• 38 projects delayed by up to 2,158 days
• Rs. 1.7 m wasted on unused tanks, Rs. 599 m mismanaged, Rs. 267 m added due to scope changes
• Rs. 551 m in contributions missed
• Rs. 19 m paid to subcontractors against contract terms
• Auditors call for stricter oversight and investigation

The Government has incurred a massive loss of approximately Rs. 1.44 billion due to delays, inefficiencies, and mismanagement in several major water supply and sanitation projects, the latest available audit report on the Water Supply and Sanitation Improvement Project reveals.

The audit, which reviewed the status of multiple ongoing and completed projects, highlighted that the implementation of 38 urban and rural water supply schemes; rehabilitation projects; and public, indigenous, and school sanitation projects had faced significant delays, with time extensions granted up to seven times. 

The delays, ranging from 330 to 2,158 days, have raised concerns despite several measures being introduced by the Government to support contractors in the construction industry.

The project, executed by the Ministry of Water Supply and Estate Infrastructure Development, aims to enhance access to piped water services and improve sanitation in selected districts, while strengthening the capacity of relevant institutions. 

It is divided into four components: rehabilitation and expansion of water supply and sanitation schemes, capacity building of the Department of National Community Water Supply, sector training and water quality mapping, and project management.

The total estimated cost of the project is $ 183.90 million (Rs. 27,590 million), with $ 165 million (Rs. 24,750 million) funded by the International Development Association, and the remaining Rs. 2,840 million covered by the Government of Sri Lanka and community contributions. 

The project started on 7 December 2015 and was initially scheduled for completion by 31 December 2020, but the deadline had been extended to 31 December 2023.

As per the report, one of the major areas of concern is the Kotiyakumbura sand filter tank, where an investment of Rs. 1.7 million has been deemed uneconomical due to the non-usage of the tanks. 

Similarly, the Kilinochchi Water Supply Project saw Rs. 599 million spent on improper project subdivision, which violated Government procurement guidelines and caused delays in the project timeline. 

In the Mulankavil Water Supply Project, Rs. 267 million had been added to the cost due to extra work orders and changes in the project scope. 

Furthermore, the failure to collect Rs. 551 million in community contributions for rural water supply projects has led to a significant shortfall in funding. 

Another alarming finding was that Rs. 19 million had been paid directly to subcontractors for Kilinochchi District projects, contrary to the conditions laid out in the contracts.

The total financial impact of these issues amounts to Rs. 1,437.7 million (approximately Rs. 1.44 billion).

The National Audit Office (NAO) in the audit report has urged the Government to take immediate action to address the root causes of these delays and inefficiencies. It also calls for a thorough investigation into the management of these projects and the enforcement of stricter procurement and financial oversight to prevent further losses.

The delays have been attributed to several factors, including improper planning of project durations, poor performance by multiple contractors, environmental and resettlement issues, and unforeseen challenges such as the Covid-19 pandemic and the ongoing economic crisis. 

These factors have combined to severely hinder the progress of these vital projects, which were originally expected to be completed within a set timeframe.

Despite these setbacks, when contacted, a senior official attached to the ministry who wished to remain anonymous told The Sunday Morning that almost all sub-projects had now been substantially completed.

According to the project management, the projects had been progressing well initially, but the unforeseen challenges had led to the delays which could not be entirely avoided and to support contractors in overcoming these difficulties, the Water Supply and Sanitation Sector Improvement Project (WaSSIP) had been compelled to accommodate time extensions where necessary.