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Highways Ministry seen keen to award expressway building to CHEC
The Roads and Highways Ministry is “bending backwards” to award the elevated expressway from Athurugiriya to New Kelani Bridge via Rajagiriya to China Habour Engineering Company Ltd (CHEC), despite there being at least five other proposals on the cards, authoritative sources said.
Talks between CHEC and handpicked Ministry officials continued even during the all-day curfews in the Colombo District, Ministry officials said, adding that there was “a complete lack of transparency” regarding the costly project.
According to the CHEC’s unsolicited proposal – seen by the Sunday Times – the Government will, at a minimum, have to pay back US$ 136mn (Rs 25.3bn) per year for 20 years which is more than US$ 2.7bn (Rs 503.4bn) in total. A second option is to repay US$ 168mn (Rs 31.3bn) per year for 18 years which amounts to US$ 3.024bn (Rs 559.4bn) in total.
These prices have been cited for a road that is approximately 18km in length. As previously reported by the Sunday Times, the Road Development Authority (RDA) had even drawn up a bulky request for proposals (RFP) which was about to be released to several shortlisted candidates who had gone through a rigorous expressions of interest (EOI) process since 2017.
However, Highway Secretary R W R Pemasiri has opened negotiations with CHEC for Central Expressway Phase III and for the elevated expressway from Athurugiriya to New Kelani Bridge without facilitating open tenders.
CHEC has even directly asked for documentation from the RDA’s project team, including studies done for the RFP, the sources said. The Highways Secretary also permitted the Chinese company to carry out soil testing alongside the road trace.
In May, Mr Pemasiri appointed a Project Committee headed by an RDA engineer. Among other members are Additional Director General (Network Planning) W E S K Fernando, several RDA engineers, Board of Investment Director General Sanjaya Mohottala and Director Macro Economic Development at the National Planning Department (NPD) T M J Bandara.
The Transport Secretary’s plans to have a draft MoU signed with CHEC on May 21 were foiled by protests from Mr Mohottala who maintained that the BOI wishes to evaluate the other five proposals before such agreements can be reached with any party.
The NPD also objected on several grounds, including a circular from Secretary to the President P B Jayasundera which laid down strict guidelines for entering into any new commitments or MoUs with foreign Governments or organisations. Among other things, prior approval of the Attorney General and the Cabinet of Ministers is deemed necessary.
And, in the case of an investment proposal, they must all be referred to the BOI where a nominated experts panel will carry out due diligence on the investor, proposed funding sources, likelihood of success, etc, and will also examine the proposal in the context of the policy framework of the Government – including land, environment, legal and regulatory obligations.
Following NPD’s objections, the Project Committee concurred that it had no authority to discuss the MoU. Mr Pemasiri then ordered the group to be dissolved, the sources said, adding that fresh EOIs should be called to ensure transparency and that the Government gets the best price and deal.