17 June, 2019

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Ranil Awarding Expressway Contract To Controversial MCC Raises Questions

Prime Minister Ranil Wickremesinghe’s decision to award the Central expressway construction contract to the Metallurgical Corporation of China raises a plethora of questions.

Prior to the last Presidential polls it was Wickremesinghe and Co. who accused the company of helping some top-notch politicians of the previous Rajapaksa regime to pilfer billions of rupees by inflating the construction costs of expressways.

China Sri Lanka RanilIt was with regard to this company that the President Maithripala Sirisena’s manifesto claimed that ‘ If a total of Rs. 7.3 billion is spent per kilometre on the construction of the Kadawata – Kerawalapitiya highway, the amount pilfered is Rs. 5.2 billion.’

With reference to the above Minister in charge of the subject Kabir Hashim’s memorandum to Cabinet in April 2015 declared that the contract had been awarded in January 2013 for Rs 66 billion, for 9.32 kilometres. He recommended that the scope of the highway be changed.

(1) To construct the expressway with 4 lanes (abandoning the provision to widen to 6 in the future)
(2) To reduce the length of viaducts
(3) To reduce the height of viaducts

The Memorandum says there could be a substantial saving, but it does not say what this would be.

The report on the subject, dated, March 23rd, indicated that, with several changes to the scope (including the omission of one proposed interchange) the contract should cost Rs 41 billion. It also suggested a reduction of 25 per cent in rates.

This last point is not mentioned in the Minister’s memorandum. Certainly the report and his Memorandum make nonsense of the claim that the contract should have been for less than 20 billion.

Then matters get more curious. On March 30th the Prime Minster submitted a note to the Cabinet to say that ‘Unsolicited proposals in general should not be accepted as a matter of policy. In the future, all proposals should follow the Guidelines on Government Tender Procedure issued in 1998’. However there was provision for the Cabinet Sub-Committee on Economic Affairs to review the ’35 unsolicited proposals’ now in the pipeline and report.

This Sub-Committee at a meeting on June 30 gave instructions to submit information at the next meeting to decide on contractors for each stage of what is now termed the Central Highway.

Less than a week later the Prime Minister prepared a Cabinet paper in which he said that ‘The government had already agreed that they (MCC) should utilize the savings in OCH3 to undertake construction of a few kilometres on the first section of expressway from Kadawata where the OCH3 terminates’.

The Cabinet Paper does not mention the amount of the savings. There is no indication of when or why the government had agreed to these terms with MCC. All this suggests that, far from acting on the assertion in the Manifesto that the Kadawata-Kerawalapitiya Highway was a source of massive commissions to the last government, the new government was determined without following tender procedures, to award yet another contract to this same company.

Meanwhile the Secretary to the Ministry who had prepared the frameworks for competitive bidding, was summarily dismissed by the minister.

It is interesting to note that the dismissed Secretary Udaya Seneviratne was part of a three member committee appointed by Kabir Hashim to review the former Government’s highway projects. The other members were Faiz Mohideen and M.B.S. Fernando.

The committee after reviewing the projects had noted that the cost of several projects were highly inflated and had recommended their continuation on a smaller scale. The Committee had pointed out that the cost of the OCH3 was at least 50% higher than the price based on rates for the Colombo-Katunayake Expressway.

The committee presenting their findings had said that the OCH project was awarded to the Metallurgical Corporation of China (MCC) on an unsolicited proposal. When Colombo Telegraph contacted Seneviratne for his views on the new developments with regard to road construction and the reason for his sacking, the former secretary refused to comment on both issues.

Meanwhile media reports said that Seneviratne was removed from his position after the Minister Hashim and Deputy Minister Eran Wickremaratne had found that the Secretary was responsible for some serious blunders.

It was reported that Seneviratne may have been involved in inserting a Cabinet paper on an unsolicited proposal for a monorail project in Colombo in to the Ministry dossier to be presented at the weekly Cabinet meeting without the knowledge of the Minister or the Deputy Minister. Interestingly, the Cabinet paper had been prepared when former President Mahinda Rajapaksa was in power.

