Concern over port deals

Bids for the massive Colombo South Harbour infrastructure project were opened on Monday with three companies having submitted bids but not without some controversy swirling around one bidder. The bidders are Hanjing Heavy Industries and Construction of Korea (Rs.76 billion), China Harbour Engineering Company Ltd (Rs.61 billion) and Hyundai Engineering Construction of Korea (Rs.36 billion). Informed sources told The Sunday Times FT that Hyundai had initially been the highest bidder but due to some improprieties, had significantly lowered its bid.

Sources say that Hyundai was desperately trying to knock off the other two companies. Bid proposals for the project were called in December 2006 and closed on May 8, 2007. An evaluation of the bids has been completed by a Technical Evaluation Committee as well as a Cabinet Appointed Procurement Committee. According to reports, the final recommendations of the Cabinet Committee have been sent to the Asian Development Bank (ADB) for approval. An award is expected to be made during the course of the coming week.

In the meantime, in a related project that has also drawn similar controversy, the government hopes to finalise the successful bidder for the construction of the new terminal by the end of the year, a top government official said.

“We are hoping to finalise the company before the end of the year," Tilak Collure, Secretary, Ministry of Ports and Aviation told The Sunday Times FT.

He said the government gave an initial period of two months, but the complexity of the project needed more time. He said the matter is before the Cabinet Appointed Negotiating Committee and the Project Committee. When asked whether at any juncture the evluation was referred to the Attorney's General (AG's) Department, he said it is standard procedure. "At various points in evaluation we need to refer the matter to the AG's to get legal opinions. It is a normal procedure," he explained. Industry sources have said earlier that they fear the bidding process would be manipulated to suit some bidders.