The Government and the LTTE on Friday 24th June signed a Memorandum of Understanding. This tsunami aid sharing deal or the Post-Tsunami Operational Management (P-TOMS) was signed by the Secretary to the Ministry of Relief, Rehabilitation and Reconciliation on behalf of the Government while the Deputy Head of the Planning and Development Secretariat (PDS) signed on behalf of the LTTE.

There however has been speculation and misunderstanding on some important sections of the
P- TOMS agreement. The Government today issued a statement clarifying these doubts.

1. Security undermined .The LTTE could construct bases and have control over the entire 2 km area     and also bring pressure on the GOSL to remove security forces camps and installations. The     Government does not agree;

Clause 2 (f) of the P-TOMS specifically states that the Ceasefire Agreement (CFA) will continue 'in full force and effect' and 'nothing in the MOU shall be construed to prejudice or alter its terms in anyway'. Article 1.12 of the CFA, negotiated and signed by Mr.Ranil Wickremesinghe, the Prime Minister of the UNF Government, in February 2002, specifically provides for the exclusion of the High Security Zones from the ambit of the CFA, whilst guaranteeing their security under the security forces of the GOSL.  Therefore the P-TOMS cannot in anyway affect the existence of High Security Zones or military camps and
installations.

The Trincomalee harbour is under the control of the government and the LTTE has no access to these establishments.  The Trincomalee harbour, the KKS harbour and Palali Military Camps are not under the P-TOMS.  The CFA specifically mentions in article 1.12 under the section on 'freedom of movement', that the government has the 'right to deny entry to specified military areas'.

The CFA in Article 1.3 also recognizes that the 'Sri Lanka armed forces shall continue to perform their legitimate task of safeguarding the sovereignty and territorial integrity of Sri Lanka'.

The LTTE and the Sea Tigers will exercise control only in areas they did under the CFA.  They will not have a right to control any areas outside this, even if they fall within the tsunami affected areas.

It should be noted that the powers vested in the P-TOMS is limited to tsunami relief, rehabilitation and reconstruction.  Eg. Rebuilding of houses, roads, schools, hospitals, etc.

The fear that the P-TOMS will enable the LTTE to rebuild their military bases within the 2 km area is completely unfounded.  Overall project proposals based on 'accepted needs assessment'for the reconstruction of civilian infrastructure damaged by tsunami can be handled by the P-TOMS. No funds can be allocated for any military activity, reconstruction or otherwise from the donor funds that will be disbursed for the reconstruction work of P-TOMS.

2. How does the Regional Fund work?

The purpose of the fund is to expeditiously make available funds to the six affected Districts of Ampara, Batticaloa, Jaffna, Kilinochchi, Mullaitivu and Trincomalee, 'following proper approved procedures' to facilitate and accelerate the relief, rehabilitation and reconstruction program in the tsunami-affected areas of the six Districts.

The regional fund consists of unspecified and secretariat funds.  The unspecified (program) funds shall consist exclusively of foreign funds while the secretariat funds shall consist of both foreign and local funds. The unspecified funds shall be used to finance post-tsunami reconstruction programs/projects in the above six Districts.  The secretariat funds shall be used to cover the recurrent costs of the Regional Secretariat.

The Regional Fund shall operate no differently to the manner in which all government ministries/departments/institutions function with regard to financial matters.  All existing laws and financial regulations will strictly apply to the Regional Fund.  The Regional Fund shall operate under the authority of the Treasury.

Projects recommended by the District Committees of P-TOMS and then reviewed and approved by the Regional Committee and thereafter by the High-Level Committee, have to be submitted to the Ministry of Finance (as in the case of all government institutions) for approval.  The Treasury will then allocate and disburse the relevant funds for approved projects.

The moneys thus allocated shall be granted to the relevant institutions of government authorized to implement each project.
Donor funds for tsunami relief, rehabilitation and reconstruction shall be maintained in a separate Central Bank Account.  The allocated program funds for the six Districts shall be transferred to the Regional Fund from the Central Bank, with Treasury approval, via a suitable Line Ministry (such as M/RRR) after such funds have been requested for approved projects by the High-Level Committee.  The secretariat funds shall be transferred to the Regional Fund after such funds have been approved for specific office overheads and maintenance activities pertaining to the Regional Secretariat in the same manner as above.

As above procedure has to be followed, no donor funds can be transferred directly to the regional fund.

A Custodian appointed by the parties shall maintain and execute the Regional Fund.  The Custodian shall seek to sign an Assistance and Cooperation Agreement with the Treasury for establishing the Regional Fund.

Once the funds have been received by the Regional Fund, the Custodian shall sign contractual agreements with each of the relevant implementing agencies, in respect of terms of reference, financial and administrative procedures and reporting requirements, on a project-by-project basis.

Specified project funds shall be coordinated directly by the donor agencies and the Treasury.  These funds shall remain outside the purview of the regional fund.

The Custodian shall be required to submit quarterly progress reports on projects financed by the Regional Fund to the Treasury and the P-TOMS. The Custodian shall be required to commission internationally accepted auditing and accounting practices for this purpose in consultation with the Auditor General.

These details were left out of the MOU because they were too cumbersome. Formal agreements do not usually contain detailed descriptions of the laws and regulations contained in them.

Such explanations are given if and when required.

As we have seen, adequate safeguards against misuse and mismanagement of regional funds have been built into this arrangement, which has been designed to ensure complete transparency and accountability.  This is what is referred to as 'following proper approved procedures' in clause 7(c) of the MOU.

Director General
Presidential Media Unit