SPECIAL REPORT : Part 381
By Shamindra Ferdinando
Wartime Defence Secretary Gotabaya Rajapaksa, who made a new Defence Complex a reality, visited the sprawling building in his capacity as the President, Defence Minister and the Commander-in-Chief of the Armed Forces on the morning of August 3. It was Gotabaya Rajapaksa’s maiden visit to the Army Headquarters, located within the partially completed Defence Complex.
In addition to the Army Headquarters, the Defence Ministry, too, has been moved to the Defence Complex whereas the work on the Navy and Air Force Headquarters are underway. The reportage of President Gotabaya Rajapaksa’s visit didn’t take into consideration how such a massive project came into fruition.
The war-winning Mahinda Rajapaksa government laid the foundation for the building project on May 11, 2011, two years after the eradication of the Liberation Tigers of Tamil Eelam (LTTE) as a military threat that was tearing apart the nation for nearly 30 years. The high profile project, on a 77 acre land, at Akuregoda, Pelawatta, was meant to bring the Army, Navy, and the Air Force headquarters, and the Defence Ministry, to one location.
The project is the largest single building venture undertaken by the government after the successful conclusion of the war, in May 2009, and Mahinda Rajapaksa’s a landslide victory at 2010 presidential, beating war-winning Army Commander the then General Sarath Fonseka.
President Mahinda Rajapaksa’s defeat at the 2015 presidential election, and the still raging Covid-19 epidemic, caused considerable delay. It would be pertinent to mention that the 19th Amendment enacted by now estranged Maithripala Sirisena and Ranil Wickremesinghe in 2015 deprived the former’s successor from holding the defence portfolio. Having won the presidency in 2019, Gotabaya Rajapaksa brought in the 20thA in Oct, 2020 at the expense of the 19thA to eliminate legal impediments preventing him from taking over the Defence portfolio.
President Gotabaya Rajapaksa’s visit to Akuregoda would have definitely taken place much earlier, under a very different environment, if not for the eruption of the Covid-19 pandemic, just a few months after his victory at the Nov 2019 election. The worst post-World War II crisis that had caused devastating losses to national economies, the world over, and delivered a staggering blow to Sri Lanka, heavily dependent on tourism, garment exports and remittances by its expatriate workers. President Gotabaya Rajapaksa hadn’t minced his words when he publicly acknowledged the catastrophe caused by the plunging of the national income and the daunting challenge in debt repayment amounting to as much as USD 4 bn annually.
The decision to shift the tri-forces headquarters and the Defence Ministry (The Defence Ministry situated within the Army Headquarters premises) caused a media furor with the Opposition alleging a massive rip-off. The then Defence Secretary Gotabaya Rajapaksa reiterated his commitment to the project. If not for the change of government in 2015, the Akuregoda Defence Complex would have been completed during Mahinda Rajapaksa’s third term. Had that happened, Gotabaya Rajapaksa wouldn’t have emerged as the then Opposition presidential candidate at the 2019 poll. The disastrous yahapalana administration and the overall deterioration of those political parties, represented in Parliament, and the 19thA that barred Mahinda Rajapaksa from contesting the presidential election, beyond his two terms, created an environment conducive for Gotabaya Rajapaksa’s emergence as the newly registered SLPP’s candidate.
On his arrival at the new Army headquarters, President Gotabaya Rajapaksa was welcomed by General Shavendra Silva, who is also the Chief of Defence Staff. Thanks to the incumbent President’s predecessor, Maithripala Sirisena, the then Maj. Gen Shavendra Silva was promoted to the rank of Lt. Gen and appointed the Commander of the Army on Aug 18, 2019, just three months before the presidential poll. The appointment was made in spite of strong opposition of the UNP leadership and US criticism.
President Gotabaya Rajapaksa promoted the Army Commander to the rank of a Four-Star General on Dec 20, 2020.
The Army moved into new headquarters on Nov 8, 2019, about its a week ahead of the presidential election, in the wake of President Sirisena declaring it open before he went out of office, though work on the rest of the defence complex was far from over.
