News
Fisheries harbours in murky waters
View(s):Payments on a multi-million rupee consultancy for conducting feasibility studies and designing fisheries harbours in Silawathura, Gurunagar and Gandara have been suspended pending a review, officials said.
The assignment was awarded last year to Power Asia Consultants which, according to its website, was incorporated in 2014. The company has estimated each harbour to cost around Rs. 6 billion, thereby charging the Ministry of Fisheries and Aquatic Resources Development a massive Rs. 177 million in consultancy fees. This is 0.95 percent of the total cost of Rs. 18 billion for the three harbours.
The Sunday Times received written representations saying the bills of quantities tabulated by Power Asia for each of the harbours seemed highly inflated and unrealistic. It was alleged that this was done in order to raise its fees.
“The consultancy fee of Rs 177 million was calculated based on the value of the project,” it was claimed. “In the consultancy business, a percentage of the project value is paid only in detailed designs, where actual cost of the project is clearly known, based on an accurate estimate. However, in a project feasibility and preliminary design stage, the value of the project is not known accurately. Hence, consultancy fees are never calculated based on an approximate project cost. The fees are calculated as a lump sum fee.”
It is also alleged that the consultancy was carried out within a period of two months. This amounts to Rs. 85 million per month—a figure that is said to be incomprehensible in the consultancy industry.
“The corrupted bunch of people even forgot that the said three harbour developments are at a different scale and cannot be of similar value,” a written complaint states. “For example, the Gurunagar harbour is developed inside the Jaffna lagoon where no major structures are required. Still, this project is also estimated to cost close to Rs. 6,000 million.”
An initial sum of Rs. 46 million has already been paid. However, shortly before the January presidential election, the then-Secretary of the Fisheries Ministry ordered reviews of several tenders that had been awarded, with this consultancy being one of them. As a result, the payment of the remaining Rs. 131 million is pending. The Ministry has requested Government auditors to inquire.
Secretary of the Ministry of Fisheries Nimal Hettiarachchi referred the Sunday Times to Project Director Nihal Somaweera. “The project office will have more details,” he said. Meanwhile, Mr Somaweera said he had sent the estimates to the Chairman of the Ceylon Fishery Harbours Corporation for his approval. “Once his observations are received, we can take a decision,” he maintained. All details are being looked at before payments are made, officials said.
“This is based on jealousy of the people,” said Chamath de Silva, Chairman of Power Asia countered, when contacted for comment. He said a review of their costs must be done by independent professionals. Despite its website saying Power Asia was incorporated in 2014, he claimed it was set up in 2010 and had previously done feasibility studies for the Government. This includes the re-establishment of fisheries infrastructure in Karainagar, Jaffna. The website does not contain information of such work and internet searches on other consultancies carried out Power Asia yielded nothing.
Mr de Silva said the costs cited by Power Asia were comparable to those incurred in the construction of the Dikkowita fishery harbour. It was built at a cost of Euros 51 million (Rs 7.5 billion at the current exchange rate), with much of it being a soft loan from the Government of Netherlands.
“We did the study and design according to the requirements set by the project,” he continued. “There may be different stories but our costs are 100 per cent correct.” He rejected allegations that Power Asia had secured the consultancy based on connections with Chathura, the son of Rajitha Senaratne, then-Minister of Fisheries and Aquatic Resources Development.
“We have no connection,” he said. “We are just friends”. The Sunday Times also interviewed Kumar de Silva, the previous Project Director under whom the consultancy was awarded to Power Asia. He is the Chairman of Cey-Nor Foundation. He confirmed that the Power Asia project is now under investigation.
But Mr de Silva, too, claimed Power Asia had carried out Government contracts before. He confirmed that Power Asia was given “six weeks or two months” to submit the results. Quotations were obtained from a list of four consultancy firms, shortlisted on the basis that they had done work for the Ministry before. Power Asia was their selected.
Their reports were vetted by a technical committee that included engineers and a procurement specialist, he insisted. A presentation was done before Minister Senaratne, the Fisheries Ministry Secretary, representatives of the Fishery Harbours Corporation and many others. The company answered many outstanding queries.
Mr de Silva pointed out that this was “a very specialised field” and that “there are not very many consultants” to carry out the work. Power Asia presented estimates, design, evaluations and various studies on a limited timescale based on specifications given, he said.