17 December, 2017

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Central Expressway: Response To Rusiripala’s Questions

By Lakshman Kiriella

Lakshman Kiriella – Minister of Highways

While I thank Mr. Rusiripala Tennakoon for raising 17 questions with regard to the tender procedure on Central Expressway (තවත් උණුසුම් සතියක් – මධ්‍යම​ අධිවේගී මාර්ගය හා තවත් කතා Colombo Telegraph – September 28, 2017), I must correct him on factual issues. 

Question 1 – Is it true that the tenders have to be called only from the Japanese Contractors instead of calling public tenders, as the Japanese Government gives assistance?

Answer – When we obtain loans from the banks operated in foreign countries usually there is a condition that limited quotations from the contractors in those respective countries should be called. This condition is there in the case of the loan for the Section 3 of Central Expressway which was arranged with the intervention of Japanese Government from a private bank. At the stage of loan negotiations as well there has been an understanding between the two parties that the tender should be limited to Japanese contractors.

Question 2 – If it is so, what is the assistance received from the Japanese Government for this Project?

Answer – The loan was arranged with the intervention of the Japanese Government. The Embassy of Japan in Colombo played a key role in arranging this loan facility.

Question 3 – Is it not a loan obtained from Japanese Bank on Commercial Basis?

Answer – This cannot be considered as a full commercial loan as there are certain concessionary terms such as 6 years of grace period and 15 years of repayment period. Also annual aggregated cost of financing ranges from 2.02 to 2.22 (including Libor) percent according to the behavior of financial market. This annual cost of financing includes interest, annualized insurance, annualized commitment fee, arrangement fee and annualized agency fee.

Question 4 – If it is so, are the interest charged for the said loan and the re-payment schedule, so concessionary that one that cannot be obtained from any other commercial bank?

Answer – Currently, the rate of interest for this Yen loan facility is 0.95 percent per annum, whereas, the current annual rate of interest for commercial loans in the international market lies between 3 to 6 percent per annum for any dollar loan. On top of this, commercial banks would request the insurance, commitment fee, agency fee and other charges as well. 

Question 5 – Before taking the decision was there a further fact finding report done?

Answer – Any external loan facility taken by Sri Lanka government is being negotiated by the Department of External Resources. With regard to this facility also there were several rounds of negotiations with the respective bank officials by the Department of External Resources with the participation of officials from the Ministry of Higher Education & Highways.

Question 6 – Can the Minister establish that no other commercial bank can grant an interest lesser than this rate, and a repayment schedule?

Answer – Currently, Japanese Banks are the banks which offer much lower interest rates when compared with commercial bank interest rates worldwide. However, channeling financial resources from a commercial bank to an outside country is a difficult task, if there is no backing of governments of those countries where the respective banks are established. Especially, it is further difficult to obtain a long term loan with a considerable grace period equal to the loan duration and grace period provided for this loan.

Question 7 – If there is no such special facility or concession, is there any special reason to open the tenders only for the Japan companies?

Answer – As per the above explanations you may understand that this loan is a special loan facility. If we open this to other bidders the Bank of Mitsubishi may not be interested in offering this loan facility to Sri Lanka.

Question 8 – Does the Minister have any other evidence to prove that there is a diplomatic involvement of Japan other than the letter sent by the Japanese Ambassador, saying that they honor the tender procedure in Sri Lanka?

Answer – Initially, the Japanese Embassy has nominated and recommended three contractors for civil works and three consultancy firms for providing consultancy services for this project.  Subsequently they have proposed one more contractor to be included in the bidding process. However Japanese embassy has informed us the selection of bidders should be done through a competitive bidding process which is applicable to the consultancy service selection as well. 

Question 9 – Why was the Minister trying to submit a letter of a consultant who advice the Japanese Government on certain matters, as the stance of the Japanese Government?

Answer – The advisor to the Cabinet of Ministers of Japan has submitted a letter on this matter and also another letter has been submitted by the Counsellor, Deputy Head of the Mission of the Embassy of Japan on the same matter. Therefore it has been considered as the view of the Japanese Government.

Question 10 – Is it not a cover-up the truth and misleading the public?

Answer – It is expressed as the reality.

Question 11 – Has an opportunity been given to a company which was once rejected by the Government Tender Committee to apply again? 