Shangri-La move
During the presidential election campaign, SLPP candidate Gotabaya Rajapaksa strongly defended his decision to vacate the Army headquarters during Mahinda Rajapaksa presidency to pave the way for the Shangri-La-Hotel in Colombo. Shangri-La was among the hotels targeted by the Easter Sunday bombers – the only location targeted by two of them, including mastermind Zahran.
President Gotabaya Rajapaksa is on record as having said that vacation of the site had been in accordance with first executive President J.R. Jayewardene’s decision to move key government buildings away from the city.
Gotabaya Rajapaksa said that a despicable attempt was being made to blame him for the Army Headquarters land transaction. “I have been accused of selling the Army Headquarters land to the Chinese.”
Rajapaksa explained that Taj Samdura, too, had been built on a section of the Army headquarters land, previously used to accommodate officers’ quarters and the Army rugger grounds. Although President Jayewardene had wanted the Army headquarters shifted, successive governments couldn’t do that due to the war and lack of funds, he said.
The Rajapaksa administration brought the war to a successful conclusion in May 2009. President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe declared open Shangri-La Colombo on Nov 16, 2017. Hong Kong-based Shangri-La Asia invited Gotabaya Rajapaksa for dinner the following day after the opening of its Colombo hotel. Shangri-La Chairperson, Kuok Hui Kwong, the daughter of Robert Kuok Khoon Ean, was there to welcome Gotabaya Rajapaksa, who had cleared the way for the post-war mega tourism investment project. Among those who had been invited were former President Mahinda Rajapaksa, former External Affairs Minister Prof. G.L. Peiris, former Presidential Secretary Lalith Weeratunga and President’s Counsel Gamini Marapana, PC.
The Cabinet granted approval for the high profile Shangri-La project in Oct 2010 and the ground-breaking ceremony was held in late Feb 2012.
Rajapaksa said that the Shangri-La proprietor, a Chinese, ran a big operation based in Hong Kong, Malaysia and Singapore. Another parcel of land was given to the mega ITC hotel project also during the previous Rajapaksa administration.
Following the change of government in January 2015, the remaining section of the Army headquarters land, too, was handed over to Shangri-La.
Gotabaya Rajapaksa emphasised that the relocation of the headquarters of the Army, Navy, and Air Force, as well as the Defence Ministry, had been part of JRJ’s overall plan. The change of government, in January 2015, had caused a serious delay in completing the project and it was proceeding at a snail’s pace, Rajapaksa said. Even Parliament was shifted to Kotte in accordance with the JRJ plan, Gotabaya Rajapaksa said, explaining his move to relocate all security forces’ headquarters and Defence Ministry into one complex at Akuregoda.
Acknowledging that the Army headquarters had been there at Galle Face for six decades, Rajapaksa asserted that the Colombo headquarters wasn’t tactically positioned.
Rajapaksa blamed the inordinate delay in the completion of the Akuregoda complex on the Treasury taking hold of specific funds allocated for the project.
New Defence Complex
Army Chief Gen. Shavendra Silva welcomes President Gotabaya Rajapaksa
Major Gen. Udaya Nanayakkara had been the first Director, Project Management Unit, with overall command of approximately 5,000 tri-forces personnel assigned to carry it out. The Shangri-La transaction provided the wherewithal to implement the Akuregoda project though the change of government caused a setback. Nanayakkara, who had served as the Military Spokesman, during Eelam War IV, oversaw the military deployment, whereas private contractors handled specialised work such as piling, AC, fire protection and fire detection et al. The then MLO (Military Liaison Officer) at the Defence Ministry Maj. Gen Palitha Fernando had laid the foundation for the project and the work was going on smoothly when the yahapalana administration withheld funds. Political intervention delayed the project and by Sep 2015, Nanayakkara was replaced by Maj Gen Mahinda Ambanpola, of Engineer Service.
