May 27, Colombo (LNW): Concerns are mounting over a significant delay in awarding a major infrastructure contract aimed at upgrading passenger services at Sri Lanka’s Bandaranaike International Airport (BIA) in Katunayake.
The delay, which has stalled improvements to vital check-in and boarding facilities, is reportedly causing mounting financial losses and has now drawn scrutiny over suspected procedural irregularities.
The project in question is designed to expand the airport’s capacity to accommodate the rising number of travellers, especially in light of the recent surge in tourist arrivals.
Despite this urgent need, the procurement process has reached a virtual standstill, with allegations surfacing that the government may be incurring avoidable financial damage as a result.
The contract, valued at billions of rupees, was originally tendered in early 2024. The lowest bid—amounting to approximately Rs. 5.97 billion—was submitted jointly by a Sri Lankan firm, Consulting Engineers and Contractors (Pvt) Ltd (CEC), and China Association of International Engineering Consultants (CAIEC). Their joint venture narrowly beat the second-lowest proposal, submitted by Sanken Construction (Pvt) Ltd, which came in at Rs. 6.36 billion—a difference of Rs. 392 million.
Several other prominent firms, including Maga Engineering, China Civil Engineering Corporation, and a joint bid from Thudawe and China Harbour, also participated, with offers ranging up to Rs. 7.7 billion.
However, on 18 March 2024, a letter issued by the Secretary to the Ministry of Ports, Shipping and Civil Aviation indicated that the CEC–CAIEC bid was disqualified on the grounds of failing to meet a “mandatory requirement.” The nature of this requirement was not clarified in the communication.
Following this, CEC sought clarification from both the Ministry of Transport and the Procurement Appeal Board. They were later informed that their bid had failed to qualify for “Domestic Preference” under a clause in the national procurement framework.
This was despite prior confirmation during a pre-bid meeting in December 2023 that joint ventures with a 51:49 split in favour of local ownership would be recognised as local bidders—a structure that the CEC–CAIEC partnership adheres to.
Industry insiders have voiced concern that this reasoning appears inconsistent with the earlier guidance provided to bidders. There is now growing pressure on authorities to explain why the tender was not referred back to the technical evaluation committee for a proper reassessment.
The situation has been further complicated by legal action initiated by Sanken Construction, which has effectively halted the tender process for nearly a year. Critics argue that awarding the project to the second-lowest bidder, at a considerably higher cost, would not only represent poor financial stewardship but may also point to undue interference from politically connected individuals in the former administration.
With the new government pledging to root out inefficiency and corruption in public spending, calls are intensifying for immediate intervention. Stakeholders argue that restarting the entire procurement process from scratch would not only delay much-needed airport upgrades but also risk exacerbating the financial burden on the state, particularly at a time when foreign tourism is poised to play a central role in economic recovery.
Delays in implementing the project are also believed to be harming Sri Lanka’s global image as a travel destination. Prolonged congestion and outdated facilities at the island’s primary international gateway could deter future visitors, undercutting the efforts of the tourism sector and slowing the flow of much-needed foreign exchange.
Ultimately, the cost of these administrative and political mishandlings is expected to fall squarely on the shoulders of the public. As government expenditure rises without proportional returns, questions are increasingly being asked about accountability, transparency, and the real cost of missed opportunities.
