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Tuesday May 30th, 2023

Sri Lanka Access Engineering explains runway deal

COLOMBO (EconomyNext) – Sri Lanka’s Access Engineering has explained that a runway repair contract cancelled by the new government was awarded to it by the former regime after local contractors were encouraged to bid to acquire expertise despite not having experience.

The company said in a stock exchange filing that five local contractors invited to bid for the deal had explained they do not have the required experience and would not meet the required pre-qualification to carry out the work.

"The local contractors were informed that they could collaborate with foreign contractors to meet with the relevant pre-qualification and experience criteria and was invited to submit their proposals,” it said.

The government this week said it had cancelled the 85.77 million US dollar contract to repair the runway at the international airport at Katunayake the former Rajapaksa regime awarded to Access Enginering.

This was because no competitive tender procedure had been followed in the award of the contract and Access Engineering lacked experience for the runway work, Ports and Aviation Minister Ranatunga told the Cabinet of ministers.

The Access statement said two bids were received from two international contractors, Lagan Construction Ltd. of Northern Ireland and China Harbour Engineering Company Ltd. of China in May 2013.

Five local contractors were called to attended a meeting called by the Secretary, Ministry of Finance on 11th and 13th December 2013: Nawaloka Construction Company, Maga Engineering (Pvt) Ltd., Tudawe Brothers Ltd., Sierra Construction (Pvt) Ltd., Access Engineering.

“The contractors present were informed that the government has decided to use local bank finance to carry out work with respect to the project and the tender called in January 2013 for carrying of the project where finance was from overseas, would not be pursued.”

The local contractors were told that if they were unable to form a suitable consortium and submit a proposal, the government would be compelled to proceed with the international contractor selected through the tender.

AEL said it submitted its preliminary proposal on 28 January 2014 together with the Louise Berger Group of USA, Katahira & Engineers International and World Kaihatzu Kogyo Company of Japan.

Thereafter, having ascertained the exact scope of work and parameters of the project, and  site visits, in consultation with Airport and Aviation Services of Sri Lanka, AEL submitted its detailed proposal incorporating the changes and new requirements of AASL on 24th April 2014.

After further discussions with the Cabinet Appointed Negotiation Committee and the Procurement Committee, AEL submitted the final revised proposal on 18th August 2014,

After further negotiations, ending on 31st October 2014, AEL said it agreed to the contract at US$ 85.77 million and AASL awarded the contract to AEL on 10th December 2014.


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Sri Lanka President gets cabinet nod to discuss cancelled LRT with Japan

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers approved a proposal by President Ranil Wickremesinghe discuss resuming a Japan funded. Light Rail Transit (LRT) project cabinet spokesman said, as the island nation is in the process of mending ties with Tokyo.

However, any such deals are likely to take place after the debt restructuring and Sri Lanka starts to repay its foreign loans to come out of default, analysts say.

Former President Gotabaya Rajapaksa unilaterally cancelled the 1.5 billion US dollar LRT and East Container Terminal (ECT) projects in 2021. Japan agreed to fund the LRT project while it was one of the tripartite members of the ECT project along with India and Sri Lanka.

The abrupt cancellation hit the diplomatic ties between the two countries and Sri Lankan government officials have said Japan had given the project to Sri Lanka at a very lower financing cost.

President Wickremesinghe returned from Japan late last week after having met top officials of the Japanese government including its prime minister.

“In recent history, due to the stopping of several agreements and proposals suddenly, President Wickremesinghe went to Japan after creating the background to clear some of the worries we have,” Cabinet Spokesman Bandula Gunawardena told the weekly media briefing.

“Before he went, he got the approval from the cabinet to resume the discussion on the light railway project. He got the approval from the cabinet to get parliament approval for bilateral agreements signed or any other investments project. Any change or cancellation of a project could be done only with the approval of the parliament.”

Japan has backed Sri Lanka under Wickremesinghe’s presidency after the island nation declared sovereign debt default. (Colombo/May 30/2023)

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Sri Lanka to tighten grip on television with broadcast law

ECONOMYNEXT – Sri Lanka has formulated a broadcast authority law to regulate electronic media which will be made public soon, Cabinet spokesman Minister Bandula Gunawardana said.

“The draft prepared by a cabinet subcommittee under Justice Minister Wijedasa Rajapaksa has discussed with various parties will be given to all media institutions and broadcast media,” Gunawardana said.

“We do not have to hide or force anyone. A legal framework that can be acceptable to all for all sectors.”

“In a week or two Minister Wijedasa will discuss with state and private stakeholders.”

At the moment Sri Lanka has issued frequencies without conforming to an “international procedures”, he said.

In Sri Lanka television frequencies are issued under a state television act.

Successive administrations in Sri Lanka has since around 1980 mis-used state television duopoly which including for conducting elections according to critics.

Private television as well a raio emerged around the 1990s and has since over shadowed state media.

There have been calls by ruling party politicians from time to time to control private media. There is now calls to control social media.

At a Committee on Public Accounts meeting of the Department of Government Information, ruling coalition legislators called for regulation of television content. (Colombo/May30/2023)

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Sri Lanka rupee at 296.75/297.25 to dollar at open, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee opened at 297 /297.50 against the US dollar in the spot market on Monday, while bond yields were steady, dealers said.

The rupee closed at 296.75 /297.25 to the US dollar on Monday after opening around 296.50 /297.50 rupees.

A bond maturing on 01.09.2027 was quoted at 26.50/75 percent steady from Friday’s close at 26.50/65 percent.

Sri Lanka’s rupee is appreciating amid negative private credit which has reduced outflows after the central bank hiked rates and stopped printing money. (Colombo/ May 29/2023)

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