By: Staff Writer
November 30, Colombo (LNW): The Sri Lankan water supply sector is facing renewed scrutiny amid allegations of large-scale corruption and irregularities in contracts awarded to Chinese state-owned enterprises (SOEs). The People’s Movement against Corruption (PMAC) has urged the Government to launch a thorough investigation following the disclosure of documents obtained through a Right to Information (RTI) request.
The documents reveal that from 2013 onwards, major contracts under the National Water Supply and Drainage Board (NWSDB) were awarded to Chinese firms including China Machinery Engineering Corporation (CMEC), China Harbour Engineering Company Ltd., and China Geo Engineering Company.
Funding for these projects came from the Sri Lankan Government, the Asian Development Bank (ADB), the French Development Agency (AFD), and the China Development Bank. While some projects are ongoing, the disclosed records indicate that numerous contracts were awarded at significantly inflated costs compared to initial estimates.
Key examples include the $70 million Ambatale Water Supply System Improvements and Energy Saving Project funded by the AFD, and the $157.43 million Jaffna-Kilinochchi Water Supply and Sanitation Project funded by the Sri Lankan Government and ADB.
Both projects list CMEC as the lead contractor, with a relatively obscure local company, Business Promoters & Partners Engineering Ltd., included as a joint venture partner. PMAC noted that the role of this local intermediary remains unclear, raising concerns about unnecessary local involvement.
Perhaps the most striking case is the $229.5 million Gampaha, Attanagalla, and Minuwangoda Integrated Water Supply Scheme, initially proposed as an unsolicited tender.
Funded primarily by a $195.075 million loan from China Development Bank and a $34.425 million loan from the Bank of Ceylon, the project’s final cost exceeded the original $172 million estimate by 34.8%.
Independent PMAC analysis suggests that lack of competition, unexplained delays, and irregular payments contributed to the cost surge, a concern previously flagged by the Auditor General in 2016 and 2018.
Other projects include the $120 million Tambuthegama Water Supply Project, contracted to China Geo Engineering, and the Greater Colombo Water and Wastewater Management Investment Programme, awarded jointly to China Harbour Engineering and China Geo Engineering through an ADB loan of Rs. 13,917 million.
Past COPE reports highlighted additional irregularities in NWSDB contracts, including billions in unrecovered contractor advances and unauthorized write-offs.
PMAC is calling for an immediate forensic audit and criminal investigation into all NWSDB projects awarded to Chinese SOEs, especially those granted through unsolicited bids or subject to unexplained cost escalations.
The revelations underscore serious governance and fiscal accountability concerns, with implications for Sri Lanka’s water supply infrastructure and long-term sector sustainability.