In spite of President Sirisena holding the Defence portfolio, he couldn’t prevent the top UNP leadership from interfering in the Akuregoda project. However, the Shangri-La project had the backing of A.J.M. Muzammil, the then UNP Mayor and one of the close confidants of UNP leader Ranil Wickremesinghe. Muzammil was among those present at the ground breaking ceremony held on Feb 24th, 2012 with the participation of Minister Basil Rajapaksa.
Having identified the invaluable land, where the Army Headquarters and Defence Ministry were situated, for its project, Shangri-La made its move. Those who had been aware of Shangri-La’s plans were hesitant and certainly not confident of their success. They felt fearful of Defence Secretary Rajapaksa’s reaction.
But, following swift negotiations, they finalised the agreement on Dec 28, 2010. Lt. Gen. Jagath Jayasuriya was the then Commander of the Army, with his predecessor General Fonseka in government custody after having been arrested within two weeks after the conclusion of the 2010 January 26 Presidential poll.
Addressing the annual Viyathmaga Convention at Golden Rose Hotel, Boralesgamuwa, on March 4, 2017, Gotabaya Rajapaksa, perhaps for the first time publicly discussed his role in the Shangri-La project. Declaring that Sri Lanka suffered for want of what he called a workable formula to achieve post-war development objectives, the war veteran stressed the pivotal importance of swift and bold decision-making.
Gotabaya Rajapaksa explained how the government had acted swiftly, and decisively, to attract foreign investment though some such efforts were not successful. There couldn’t be a better example than the government finalising an agreement with Shangri-La Hotels, he said.
Declaring that the bureaucratic red tape shouldn’t in any way be allowed to undermine investments, Rajapaksa recalled Chairman/CEO of Shangri-La Hotels and Resorts, Robert Kuok Khoon Ean, wanting the Army headquarters land for his Colombo project. In fact, the hotels chain, at the time, had proposed to build hotels in Colombo, Hambantota and Batticaloa, and was one of the key investors wanting to exploit Sri Lanka’s success in defeating terrorism.
“Khoon-Ean’s request for the Army headquarters land caused a serious problem for me. It was a serious challenge. How could I shift the headquarters of the war-winning Army? The Army had been there for six decades. It had been the nerve centre of the war effort for 30 years,” said Rajapaksa.
Rajapaksa went on to explain how he exploited a decision taken by the first executive president J.R. Jayewardene to shift the Army headquarters to Battaramulla, many years back. “Within two weeks, in consultation with the Secretary to the Finance Ministry, Dr. P.B. Jayasundera, and the Board of Investment, measures were taken to finalize the transaction. The project was launched to shift the Army, Navy and Air Force headquarters to Akuregoda, Pelawatte, in accordance with JRJ’s plan.”
The Hong Kong-based group announced the purchase of 10 acres of state land, in January 2011. Shangri-La Asia Limited announced plans to invest over USD 400 mn on the 30-storeyed star class hotel with 661 rooms.
The hotel is the second property in Sri Lanka for the leading Asian hospitality group, joining Shangri-La’s Hambantota Resort & Spa, which opened in June 2016.
Rajapaksa said that the top Shangri-La executive had referred to the finalisation of their Colombo agreement to highlight the friendly way the then administration handled the investment. Shangri-La had no qualms about recommending Sri Lanka as a place for investment, Rajapaksa said.
The writer explained the move to shift the Army headquarters and the Defence Ministry from Colombo in a lead story headlined ‘Shangri-La to push MoD, Army Hq. out of Colombo city: Army Hospital expected to be converted into a museum’ (The Island, January 4, 2011).
In the wake of the January 2015 change of government, the new leadership caused chaos with the suspension of the China-funded Port City Project, a little distance away from the Shangri-La project. Many an eyebrow was raised when the then Finance Minister Ravi Karunanayake declared, in March, 2015, that funds wouldn’t be made available to the Akuregoda Defence Complex project until the exact cost estimation of the project could be clarified.
Media quoted Karunanayake as having said “Presently, this project seems like a bottomless pit and we need to know the depth of what we are getting into. From the current state of finances, allocated for this project, it seems as if they are building a complex that’s even bigger than the Pentagon!”