Answer – At the initial tender process only one bidder out of the three bidders, who procured the bidding documents, submitted bid. However, this bidder had not submitted the bid security along with the bid. According to the Procurement Guidelines the entire bidding process was cancelled on the recommendation of the Procurement Committee due to the above lapse in the bid submitted by the single bidder. However, due to the reason for not submitting the bid security in the initial round of tendering, a bidder cannot be disqualified to submit its bid with proper documentation, at the subsequent invitations for bid. Accordingly, the same contractor has submitted its bid with the relevant bid security at the invitation for bid for the second time.

Question 12 – Why is the Minister asking to implement the expressway contract jointly with a company that was once rejected before, when the same tender was called and then deciding to award it to them the second time they applied?

Answer – There is no request from the Minister to implement this project with a rejected contractor two times.

Question 13 – Is it not an action which is in-compliance with the process of approving tenders in the country?

Answer – It has been decided to award this contract to the bidder who has been recommended by the Procurement Committee. 

Question 14 – Why is the Minister Kiriella trying to quote a normal inquiry made by the Ven. Mahanayaka Theros on the construction of the expressway, as an influence being made to him to construct the expressway expeditiously?

Answer – Ven. Maha Sangha is interested in constructing the Central Expressway as soon as possible because currently it takes 4 to 5 hours to reach Kandy city from Colombo on a normal day. There have been considerable concerns from the Ven. Mahas Sangha Rathnaya and the general public in and around Kandy city as well as from other cities such as Kurunegala, Matale, Dambulla etc…

Question 15 – The Minister states that “The Prime Minister explained this matter for almost half an hour” and does this means that he dislikes to state something more than that?

Answer – This is to stress that the government has given priority for this project.

Question 16 – Does Minister Kiriella not accept the fact that the criticism of the media was raised after the so called lecture of half an hour was given by the Prime Minister?

Answer – Some media persons are having their own private agendas. They hide true facts and highlight half-baked information taken out of context to the public.

Question 17 – Does the Minister not accept the rights of the people to ascertain that there are no filling up the pocket of somebody or unnecessary interest or a repayment schedule which may be a burden to the country, when incurring such a huge public funds?

Answer – As the Minister, I and the entire government accept that the public has the right to know the information of the entire spectrum of matters related to this project. Not only has this matter, with regard to any other matter also public had the right to know all the information. That is why the Right to Information Act has been in enacted by this government.  

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Latest comments

  • 8
    1

    Thank you Minister for taking time to answer the questions.

    This is democracy and transparency.

    I may not agree with some of the responses but respect your view point.

    This is what we want from public officials and public representatives.

    • 2
      1

      Dear Jagath Fernando,

      Yes, I listened to the full hour and 22 minutes of the video in Sinhala, and I, too, was impressed with the refreshing openness of the discussion. The undertakings are too massive, and the technicalities too intricate for me to have an opinion. When the Minister left owing to the need to meet the Attorney General, I was wondering if anybody would dare sit in his chair. Yes, that official took over from the chair from where he could answer most effectively.

      And there was the younger official speaking in to the single microphone; he gave very direct answers regarding the dealings with Banks. And it wasn’t a selected audience, was it?

      So, all in all, I think that your commendation is justified, and I’m deliberately sandwiching this with the comment by “The Oracle”. The problem with “The Oracle’s” comment is that one feels that whatever the content, he will say the same.

      *

      On the other hand, the man whose views I miss here is:

      https://kumarage.wordpress.com/

      Leading up to the 2015 Elections, he wrote two powerful articles. This was the first:

      http://www.sundaytimes.lk/141221/news/road-building-or-rip-off-128259.html

      The next even stronger, about “The Great Highway Robbery”.

      But is he the eternal critic? The author of this article quotes him in a newspaper published just TODAY:

      http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=173001

      And last year he’s written this article in Colombo Telegraph:

      https://www.colombotelegraph.com/index.php/the-cost-benefits-of-expressway-building/

      *

      The Great Bond Scam is being dissected now, after the event. It is good that this Road to Kandy is being discussed openly before agreements are signed. As citizens with no technical knowledge we can only welcome this new openness.

