WASHINGTON: The United States’ Millennium Challenge Corporation (MCC) has voted to discontinue the US $480 million compact agreement with the island country, Sri Lanka, according to the Daily Mirror.
The decision was taken by the MCC board at a meeting on December 15. With this, the MCC unit in Sri Lanka will also be closed.
A formal announcement in this regard, however, is yet to be made on the withdrawal.
The Asian country had remained on the agenda for this week’s meeting of MCC board, the report said.
The previous Yahapalana government gave Cabinet approval for the MCC ahead of the 2019 presidential elections. However, the new government, formed after the elections, under President Gotabaya Rajapaksa decided to suspend the signing of the compact.
The MCC Compact is a grant project consisting of two components — a transportation project and a land project.
According to the Daily Mirror, the $350 million transport is meant to increase the relative efficiency and capacity of urban and provincial transport infrastructure in the Western, Central, Sabaragamuwa and Uva Provinces of Sri Lanka.
Likewise, according to the local proponents of the Compact, the transport project will modernize traffic systems, upgrade physical roadway networks, and introduce policy and regulatory reforms.
Similarly, the $67 million land project has an estimated economic rate of return of 30% over 20 years and aims to expand and improve existing Sri Lanka government’s initiatives to increase the availability of spatial data and land rights information, according to the Daily Mirror.
The political parties that backed the incumbent government, however, were critical of the Compact and insisted that it should be scrapped forthwith.
The parties argued that the Compact, particularly its land project, would impinge on Sri Lanka’s sovereignty.
(With inputs from Daily Mirror)
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