On August 03, construction work on the first phase of the Central Expressway from Colombo to Kandy was launched by Ranil Wickremesinghe at Kadawatha. The first stage of the Expressway will be constructed from Kadawatha to Meerigama. The 2nd stage of the expressway will be constructed from Mirigama to Kurunegala and under the third stage it will be constructed from Kurunegala to Kandy. Constructions will also be carried out from Kurunegala to Dambulla as well. The total distance of the expressway is 98km.

Speaking at the event the Premier said that the government had awarded the contract to Metallurgical Corporation of China as the company had agreed to construct the road at a cost which is 50 per cent lower than previous estimate. Soon after this the UPFA convened a press briefing and said that only the estimated price has been changed with regard to the construction of the expressway but the company and the bank had not been changed. Former Minister Dilan Perera said that the Prime Minister had put forward the new cabinet paper instead of an old cabinet paper submitted by the Ministry of Highways. Perera went on to say that Wickremasinghe had pilfered over Rs. 50 billion though the new cabinet paper put forward by him with respect to the Kandy-Colombo expressway project. However Perera did not elaborate on how the premier had done this deed.

Meanwhile when contacted the Metallurgical Corporation of China rejected claims that it was involved in inflating costs in relation to any project. A spokesman for MCC said the company was one of the top ten global firms and has completed contracts all over the world with high professionalism and quality. The spokesman said that it was unrealistic to compare the costs of the OCH project with that of Colombo Katunayake Expressway as there were different geographical conditions involved and different requirements. He said that the EXIM Bank had provided the loan after a detailed evaluation.

The contradictory details presented by various stakeholders related to the above project raises more questions than answers. More details which will shed new light on the above issue will be revealed in this website in the near future.

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Latest comments

  • 18
    6

    Thank you CT for your continued expose of another dictator in the making.

    Knowing how Ranil has been a dictator within the UNP party and stifled any opposition and intra party democracy we can rest assured that we will have another dictatorship in our hands if he becomes PM.

    This is the same guy who before the election promised to scrap the port city project and it continues…..

    The same guy who promised to scrap the controversial KRISH land deal and that continues……

    and now this …… what a crook just like Mahinda.

    Can this nation not find anyone else?

    • 5
      2

      Ranil’s rotten revolution by bandit royals
      to become the dictator, better than JR himself.

      “”Can this nation not find anyone else?””

      Lankans are a solidarity nation wherein
      Just smart asses get smarter.

  • 16
    1

    Why this hurry to award such a large contract just before the election, and while the evaluation of contracts for Port City etc., is going on, puzzling.
    We should wait until after the election when a new stable government would be in power.
    Why was competitive bidding ‘dismissed’?

    Are palms being oiled again?

  • 14
    1

    Shameful.

  • 8
    1

    Perhaps they have friends in very high places .

    • 1
      0

      [Perhaps they have friends in very high places]they might be in so called high places but character’s of them are proven Low Life’s.

    • 1
      0

      You mean like Untouchable, Uncountable, Under a cloud former & present Central Bank Governors Cabrall & Arajuna Mahendran in the case of Mahendran he comes with a untouchable attachment his own son in law.

  • 18
    2

    Why are these things not done in a transparent way ? Is it because as Ranil says the people dont understand the complex process of international tenders ? People also don’t understand the complex process in which Ranil is playing them for suckers?

    The hypocrisy and corruption of the Ranil, Ravi, Malik and Mahendran gang will beat the former rogues easily because these guys are more sophisticated and most people will not notice or realize it.

    The old dadas of colombo ( supporting Ranil)are too simple minded to see the sophisticated con job of Ranil and Co.The others like those involved in the shoot out in Kotahena don’t care anyway.

    Sri Lanka is a very unfortunate country !

    • 5
      2

      Do you notice something among the comments? The usual Ranil’s choir boys are missing in this thread, singing their usual praises to this man. LOL Too ashamed by this expose of their man? “MR CLEAN”?

  • 7
    0

    None of us or them are angels. Knowing that he is on the last few laps of his political life, he may have decided to stack away something for his retirement.

  • 0
    0

    The delay in publishing a clear statement clarifying the charges made by the UPFA is atrocious. This is the decision taken by the Cabinet on 22.07.2015.

