Sri Lanka pays high price for north-south friendship
Sri Lanka’s Transport Ministry is seeking an additional sum of US$ 52.10 million (Rs.6.8 billion) from the Treasury to bridge over-spending on the Northern railway line which was opened by the President this week along with the resumption of the Yal Devi train service to Jaffna with much fanfare.
Transport Minister Kumar Welgama recently forwarded a cabinet memorandum seeking approval to present a supplementary estimate in parliament to get additional funding as the cost has gone up beyond the original estimates. According to the cabinet memorandum, the previous estimated cost for the construction of the railway line was $370.94 million and it has now increased to $623.94 million raising questions on the legitimacy of the estimate made by the Sri Lanka Railways Department.
Railway trade unions alleged that the construction work carried out by two Indian companies, IRCON has been tainted with financial misappropriation, waste corruption and commission taking of influential persons with links to the government’s top rank. That is why the department has to seek an additional sum of money to meet the expenses, they charged. The Northern Railway line project was completed in three stages. The cost for construction of the section of railway line from Palai to Kankesanthurai has increased to $166.68 million from the estimated amount of $149.34 million while the cost of construction of the stretch from Madhu to Talaimannar has gone up to $164.07 million. The construction cost of the section of the railway line from Omanthai to Palai has also been increased to $195.75 million from $185.35 million. The electronic signaling system had been completed at a cost of $96.5 million surpassing the estimated cost of $86.51.
The reconstruction of the railway line between Thandikulam and Omanthai has been offered to the highest bidder IRCON International Ltd of India at the rate of Rs. 80 million per km although Sri Lanka Railways quoted a price of Rs.40 million per km at that time.
The Northern Railway line construction was carried out in several sections -Medawachchiya to Madhu, Madhu to Talaimannar, Talaimannar to Omanthai, and Omanthai to Thandikulam and to KKS. The Sri Lanka Railways Department imported the railway tracks and the necessary bridges from Belgium and Austria to reconstruct certain parts of long track, a senior official of Sri Lanka Railways told the Business Times.
On the other hand the department had no manpower to handle such a massive railway line reconstruction project and it has only 17,000 employees to operate 325 trains and maintain 337 railway stations, he said adding that their only option was to hand over the project to IRCON as the project cost was borne by an Indian line of credit.
Railway trade unions charged that the cost of construction has increased to Rs. 340 million per km from the earlier estimate of Rs. 80 million per km made by IRCON. If the Railway Department had undertaken the project with local manpower and expertise the cost could have been reduced to Rs. 80-100 million per km from its previous estimate of Rs.40 million, a trade union official said.
He noted that the government should answer the question as to what happened to the money allocated for the project under the Indian credit line as the people have to pay for everything through indirect taxes.