Adjournment debate

QEQ-P&O deal charges and counter charges

The QEQ-P&O deal reverberated in Parliament yesterday, with the Opposition alleging serious departures from procedure and insinuating of corruption and the Government counter charging the United National Party with trying to sabotage the country’s biggest ever single investment, out of sheer jealousy.

Kalutara District MP Sarath Ranawaka (UNP) moving an adjournment debate on the QEQ-P&O deal said that the Board of Investment (BOI) called Tenders by notice published in the national and international media for this purpose but strangely the only bidder was the P&O.

The UNP plan was to develop the Colombo Port with Japanese aid and the former Secretary to the Ministry of Port Development, Rehabilitation and Reconstruction went to Japan in November 1994, after the present Government came into power and had a Letter of Intent (LOI) signed in regard to this, he said.;

But later the LOI was cancelled and Tenders were called internationally. The only bidder was P&O he added.

The project was called the Southern Port Development Project and the Queen Elizabeth Quay was one item of the Project.

The P&O submitting a report suggested that QEQ should be broadened to a width of 100 meters, that a 3500 meter break-water should be built and the harbour dredged to a depth of 17 meters.

The Sri Lanka Port Authority had its reservations about this report and the report was sent to Delft Hydraulic Laboratory (DHL), in Netherland for a technical evaluation.

The DHL reported back that if the QEQ was broadened by 100 meters it would obstruct the Bandaranaike Quay and also reduce the water basin. DHL also warned of disastrous consequences during monsoon seasons if proposals were carried out. It said that the QEQ could be broadened to 75 feet it is absolutely necessary. It also said there should be sufficient space for manoeuvring larger ships.

Inspite of such warnings the P&O proposal has been accepted by the Government Mr. Ranawaka added.

He also said that the World Bank has recommended the retrenchment of 50 percent of the 17,699 work force of Colombo Port and to set apart a sum of USD 20 million to pay compensation to those leaving their jobs.

He said the World Bank had advised Sri Lanka to talk to the three main Port trade union to which 84 percent of the workers belong, in order to make it possible to carry out retrenchments smoothly, "have your heeded this advice?", he asked. "As far as I know you have kept the workers in the dark as to the World Bank Proposal" he said

The other recommendations of the World Bank include the appointment of a Port Commission and conversion of the Jaya Container Terminal (JCT) into a separate company.

When JCT is converted into a separate company will it be able to compete with the P&O which will enjoy the many benefits entitled to it when it undertakes the job under the Build, Operate and Own (BOO) facility? "What will happen to the other terminals?", he asked.

He also questioned the wisdom of the Sri Lankan Government guaranteeing the loans that will be obtained by the lending institutions by the P&O.

Karunasena Kodi-tuwakku, MP, (UNP Colombo District) seconding the motion demanded a clear statement from the Government on the P&O deal. He said that in 1505 the then rulers of the country gave the control of Colombo Port to the Portuguese. The present rulers are now giving away the Colombo Port to foreign business tycoons.. UNP’s plan was to develop the port from donor funding with Jaica co-operation, he added.

Minister of Plan Implementation and Parliamentary Affairs Jeyaraj Fernandopulle replying said that 16 firms obtained Tender documents in response to the internationally published Tender Notices but only one presented a Bid. That was the P&O, he added.

He said the Opposition has conceded that the Government had called Tenders internationally. Everything has been done in the most transparent manner and any interested Member can at this very moment inspect all the documents relating to the deal. The officer have brought them, he said

The Minister accused the last UNP Government of leasing the QEQ to two Japanese businessmen under two Deeds of Lease and even the Attorney General was unaware of these until they were found recently. No tenders have been called and not a cent has been paid by the Japanese lease holder up to now.

The transactions have taken place in the most shady manner, he said

He said that the last UNP Government even leased the Dock Yard to a Japanese businessman. This too has been done in great secrecy. "We would cancel all these fraudulent deeds," he said.

He said that there were two technical evaluation reports. One is that of the Netherland consultants and the other is that of the Hamburg Port Consultants who have okayed the P&O proposals.

He said that the P&O deal was not an overnight transaction. There had been discussions for three and half years before the Agreement with the P&O was signed.

He said that the Southern Port development project was the biggest ever single investment project. The UNP is seemingly jealous about it. The total investment was USD 420 million, he said.

He said no employee of the Port would lose his job. All the excess employees will be taken back to the Port Authority. There are 470 employees in the QEQ he said.

He also denied there was a Letter of Intent with any Japanese firm with regard to the port development project.

Acting Minister of Port Development, Rehabilitation and Reconstruction Reggie Ranatunga read a statement.