President Maithripla Sirisena has in a special statement to the Cabinet today blasted the ad-hoc, un-advisable and arbitrary decision by the Mahinda Rajapaksa regime to move the Army Headquarters from Baladaksha Mawatha in Fort and sell the land to Shangri-La Hotel chain.
Minister Mahinda Samarasinghe told a media conference held at the party office that the President had highlighted the fact that this move had placed the country at large and the Colombo City in particular at risk with 15 Army Units being relocated in 15 different buildings at a total annual rental of Rs.5,000 million paid by the Treasury.
He said on a request by the ministers, the President would soon decide whether to appoint a Commission of Inquiry on the questionable transaction where 10 acres of prime land in the centre of Colombo City was sold for a mere US$125 million or Rs.18.80 million and whether to take legal action to get to the bottom of this deal.
The minister said the President had made the special statement as Minister of Defense and pointed out that he was shocked to learn of the damage caused to the country and the economy after perusing the information and the statistics submitted to him by officials on this controversial transaction.
He said the annual rental costing the Treasury a massive Rs.5,000 million a year was the result of a unplanned, foolhardy and ill-advised decision to shift the Army Headquarters.
“There was no plan, no evaluation or no afterthought on the decision to shift the Army Headquarters and the only objective was to permit Hong Kong’s Shangri-La Hotel Chain to purchase outright the 10-acre block of land at their price,” the minister said. These are the people who are pointing fingers at the yahapalana government accusing it of selling lands in Hambantota to the Chinese while the fact is that we gave the lands on 99-year lease.”
The Cabinet suspended the construction of the Rs.40 billion Defence Headquarters Complex (DHC) at Akuregoda in July this year and the payments to the private contractor stopped on the basis that the selection of consultancy firms and payments had been made without providing correct information to the Cabinet.
The minister said a Cabinet Memo presented by President Sirisena had revealed that a huge financial scam running into billions of rupees had occurred during the initial stages of the project and all Cabinet papers pertaining to the project had been prepared according to the instructions of the former defence secretary.
The disclosure of the financial scam, the haphazard and ad-hoc manner in which the consultancy firm was selected and the payments made was a result of a committee appointed by the Cabinet in March, 2015.
Having considered the note to the Cabinet presented by the Minister of Defence on the ‘Project to Construct the Defence Headquarters Complex in Akuregoda”, it was decided by the Cabinet at its meeting on March 18, 2015 to appoint a committee headed by Secretary to the Ministry of Defence to look into this matter and report on matters related to the said project. Accordingly, the report prepared by the committee was presented to the Cabinet on August 5, 2015 by the Minister of Defence.
However, the Cabinet had again decided to request the Secretary to the President to appoint a committee of officials to further inquire into the matters referred to in the first report under Consultancy Firms and Related Payments and observations and recommendations.
Accordingly, the four-member committee has recommended that the Architectural Consultancy Firm named Muditha Jayakody Associates (Pvt.) Ltd.(MJAPL) should not be considered for consultancy services of this project in future.
“There is no doubt that a huge financial fraud has taken place involving this project and the government would go to the bottom of it and expose the culprits and take legal action against them before long,” the minister said and added that the ministers commended the President for exposing the scam and requested that it be investigated.