      270 words

    • 2
      2

      In the west, even the retail loans became 6.0% only recently. How come govt to govt loans became 6.0%. In Japan, retail loans are 0.0%. this rate should jacked up in order to get govt to pay for political donations.How did the the Construction minister got a Helicopter. Minister’s daughter is shown in photos as some higher up official. those are high robberies. ———- I heard some people wants horapalanaya disassembled and establish a new govvt. because thefts are carried out in open. When there gurantee, here the retail lonas are maximum 3.00% for retail credit lines. for otjer loans it became 2.65% very recently. That is all retail loans. Prime rate is here is 1.0%.

      • 0
        0

        No, retail loans are not 0.0% in Japan. This number is incorrect. It hovers around 1% and sometimes below 1%, but it doesnot necessarily mean 0.00%. That’s the reason the banks want to lend money to the projects outside the country; to make more money by comparatively higher interest rates. But 3% is not too bad (compared to 6% when loans were obtained for white-elephant projects previously) considering the grace period of 6 years. By the time the Central Expressway becomes operational, it will generate enough money for the government to pay the loan back. It is difficult to get 1% interest loans with 30 year grace periods nowadays, even though Ronnie De Mel managed to obtain such loans in early 1980s.

  • 4
    1

    Politicians and their kith and kin will continue to amass wealth at the expense of the poor tax paying public of this country who are struggling to feed their families . Let’s hope ‘someone up there’ is watching , and will prove his or her presence before too long .

  • 4
    5

    Well done LK Great this is what Yahapalanaya is.

  • 8
    3

    Dear Lakshman complete this project as soon as possible the country need this highway very badly.

  • 7
    4

    Very good keep it up this is what we expected from the Government as . Sirasa media coolie bastards now keep shut.

    • 3
      2

      Minister says that Mahinda Rajapakse govt did it without any tenders on just keepong the fonger on a list of comanies they thought would be good. Instead the minister is doing the same thing. He got loan offers only from the Mitsubhi Bank. He is adament he is going to give the contract only to the tytys…something company. Only one other company haded over an application. Minister does not have any problem if the two companies share it. Because the second company objected via the got. so to help the govt minister says, I don’t have ay problems if the two companies share the contract. what ever it is interest rate is exorbitant, too high. the question how will the minister gets money into his account. It is an open secret that some ministers have foreign currency accounts and they have investment overseas in the west and in ‘india etc.,. One news report said PENTHOUSE RAVI has accounts in China, Hong Kong, and Malaysia

  • 5
    1

    Thengai S.
    True sirasa is involved in shady deals with the executive. Frigate is just another fraud along with killi

    • 1
      1

      Rohan: why don’t you say, Japan stayed silent during the ar. did not try to give eelam very much. So, now they are milking it. Other wise, why should they negotiate a loan for 6.0% ?

  • 2
    1

    Western countries and their allies are pressuring Sri lanka to work in their way. So, they are giving contracts to Japan as a preferred contractor. So, may be be Japan is jacking up the interest rate. In the mean time, All the ministers need money for on coming election. govt, I think, gove Rs 20 million to each politician for the electorate work. that may not be enough as almost every ministr is building a palace some where. I heard, in the upcountry also some palaces are coming up.

  • 2
    1

    ITis a theft of govt money. Minister is proving that. IF he had to say what he says in front of Jury and Judges, he would be lost. First, they should hve explianed from how many banks they got offers for this. Becuse, with the govt gurantee as the collateral, Loan interest rate can not be 6.0% when Japan’s prime rate is 0,0%. Govt got offers from only one bank. Why?. Then minister as the higher education minister, says, that Sri lanka doe snot have an enigineer who can calculate how much approximately would spend for building the highway. Sri lanka has got foreign contractors for some times. roads have been built before this. Instead, Minister Srilanka does not have anyone only minister knows even Karu Jayasooriya cannot do is hiding the truth. Even the reputed foreign companies had taken more than five years. Why the govt can not get loans and ask sri lankan engineers to build the road slowly. when are we going to train our enigneers in Sri lanka. It is not respectable to say Mahinda Rajapakse givt was stealing becuse if that we are also stealing. but not that much…………… the reason is govt always had targetted only compay for the contract. Why did not ask the Japanese govt ask companies to provide open bids. Minister over ad over again emphasized he would give the contract only to one company. Why ?. Even the central bank day light robbery was carried out with the cabinet approval and by the prime minister, approved even by the president. even though Cabinet approved, no one from Sri lanka examined it it seems. Eventhough there is a auditor general, there are so many projects, even president acknolwedge, that over 50% of the projects are corrupt deals. So, the audtitor general should be counted out. Cabinet approaval should be counted out. PArticularly, another point is as the Central bank robbery was cabinet approved, as this deal was cabinet approved, it seems, every govt theft happens in front of the cabinet eyes and they knowing it and, therefore, there won’t be any prosecution. Even though they can be oprosecuted in a society where the law enforcement and justice follow the rule.

