Sri Lanka has over Rs 300bn unpaid road develpment bills: “We are in a major mess”: Kabir Hashim

Apr 02, 2015 (LBO) – Sri Lanka’s Minister of Highways and Investment Promotion says, the government has over 300 billion rupees of bills to be paid for unsolicited proposals and contracts without agreements for roads building.

“That’s a colossal amount,” Kabir Hashim, Minister of Investment Promotion and Highways told reporters at a press conference held today at Board of Investment Colombo.
“Our debt is over 300 billion rupees and most of these are unsolicited proposals without proper bidding and approvals,”

“That is why funding is a big issue for government,”

“They have gone to town to develop roads without any processes been followed.”

However the new government said that they will not suspend or stop any road development projects but will re-look at every project before paying.
But the road development projects with agreements would be paid even though it cost more for the government, the minister said.

“We are trying to go through everything,” Hashim said.

“But if there is commitment by our government, we need to protect that commitment, so we are trying our best to do damage control through negotiating to reduce and change scope of work,”

“We are not going to cancel those but if there are projects which are not feasible and no commitments, we will re -look at it and decide,”

“But all development projects will go ahead with massive cut downs of costs.”

He said, “We are in a major mess.”

According to Hashim, some road development project contracts have been given by the last regime for the people who favored them, paying a higher amount of money than its actual amount, even though there have been a cabinet appointed tender board to overlook the bids of road development projects.

“We are dealing with people’s money,”

“There are financial regulations that have to be followed, so even though some people want to work with us using the old system, we won’t let that happen.”

“There was no proper bidding system used by the last regime,”

“Unsolicited proposals were given for the road development contracts,”

“The tender board was there to give them the approval by renegotiating the deal and get 5- 10 percent discount, without following a proper bidding system.”

The estimated cost of a two lane road in 2005 about 47 million rupees.

But the cost increased to 75 million rupees by 2010.

Pulling out data, Hashim said the gross expenditure to build a kilometer of road increased by 55 percent to 75 million rupees in 2014, due to unsolicited proposals and contracts given without a proper bidding system.

(Detailed story to follow)