High level probe into Central Expressway Phase III tender

In a dramatic turn of events, a high level investigation will get underway into the Central Expressway Phase III tender on the directions of the Prime Minister following concerns expressed by the Japanese government.

Prime Minister Ranil Wickremesinghe intervened and instructed the Road Development Authority (RDA) to investigate as to how the "highest" bidder of the recently concluded Central Expressway Phase III tender was accepted as technically competent whilst there were accusations of the facts being otherwise, official sources said.

Japanese authorities have informed the Prime Minster that Fujita Corporation, the lowest bidder is a prominent civil works contractor which is technically and financially capable of constructing the expressway.

The Cabinet Appointed Negotiation Committee had invited Taisei Corporation, one of the two selected bidders for negotiations without considering the other bidder Fujita Corporation which was rejected by a tender evaluation committee.

This decision was made on the grounds of a condition stipulated in the tender that the successful bidder having to have successfully concluded a contract which is over US$ 650 million in value.

It is common practice in the world that the large projects are divided among many companies. Hence there are not so many large value road pro- jects in the world.

Taisei Corporation which quoted the highest price "claimed" to have completed such a project in Algeria, according to documents submitted to the tender evaluation committee.

However, supporting documents and information disseminated in local and overseas media recently, revealed that this claim cannot be substantiated and the bidder should be technically disqualified.

Taisei did not submit their completion certificate for the project as part of their November 23, 2016 bid submission which is a major deviation and should result in an immediate non responsive bid as per clause 6.4 Instruction to bidders.

The PM’s intervention not only corrects the tender process and instills the spirit of good governance but also will save the country more than Rs. 12 billion since the bidder to whom the RDA was proposing to award the contract had a price difference of over Rs.12 billion than his competitor.

The project is based on a yen loan equivalent of US$1 billion from Sumitomo Mitsui Banking Corporation for the tender exclusively for Japanese / Sri Lankan Companies (Prime/Sub Contractors).

The funding for the project is exclusively being arranged by the Japanese government. Japan’s involvement was intended to rebuild strong bilateral relations between Sri Lanka and Japan and also to rebalance geopolitical influence in the region which is presently seen as Chinese dominance in the island, a senior RDA official said.