Accusation against Chinese company over Lotus Tower funds “horrendous insult to China”: MR

• Former President issues statement to clarify facts surrounding Lotus Tower financing
• Says publicly insulting major world power that has always been friendly and helpful to SL is “unconscionable”
• Says Yahapalanaya leaders have always tried to take credit for projects started during former regime
• Expects relevant individuals to move quickly to issue correction

Former President and Leader of the Opposition Mahinda Rajapaksa yesterday said the allegation against a Chinese company of having disappeared with Rs. 2 billion that was meant for the construction work of the Lotus Tower “is a horrendous insult to China.”

“To say that a major Chinese Government-owned conglomerate had disappeared with Rs. 2 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,” Rajapaksa said in a statement issued yesterday. 

According to Rajapaksa, the comments made by President Maithripala Sirisena at the opening of the Lotus Tower was made due to wrong information being conveyed, and he expected the relevant individuals to move quickly to issue a correction. “Since all documents pertaining to the Lotus Tower project are available with the TRC and the Auditor General, ascertaining the truth with regard to this matter is not a difficult task at all,” he said.

Rajapaksa said in his statement that President Sirisena’s accusation that the Chinese contractors involved in the project – a company named ALIT – had taken an advance payment of  Rs. 2 billion (Around $ 15 million at that time) and disappeared was flashed around the world by international news agencies, and that it became a major news story in many Asian countries.

The former President said that at the time this payment was made in 2012, the Telecommunication Regularity Authority (TRC) was in charge of this project, which was directly under him as President, which was why he was making a clarification regarding this matter.

“In 2012, the total cost of the Lotus Tower project was estimated at $ 104.3 million. The Exim Bank of China agreed to provide a loan facility of $ 88.6 million, up to 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 former President said.

He said that while the Lotus Tower was due to be completed by 2015, due to the Yahapalanaya Government causing delays in the project, and due to lapses on the part of the contractor, it could not be completed according to schedule.

“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 (Rs. 2 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. 2 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.”

The statement said 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.

The former President also accused the Yahapalanaya Government of declaring open all the projects started by his Government, including the Colombo Lotus Tower project. 

“The Lotus Tower can generate enormous revenues for the Government by providing telephone, television and radio broadcasting services, and also by attracting local and foreign tourists. But its cost has been less than a seventh of the cost, for example, of the privately-owned Shangri La hotel project in Colombo. The Lotus Tower is, therefore, an excellent investment. This is also an edifice that will symbolise Sri Lanka, much like the Eiffel Tower in France.”

Rajapaksa said that the unfounded allegation of the missing Rs. 2 billion 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. 

“What we saw happening was no different to throwing stones at a neighbour’s new car out of sheer jealousy. For more than five years, we have heard a lot about golden horses, Lamborghinis, and bank accounts with a balance of $ 18 billion but this is the first time that anybody heard of a Chinese company that had disappeared with Rs. 2 billion belonging to the TRC. “