Wednesday, September 28, 2022

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Chinese Exim Bank’s suspension of funding halts Central Expressway project

Sri Lanka’s Central Expressway construction project has met with an unavoidable obstacle following the decision of China’s state-owned Exim Bank to suspend the US$ 51 million loan for the first phase of the project.

The release of the funds from the Exim Bank of China has been halted at present owing to the current economic crisis in the country and the Sri Lanka Government’s decision to suspend repayment of foreign loans, Treasury sources revealed.

.asa result the construction company has decided to terminate the service contract of workers anfas result around 500 chinese workers have started leaving the country affecting the jobs of 2000 local construction workers in the area.

The construction work began in September 2021 and it was targeted to complete the work by the year 2024. Ministry sources disclosed.

32 percent of the Central expressway phase 1 project construction has been completed by using government funds amounting Rs33 billion.

The Central Expressway Project has been divided into four sections: Section 1 from Kadawatha to Mirigama is approximately 37 km, Section 2 from Mirigama to Kurunegala is approximately 39.7 km while the stretch from Mirigama to Ambepussa is approximately 9.1 km, Section 3 from Pothuhera to Galagedara is approximately 32.5 km, and Section 4 from Kurunegala to Dambulla is approximately 60.3 km.

The Ministry revealed that the tender process related to the third phase of the Central Expressway had lao been cancelled due to the dire economic conditions of the country and that no decision had yet been made with regard to if and when a fresh tender would be called in relation to the project.

It was further revealed that this cancellation of the tender process was made pursuant to the directive issued by the Finance Ministry to halt all capital expenditure.

This revelation was confirmed by Access Group of Companies Founder Chairman Sumal Perera, whose company Access Engineering was part of the local consortium named LDIC, which was linked to the tender process.

In July 2021, the Highways Ministry called for tenders from local and international companies interested in constructing the third phase of the Central Expressway. It was later revealed that proposals were submitted by the Metallurgical Corporation of China (MCC) and a local consortium named LDIC comprising Access Engineering, International Construction Consortium (Pvt) Ltd., K.D.A. Weerasinghe & Co (Pvt) Ltd., and NEM Construction (Pvt) Ltd.

However, controversy arose when it was revealed that the proposal submitted by MCC had not been considered by the Government on technical grounds and that only the proposal submitted by LDIC had been opened and considered, despite the fact that the bidding price of LDIC was higher by $ 822 million (56%) at $ 1.87 billion compared to MCC’s bid of $ 1.05 billion.

Therefore, it WAS evident that MCCI’s Bid has been disqualified for the total violation of the bidding process, including not complying with some fundamental requirements of the government procurement guidelines, thus showing scant disregard for the tender process.

As such, the bid price is not known to the public. In their futile attempt to mislead the evaluation process in order to sabotage the project, MCCI now seems to be quoting any arbitrary price in public.

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