Sri Lanka government pledges to hold off signing U.S. pact until after election

Millennium Challenge Corporation - MCC

Sri Lanka’s government said on Wednesday a decision on agreeing a $480 million infrastructure grant from the United States, which has been criticized by some lawyers, Buddhist monks and opposition politicians, would be put off until after a Nov. 16 presidential election to allow for broader discussions.

The grant, from the U.S. Millennium Challenge Corporation (MCC), aims to reduce poverty by upgrading provincial roads and improving land administration.

But the project has become a point of contention in campaigning for the election, which pitches opposition candidate and wartime defense chief Gotabaya Rajapaksa against Sajith Premadasa, who is housing minister in the current government.

Some influential Buddhist monks, the Sri Lankan Bar Association, and allies of Rajapaksa, the brother of former President Mahinda Rajapaksa, say the grant would be detrimental to the island nation.

The opposition has said agreeing the grant could allow U.S. ownership of a swathe of land from the strategic natural port at Trincomalee, in the east, to the capital Colombo.

The government denies that, but says it will hold off from signing the agreement until after the poll.

“The agreement will be signed only with parliament’s approval and (after) discussions,” Finance Minister Mangala Samaraweera told reporters in Colombo.

“Not even a single inch of land will be given to the U.S. The decision on how to spend the grant also is at our discretion according to our priorities. The main conditions in the agreement are protecting human rights and democracy.”

Premadasa said in a letter on Tuesday to a Buddhist monk who had begun a hunger strike against the grant that the agreement would be signed only after discussions with monks.

There are no official polls ahead of the election, but political analysts say there is a tight race between Premadasa and Rajapaksa.

The grant agreement was originally due to be signed in December 2018, but was delayed by a political crisis that erupted when President Maithripala Sirisena unexpectedly sacked Prime Minister Ranil Wickremesinghe and replaced him with Mahinda Rajapaksa. The Supreme Court later reversed that move.