  • 6
    1

    The real voters don’t speak here! They are fed up, angry, hungry, and disgusted with Yahapalana politiks and politikkas who promised heaven but gave hell to average Sri Lankans. People call these politikkas ‘Yahapalana mafia’ or ‘Diyawanna mafia’. That public expression says all what we have to know about them.
    Today, on news, there is another Yahapalana guy, who, this time has apparently robbed a Bank in Thaiwan! He is the president of the ‘Swan party’ that President Sirisena’s Yahapalana coalition contested at the last presidential election. Good job Yahapalan bros!
    Today, the average Sri Lankans think the best comment to this type of interviews of money hungry politicos is to be silent until the Yahapalanaya holds some election. If an election is held we can see the impact of these proposed projects as well as their ‘completed projects’ such as the CB Bond scam.

  • 3
    0

    On the face of it , it sounds and looks very transparent . RTI deems it be open and factual.
    While I feel ill equipped at this stage to pass a value judgement on the veracity of the answers, for that matter, even the questions posed; the mere fact that the minister responsible, had taken the time and effort to respond directly , is applaudable and
    something that other elected as well as responsible public officials should endeavour to replicate
    The country is at a crossroads with the stagnant economy, paralyses in legislature, and the public apathy
    at all time high, doing nothing is no option!

    • 1
      0

      Than you, Ratnam Nadarajah.

      You are an engineer and although you may be the first to say that your technical knowledge may still be insufficient for you to make an instant evaluation of what you have read, your integrity and balance are well-known. I listened to the entire Youtube programme that we were given; I wonder whether your Sinhala was sufficient for the purpose.

      Yes, public apathy is high. It should not be so.

      • 1
        0

        Thank you Sinhala_Man.
        Your reply to Jagath Fernando with various references gives a good snapshot of the state of play as regards highways concept and construction and the politics in SL, over the years. Thank you for same. I am shocked to know the state of the Southern Express way and other highways. I believe that the authorities get enough revenue from the toll charges to at least maintain it. Design and construction flaws is another story . Where is the money being spent? Or is it being eaten by rats!
        I will track the YouTube you have mentioned and view same and comment in due course. I hope my Sinhala is still good enough after 50 years

      • 1
        0

        Building a road is trickier than sending a stattelite to the space or landing one on the moon. It is too hard to calculate material needed, man hours leaders machinary and machinary hours needed to complete one Kilometer of the road. what else is missing my list ?

        • 0
          0

          Building a road is trickier because you have to deal with people, their property and all kinds of social issues. This involve taking “calculated” risks and dealng with humans which is trickier than calculating the speed and other parameters..i.e. gravity acceleration, fuel required, velocity, etc, etc etc. And, sending a satellite to orbit is easier…..when someone else sends it and you tell people you did it! lol

  • 5
    3

    The most important “fact” which Minister Kirra kept telling the Public through the Mediia of course….
    Is that the construction of the Expressway is the mother of all Meritorial Acts of Yahapalanaya……
    That is for , Dr Ranil and Kirra to get our Sil Ammes in the South to Malwatta in Kandy , in the quickest way possible, to offer Bodhi Poojas to the Lord Buddha’s Holy Tooth………
    Hence the rush to build it ASAP………
    And Minister Kirra emphasized that the objection to their Expressway is a Sin of the Nth Degree , which ensures a quick passage ( another Expressway of course) to Narakadiya ( Hell )…….
    Malwatta Boss is pleased……
    How come no one asked that from the Hon Minister ?……

    • 2
      5

      Yes malwatta boss is pleased as well as 6.2million plus.
      Why is Sumane and Jimmy so jealous about this highway project and Jimmy seems to be restless with lots of arguments.