The insinuating declaration was made despite them having committed the blatant first Treasury bond scam in Feb 2015 that shook the Sirisena-Wickremesinghe administration.
In June 2016, Cabinet spokesperson, Dr. Rajitha Senaratne announced the suspension of the Akuregoda project. Citing financial irregularities and mismanagement of funds, Dr. Senaratne alleged that all Cabinet papers on the project had been prepared according to the whims and fancies of Gotabaya Rajapaksa.
The suspension order was made public a few months after the second far bigger Treasury bond scam, in 2016 March. As sharp differences emerged between President Sirisena and the UNP, the former threw his weight behind the Akuregoda project. President Maithripala Sirisena on Sept 5, 2017, inspected the Akuregoda Defence Complex, as well as the Lotus Tower, under construction.
Within weeks after President Rajapaksa’s defeat, the new administration made its move against the Akuregoda project.
The following is The Island front page story, dated January 19, 2015: “Finance Minister Ravi Karunanayake, in the third week of January, said that Rs 13.2 billion, in an account maintained at the Taprobane branch of the Bank of Ceylon had been transferred to Consolidated Fund of the Treasury. The matter was being investigated as the account belonged to the Ministry of Defence, he added.
The Finance Minister stressed that the MoD had no right to maintain such an account in violation of regulations and therefore the opening of the account was being investigated. The Minister alleged that several illegal transactions, including one involving Samurdhi, had come to light. He estimated the Samurdhi transaction (now under investigation) at Rs. 4 billion.
Responding to the allegation, former Defence Secretary Gotabaya Rajapaksa said that the funds received from the Shangri-La transaction had been deposited there and the funds utilised for the construction of Akuregoda Defence Complex.
The former Defence Secretary said that the chief accountant of the Defence Ministry could explain the matter. Insisting that the particular account hadn’t been in his name, Rajapaksa said that a detailed response would be issued shortly (Ravi K orders Rs 13.2 b in MoD account transferred to Treasury, with strapline, Funds were meant for Defence Complex – Gotabaya).
The writer obtained the above statements from Karunanayake and Rajapaksa in the wake of the former’s statement that the Akuregoda Defence Complex was even bigger than the US Defence Headquarters Pentagon.
Yahapalana
role in Shangri-La expansion
In spite of strongly objecting to almost all projects launched by the previous government, the Sirisena-Wickremesinghe administration pledged their commitment to them. Yahapalana support extended to Shangri-La is a case in point. Having secured 10 acres from the previous Rajapaksa administration, Shangri-La purchased an additional three and a half acres, also on a 99-year lease, recently.
However, The Sunday Times reportage of the second Shangri-La land deal prompted President Maithripala Sirisena to direct Cabinet spokesman, Dayasiri Jayasekera, to clarify the transaction. In other words, President Sirisena contradicted Development Strategies and International Trade Minister Malik Samarawickrema for alleging that the President gave three and a half acres, situated between the newly opened Shangri-La Hotel and Beira Lake.
Jayasekera explained the circumstances under which Shangri-La, through its Singapore based subsidiary Perennial Real Estate Holdings acquired three and a half acres adjoining its latest hotel, situated on 10 acres, abutting the Galle Face promenade, in Colombo.
On the day before the opening of Shangri-La by President Sirisena and PM Wickremesinghe, Jayasekera explained how the government had re-negotiated with the Shangri-La Group what he called a much better deal than the one struck by the previous administration.
Jayasekera confirmed that the lease was for a period of 99 years. The government leased three and a half acres of land at a rate of Rs. 13.1 mn per perch whereas the previous administration agreed to Rs 6.5 mn per perch. According to Jayasekera the previous government had leased 10 acres at a rate of Rs 9.5 mn (with taxes) per perch.
The bottom line is in spite of opposition, the UNP backed controversial projects. The UNP’s opposition to the Shangri-La project, in a way similar to the campaign carried out against the Chinese investment in the Hambantota port. The UNP in 2017 handed over the Hambantota port on a 99-year-lease to China.
