balance of probability suggests consequent financial mischief on a massive scale.

Prudence requires investment decisions to be based on robust and rigorous FSs. These studies explore all important aspects including physical, environmental and economic considerations arising from and impinging on the work to be undertaken. Project inputs and outputs are usually computed for periods extending twenty to forty years from inception. Cost and benefit streams expressed in border prices (for economic evaluation) are discounted to the present. Sensitivity Analyses (SAs) are performed to establish the integrity of the project in the event that major assumptions are subjected to adverse pressures. Measures of economic feasibility such as Payback Period (PP), Net Present Value (NPV) Benefit Cost Ratio (BCR) and Economic Internal Rate of Return (EIRR) are calculated and weighed in making the investment decision. Physical and financial plans for a project would be drawn up within the parameters established in the feasibility reports. Excepting in defense spending, these reports are not classified documents and are usually made available to the implementing agencies and libraries, and also posted in dedicated government websites.

There was no mention of FSs and implementing plans and programs during the many public discussions on the mega projects of the Rajapaksa government; particularly those ghost facilities in Hambantota. There was much discussion over a rock that was obstructing the access channel to the fifty-billion-Rupee Magampura Mahinda Rajapaksa Port, that was discovered only after it was declared open. How could that have happened if thorough geological investigations had been carried out before commencement of construction? The following are only a few of the questions that arise regarding Sri Lanka’s second international airport that has so far cost over thirty-billion Rupees.  (1) What other locations were considered and examined for building the airport? (2) By what criteria were they found inferior to Mattala?  (3)  What are the management and mitigation plans regarding environmental issues arising from its close proximity to a wildlife sanctuary, including risks posed to aircraft and wildlife?  (4) What are the assumptions and projections of demand for airport use by airlines, numbers of passengers and tons of cargo in the years ahead?  (5) Were implementation plans and schedules for construction, installations and operation with timelines up to the end of pay-back time and beyond prepared?  (6) How acceptable were the measures of profitability to the national economy over time (BCR, NPV, EIRR) derived by economic analysis?

We now know that there are no answers to these questions regarding the massive investment on this airport and other such projects. The irony is that these are questions that are routinely addressed, for example, before the Irrigation Department builds a minor village irrigation tank that would cost even less than a mere one-hundred-thousand Rupees!

The FS should have included a comprehensive overall plan with a timeline for implementation. The present government has stated that it is preparing plans to get the Mattala Airport functioning. This suggests that, before commencing work at the site, there was no implementation plan for management and business development of the completed project.  If there had been a proper plan the present government could have continued with development accordingly. Serious errors of technical design in the alignment of the runway and the absence of a parallel taxiway have been reported. It is also alleged that contracts for construction work on several large projects, both at Mattala and elsewhere, were awarded without resorting to competitive bidding procedures.

These issues were raised before and during the implementation of these projects. But they were not heeded by an all-powerful president with a craftily engineered and pliant two-thirds majority in parliament, basking in the glory of winning the war against the dreaded LTTE. History will record, and men will remember, his vital role as the Commander-in-Chief in that great victory. Nevertheless, what happened after that was a mockery of governance. Shielded by the Eighteenth Amendment, a veritable orgy of shameless squandering of people’s monies ensued in the guise of creating a mythical “Miracle of Asia”.

How could a responsible government commit massive funds borrowed at high rates of interest in such monumentally irresponsible and brazenly corrupt manner, and leave the consequences to be borne by a largely poor people? Did they have no honor or shame at all? The price of this despicable crime against the Nation would be paid in foregone prosperity and extended destitution by the poor un-empowered majority of the people, and yet to be born generations. (Sadly, robbery seems to continue under the present government as well.) Let us, the people, particularly the Civil Society Organizations that gave leadership to the ‘January Eighth’ transformation resolve, that such madness shall never happen again under the new constitution now being framed.

In July 2015, RMB Senanayake wrote “If there is no law, then a new law on Public Finance and Accountability should be passed. If MR was a public official he would be guilty of violating the Financial Regulations. But there is a doubt about whether Ministers and the President can be bound by these Financial Regulations. Public Interest organizations should address their minds to this issue since public funds are the subject matter. Can Ministers be allowed to act with impunity in matters of public finance? We are now talking much about good governance. What about its applicability in financial matters?”

No new project to be funded by the Treasury should be undertaken without a thorough study of its feasibility and a plan of implementation. The feasibility reports with implementation plans should be freely available for public scrutiny. It should be the responsibility of the relevant Minister and the Parliament to ensure that the planning and execution of the project are done in a systematic and orderly manner. They should be among those accountable for any failure of the project. It is time that the civil society organizations that were active during the last presidential and parliamentary elections take this matter up and push through these essential reforms.

My purpose in this short essay is, to urge the men with wisdom drafting the new Constitution, to boldly write an unambiguous provision into that charter, preventing such blatant misuse of public funds by anyone including the President, the Prime Minister and the Cabinet of Ministers, who are but paid servants of the people. This provision should be in the Constitution and not relegated to a mere regulation in a Government Gazette. It is the right of the people to expect that funds belonging to the people are used wisely for the benefit of the people. Civil society organizations that bore the brunt of the struggle to effect a change of government on the Eighth January 2015 should strongly pressurize our lawmakers to include this provision into the new Constitution.

Ananda Wanasinghe
Project Monitoring and Evaluation Specialist

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