      Anyway Lakshman go ahead and complete this project on schedule no matter any medai coolies specially Killi Maharajas cheap journos criticizing it.

  • 2
    2

    Namal and his cohorts henchaiyas in the joint opposition group, who did not know the difference between an outright sale and a lease agreement, are trying to create unnecessary disturbances in the country with the ulterior motive of preventing foreign investors from bringing in investments to the country, High Education and Highways Minister Lakshman Kiriella said.

    Addressing a press conference held in Kandy, Kiriella said the people conducting protest campaigns today have conveniently forgotten that the former regime offered the Port City to China as an outright sale and it was taken back to Sri Lankan ownership only after the present government assumed office.

    Kiriella said the Hambantota Magampura Port and the Mattala Airport would be given over to foreign investors under a long term lease agreement since the government had no intention to sell them to foreign countries. He said certain sections of the media were also surreptitiously assisting the conspiracy hatched by the joint opposition group to wean away foreign investors. He said the contract for building the Central Expressway had been awarded according to a Cabinet paper and certain sections, who lost the contract after submitting bids, were trying to sling mud at the government in league with certain sections of the media.
    Source Daily News Today.

  • 1
    0

    Explanation 1 ~ “……..When we obtain loans from the banks operated in foreign countries usually there is a condition that limited quotations from the contractors in those respective countries should be called……….”.
    Japan understands our plight – remember their effort during the war aimed at reducing “collateral damages”.
    Did the minister request a deletion of this clause? If not why not?
    We accept that questions raised during the Norach-cholai fiasco had answers brought in white vans. Yes Sir, there is a change surely you must know that the unease of Lankans over the integrity remains.
    One has to wear glasses of certain tints to see transparency – otherwise as opaque as ever! We are in square one – different corner!

  • 1
    0

    To Vaiko,
    Hell-lo Vaiko, How’s life after UNHRC debacle? That Sri Lankan woman gave you hell there? yes! By the way, I did not know that you now speak on behalf of Yahapalanaya (in addition to what you had been doing so far from Tamilnadu in support of that imported animal that never existed in the northern jungles of Sri Lanka).
    It is fine to support an old buddy like Kiriella but don’t supply them with those dangerous capsules. I mean not for now! After the next election there may be an unusual demand for this infamous ‘vial’ among your Yahapalana buddies.

  • 0
    0

    Rather than borrow at commercial rates of interest to build a highway to Kandy , the government should improve means of mass transportation . The highway is not going to stop people travelling on roof tops of the Kandy – Colombo trains to get to work . Perhaps these highways are more profitable for a ” privileged few ” who will con our gullible (m)asses into believing that the Colombo – Kandy Highway is the panacea for all our ills .

    • 0
      0

      I am from the south and I know how we longed for a highway. In spite of all the and the high price we still were happy at the end of the day.
      Why can’t we wish the same for our upcountry compatriots?
      Don’t they deserve to travel at ease?
      Besides the Kandy Highway project comes on a platter of gold.
      First and foremost, we will be lucky to have the Japanese handling it, obviously the quality standards will be higher secondly and Sri Lankan labour component will be higher. Thirdly interest rates are much lower than those of Rsjapaksa highways.
      What more could you possibly ask for?
      There is no limit to the meanness in our hearts. No matter what we are given we can only complain, particularly if someone else stands to gain.

    • 0
      0

      What are the commercial lending Rates you get in Sri Lanka? Upwards of 10% is it not?
      The loan for the Kandy Highway is sub-single digit interest loan, what more do you want.
      By the way open your mind my friend, building a proper Highway is the starting step to improving public transport as well.
      The present railway and roads are incapable of handling more.
      In fact they will have to follow up with an upgrade to the railway line as well in the future just as the coastal railway line was upgraded alongside the construction of the southern Highway.
      Jess grow up Man and start thinking with your brain and not with your heart.

      Lasith

  • 0
    0

    Did you read the reply carefully.many have not taken rate of interest correctly.as for the above replys it appears that rate of interest and other charges for this loan is between 2.02-2.22 .% which is very concessional.

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