    The section of the road from Kadawatha to Meerigama is to be contracted under the first phase of the Central Expressway. A section from Kadawatha to Kossinna, approximately 5 km long, is expected to be completed from the savings of the third phase of the Outer Circular Highway and its preliminary works have already been commenced. The proposal made by Prime Minister Ranil Wickremesinghe, to award the contract for the construction of the road section of 32.55 km from Kossinna as per the recommendations made by the Discussion Committee appointed by the Ministry of Finance according to the decision made by the Cabinet Subcommittee on Economic Affairs, was approved by the Cabinet of Ministers.

    The cost for 32.55 from Kossina to Meerigama is not disclosed and hence requires disclosure.

    The section from Meerigama to Kurunegala will be financed by the Asian Development Bank and a link to Kandy from Pothuhera will be financed by the Japan International Co-operation Bank. These parts are likely to be transparent.

    Contracts signed by the previous government can only be re-negotiated and commissions paid at that time are included in the cost of this contract. Hence, at least the section up to Kossinna cannot be classified as an unsolicited tender,

  • 7
    2

    What does Eran and harsha got to say about this award of contract ???
    Where is the change?????????????

  • 8
    3

    Ha ha ha…CT after beating the Yahapalana drums seems to be putting its feet in the mouth on the corruption allegations of MR. Stand up like a man and admit you [edited out] planted allegations to discredit MR.

  • 2
    4

    CT

    Please don’t write articles arbitrarily. Give exact facts and figures.

    What I gathered is that the road will cost a total of 200 Billion LKR. Considering that it is about 100 Km long,the average cost comes to approximately 2 Billion per Km.

    Is that not a huge improvement over the last one done by the previous government which was around 9 Billion per Km? Besides there will be 30 over passes and 5 under passes included in this cost.

    • 3
      1

      Dilan Perera, Bandula G and another idiot made a politically charged accusation in the heat of an election. CT rushes in chanting the same numbers used by these three stooges. All the MR sycophants rush in adding their two cents worth of vitriolic comments. As I see it this was rushed thru to counter MRs Kurunegala stunt. It is a political counter attack. This high way cuts thru to Kurunegala and so it will buy some votes come election day for the UNFGG. It also signals to China to back off meddling in our elections which they were attempting. Are these numbers corrct? Most likely not.

  • 3
    0

    This shows maturity as we are taking a non aligned view. The weakness of this is China normally does not have the capability of proper evaluation of projects. We however insist and assesing past projects helps us to moniter. The china Infrastructure Bank has wide sponsership including Germany. We now will know where we are going.

  • 3
    2

    This is another one of those Ranils magics.Only the plaque that was unveiled was new and the project is the same old northern highway now with now called ‘central’with an added 30bn price tag. Another scam job before the date of expire.

  • 0
    0

    One political party blaming the other for pilfering and vice-versa. The contractors, bankers etc. are the same. The scope is twisted here and there. What must the common man understand out of this?

    Either this blaming each other for inflating costs is a down right lie to malign each other and take the people for a ride or both the parties by making noises have indeed pocketed out something.

  • 0
    0

    same sex marriages should be legalized and may be even made compulsary.The best talants in everything including crook & pervert behaviour is in that area

  • 0
    0

    Please note that there are heavy penalties if a major road contract is awarded including commissions for those who awarded the contract. Hence, a new government can only negotiate minor changes and at best a reduction. This reduction is the construction of 5 Km of the Kandy Highway up to Kossina with the savings from Kadawatha -Kerawalapitiya section.

    The pricing of the balance depends on whether there is already a contract awarded to this company, which includes the commission collected by the previous government who awarded a contract for the Northern expressway. Once a commission is collected from a contractor at the time of awarding a contract, it cannot be recovered!

  • 0
    0

    He has always been a dicatator, for sheer LUCk there is crisis in the UPFA and UNP getting the benifict,but it wont be easy hence JVOP will get ore seats to make a very loud noise to expose the Royal Horu of UNP. The UNP guys are capable of robbing in English, colombo 7 style.

    RW will never promote any memebr within the UNP with a political inheritcance, just see how he sidelined Wasantha Senanayeka( grand son of DS Senanyake) where he made him to get elected from Pollonaruwa distric when he has a strong vote base at Gamapaha.Instead of him Gonja( Ranjan R) was sent to Gamapaha.RW never promotes intelectual Edcuated Connected people with a political inheritance. He is again sorrounded by Royal Rogues calibre of Ravi K. \

    better soultion will be JVP.

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