Indian firm gets another contract without tender
RITES Ltd, an Indian Government-owned engineering consultancy firm, has won without tender a contract to carry out a feasibility study for road improvement projects in Katugastota and Galagedara in the Kandy district.
A Cabinet decision published online says it is proposed to expand the road from Katugastota to Galagedara to four lanes; and to build a new four-lane sub-road in the Katugastota town. It also acknowledges what transport experts have repeatedly
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warned: that the construction of the Central Expressway will lead to much greater congestion in Kandy, something the city and its access roads are not geared for.
EXIM Bank of India has consented to provide funds, the decision states. Lakshman Kiriella, before he lost his highways portfolio to Kabir Hashim, proposed to “appoint” RITES Ltd of India to provide consultancy services to a make a comprehensive project report on the said road activities. This was approved by the Cabinet with Minister Hashim’s concurrence.
The first and second sections of the Central Expressway Project (CEP), which the Government hopes will be a flagship project, are already being built. The third section is due to start with Japanese funding. The city of Kandy and other towns in the Central Province will be connected to the expressway via an interchange at Galagedara.
No tender has been called to award the consultancy. “It’s from the Indian credit line so we are not calling tenders,” said a source from the Prime Minister’s office.
However, Indian Exim Bank rules published online facilitate the soliciting of bids provided they are from authorised Indian companies. “The lending Bank will invite Expression of Interest from Indian companies/entities and undertake a pre- qualification exercise for each project at its cost,” the operational guidelines state. “The list of pre- qualified companies/entities will be provided to the borrowing Government. Thereafter, the project will be put to bid under a competitive bidding process by the borrowing Government/ agency.”
Complete transparency and fairness in the award of the contracts by borrowing Government to Indian companies under LoC [Lines of Credit] is extremely critical, the document says. “Borrowing Governments and their nominated agencies are expected to conduct transparent and fair bidding process which should be clearly defined.”
RITES Ltd previously received open backing from the Indian High Commission in Colombo and the Exim Bank of India to secure a contract for the supply of 160 passenger coaches. When the tender was first called in 2017, Sri Lanka’s Transport Ministry granted the deal to RITES Ltd despite its prices being more than double that offered by the lowest bidder.
At the time, former Transport Secretary Nihal Somaweera told the Sunday Times the Indian High Commission's First Secretary had sent in writing that, under the Indian line of credit, the agent for engines, power sets and compartments was RITES.
Exim Bank wrote separately to the Director General of the Ministry of Finance’s External Resources Department stating that the Government must buy the coaches from RITES as it was the Indian Government’s official agent for such sales.
Only RITES and Texmaco Rail and Engineering Ltd of Kolkata had applied for the contract from a list of companies nominated by the Indian High Commission. And, after failing to secure the contract despite quoting a significantly lower price, Texmaco took its case to the Procurement Appeals Board based at the Presidential Secretariat.
The PAB instructed the Transport Ministry to call fresh tenders. “As a percentage, price quoted by the bidder [RITES] was higher by 118% than that of the lowest bidder,” it said. Expressions of Interest were then called by the Transport Ministry for the second time in one year for the purchase of the coaches.
Two companies submitted documents to the Exim Bank of India: RITES and the private sector Titagarh Wagons Ltd. But the Exim Bank notified Titagarh that it had not prequalified for bidding. This left only RITES in the running and it won the contract.