Chinese funded Gin-Nilwala project clouded by malpractices
The Chinese-funded Gin-Nilwala river irrigation project has been marred with financial misappropriation and irregularities, a government audit query revealed.
The government has spent a sum of Rs.4 billion exceeding provisions made from the annual budget estimate for the project when signing the agreement with China CAMCE Engineering Co Ltd by the previous Rajapaksa regime.
The total project cost is US $ 690 million and relevant agreement has been signed with the Chinese company to enter into an Engineering, Procurement and Construction (EPC) contract.
No benefits whatsoever had been received by the government even by November 15, 2017, it is learnt.
Providing state resources valued at Rs.4 billion for an external foreign party to make use of over a period of 18 months had been attributed to misuse of state resources, the audit report revealed.
Details of financial misappropriation have transpired during the audit inspection on the Gin-Nilwala project commission issue.
Former Irrigation Ministry Secretary K.D. Ivan Silva had signed the contract for the Gin-Nilwala project on behalf of the Sri Lankan Government.
The audit query revealed that he has allegedly misappropriated part of the 5 per cent commission that is said to have been part of the deal.
Eleven cheques had been used by the suspect to transfer Rs. 78 million from his account while Rs. 22 million had been transferred to his brother-in-law’s account, investigations revealed.
The Gin-Nilwala project tender was awarded during the Rajapaksa regime and payments of Rs. 4 billion had been hurriedly made before the Government changed in early January 2015.
The tender was awarded in an unsolicited bid at that time.
The main aim of the project was to minimise the damage to the environment and properties when the river floods during the rainy season and provide drinking and irrigational facilities to the Hambantota district.
It will also improve existing irrigation systems, introduce commercial agriculture development and provide industrial water requirement for the proposed Greater Hambantota industrial development area.
Even though the guarantee for the mobilisation advance produced by the contractor was due to have expired on December 8, 2017, the Ministry had failed even by November 15, 2018 to extend or to encash the said guarantee, the audit query revealed.
Minister of Megapolis and Western Development Patali Champika Ranawake had not signed the report of the Committee of the Economic Management at that time.
The Auditor General’s report concluded that the parties responsible for the matters such as the identification of the project, the selection of a contractor, grant of advances, implementation and follow-up in connection with this project had, by a considerable level, defaulted in appropriate planning, protection of transparency, compliance with regulations, etc.
It was since there was non-receipt of any considerable benefits as compared with the money spent by the government in this process, the officers who opened up ways and means for the uneconomical utilisation of state resources should be responsible for such acts.