Sri Lanka road repair bids seen high, discounts low
Oct 17, 2015 12:39 PM GMT+0530 | 1 Comment(s)
ECONOMYNEXT – The lowest bids by construction firms to improve rural roads in central Sri Lanka were up to 70 percent higher than the government’s own engineers’ estimates but prices have been negotiated down by only five percent.
The nine civil works contract packages in the Central Province were approved by the Asian Development Bank which is funding the Integrated Road Investment Programme, according to the Highways Ministry.
“The lowest bid prices for each package are much higher than the corresponding engineer’s estimates,” the ministry told the Cabinet of ministers at its meeting this week.
A government committee held talks with the lowest bidders to try to reduce their prices “to acceptable levels” with the ADB’s concurrence, it said.
But none of the firms reduced their prices by more than five percent.
Sierra Construction won five of the contracts which include performance based maintenance for three years, two contracts went to Edward & Christie, and one each to CML – MTD Construction and K. D. Ebert & Sons Holdings.
Construction costs in Sri Lanka are considered high by investors and analysts because of shortages of labour and material like sand and high import tariffs on cement.
Roads in the central province are also more difficult to build and maintain because of the mountainous nature of the terrain where landslides are common during monsoons.
According to the Highways Ministry, the most expensive of the nine bids was by Sierra Construction for the NE3 project to do 65 km of roads in Nuwara Eliya district.
Sierra Construction’s bid of 2,420 million rupees for the contract was found to be 70 percent higher than the government’s engineers’ estimate, according to the Highways Ministry.
After negotiations, the bid price was reduced by five percent to 2,299 million rupees.
The least expensive bid was by Edward & Christie for the MA2 project to do 57km of roads in Matale district.
Edward & Christie’s bid of 1,249 billion rupees was 18 percent higher than the government’s engineers’ estimate but was awarded at the same price, according to the Highways Ministry.
Discounts negotiated for the other contracts varied between one and five percent.
The contracts were for rehabilitation of 222km of roads in Kandy District, 181km of roads in Nuwara Eliya District, and 195km of roads in Matale District, government spokesman Health Minister Rajitha Senaratne told a news conference.
(Colombo/October 17 2015)