• Negotiations on hold
• CANC has not met in 3 weeks

By Maheesha Mudugamuwa Section III of the Central Expressway Project (CEP) has once again come to a standstill as the local consortium, the only considered bidder for the multimillion-rupee project, has refused to proceed with the project at a time the country is facing an unprecedented economic crisis, The Sunday Morning learns. The considered bidder, a recently-formed local consortium named Lanka Infrastructure Development Consortium (LIDC), had not shown interest to the Cabinet Appointed Negotiation Committee (CANC) to proceed with the project as it has refused to take a financial risk at its last meeting held three weeks ago, it is learnt. The LIDC was formed by five leading construction companies in Sri Lanka, namely, Access Engineering Ltd., MAGA Engineering, International Construction Consortium (ICC), K.D.A. Weerasinghe & Co. Ltd., and NEM Construction Ltd. Speaking to The Sunday Morning, CEP III Project Director A. Hettiarachchi said the negotiations had now been put on hold and the CANC’s last meeting had been held three weeks ago. He said the last meeting was concluded without a decision and the local consortium would most likely withdraw from the project as they were also not interested in taking a risk at present due to the current economic situation. The 34 km-long Section III from Pothuhera to Galagedara was to be constructed by a Japanese contractor at an estimated cost of around Rs. 135 billion with a loan obtained from Tokyo Mitsubishi Bank (TMB) Japan. However, after the current Government came into power, Japan was removed from the CEP III and it was once again shifted into a competitive bidding process by calling tenders for the construction. The project was recently mired in controversy as there was a conflict between two bidders, the local consortium which was considered as the only bidder of the project and the refused bid submitted by Metallurgical Corporation of China (MCC), with allegations that arrangements were made to award the project to the LIDC at $ 822 million higher than its competing bid. The Sunday Morning earlier reported on the concerns raised about the Build Operate Transfer (BOT) process which was used for the project, funding options, and the extraordinary parity in the cost estimations by the bidders.  Opposition members of Parliament raised objections over the CEP III procurement process, questioning why the Government was prioritising a major infrastructure project during an economic crisis. The offer from LIDC to build the CEP III is priced at $ 1.87 billion, which is significantly higher than the offer made by China’s MCC at $ 1.05 billion. Nevertheless, the LIDC alleged that the tenders submitted by MCC International Incorporation (MCCI) and China State Construction Engineering Corporation (CSCEC) did not qualify due to technical errors during the opening of the tenders on 3 February 2022, as both companies had failed to follow the Government-approved procurement process. As alleged by them, the MCCI had failed to submit a bid security in the proper way as well as the lender’s commitment, which had not addressed the bidder MCCI but instead had been given to the MCC.      Section III of the Central Expressway Project (CEP) has once again come to a standstill as the local consortium, the only considered bidder for the multimillion-rupee project, has refused to proceed with the project at a time the country is facing an unprecedented economic crisis, The Sunday Morning learns. The considered bidder, a recently-formed local consortium named Lanka Infrastructure Development Consortium (LIDC), had not shown interest to the Cabinet Appointed Negotiation Committee (CANC) to proceed with the project as it has refused to take a financial risk at its last meeting held three weeks ago, it is learnt. The LIDC was formed by five leading construction companies in Sri Lanka, namely, Access Engineering Ltd., MAGA Engineering, International Construction Consortium (ICC), K.D.A. Weerasinghe & Co. Ltd., and NEM Construction Ltd. Speaking to The Sunday Morning, CEP III Project Director A. Hettiarachchi said the negotiations had now been put on hold and the CANC’s last meeting had been held three weeks ago. He said the last meeting was concluded without a decision and the local consortium would most likely withdraw from the project as they were also not interested in taking a risk at present due to the current economic situation. The 34 km-long Section III from Pothuhera to Galagedara was to be constructed by a Japanese contractor at an estimated cost of around Rs. 135 billion with a loan obtained from Tokyo Mitsubishi Bank (TMB) Japan. However, after the current Government came into power, Japan was removed from the CEP III and it was once again shifted into a competitive bidding process by calling tenders for the construction. The project was recently mired in controversy as there was a conflict between two bidders, the local consortium which was considered as the only bidder of the project and the refused bid submitted by Metallurgical Corporation of China (MCC), with allegations that arrangements were made to award the project to the LIDC at $ 822 million higher than its competing bid. The Sunday Morning earlier reported on the concerns raised about the Build Operate Transfer (BOT) process which was used for the project, funding options, and the extraordinary parity in the cost estimations by the bidders.  Opposition members of Parliament raised objections over the CEP III procurement process, questioning why the Government was prioritising a major infrastructure project during an economic crisis. The offer from LIDC to build the CEP III is priced at $ 1.87 billion, which is significantly higher than the offer made by China’s MCC at $ 1.05 billion. Nevertheless, the LIDC alleged that the tenders submitted by MCC International Incorporation (MCCI) and China State Construction Engineering Corporation (CSCEC) did not qualify due to technical errors during the opening of the tenders on 3 February 2022, as both companies had failed to follow the Government-approved procurement process. As alleged by them, the MCCI had failed to submit a bid security in the proper way as well as the lender’s commitment, which had not addressed the bidder MCCI but instead had been given to the MCC.