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Galle Port development: Concerns over multi-million rupee consultation fee

03 Jul 2022

 
  • SLPA to issue RFPs soon
  • Consultation fee will not go to waste: Abeysiriwardana
    By Maheesha Mudugamuwa Concerns have been raised over the spending of Rs. 400 million as consultation fee by the Sri Lanka Ports Authority (SLPA) for the development of the Galle Port as a mixed development project many years ago, which has failed to commence actual construction yet, according to the National Audit Office (NAO).   The cost of the project as estimated earlier was around $ 107.2 million, but as per the recent estimate made by the SLPA, the port development – which includes leisure parks, apartments, hotels, ship repair facilities, marinas, shopping malls, and other recreation facilities – is said to be around $ 175 million.   As revealed by the NAO, although Sri Lanka and the Japan Bank for International Cooperation (JBIC) had agreed to enter into a loan agreement on 28 March 2006 for the construction of a multipurpose terminal at the Galle Harbour to develop the Southern Province, UNESCO approval had to be obtained for construction in the vicinity of Galle Fort, as it is a World Heritage site.  Since it had taken more than three years to do so, it was decided to suspend the project as the lender has not extended the loan period. Accordingly, the consultation fee of Rs. 418 million incurred for this has been an uneconomic expense, the audit report stated.   Furthermore, it was revealed that an agreement had been made to provide Yen 14,495 million to Sri Lanka under the SLP-85 loan agreement entered between Sri Lanka and the JBIC in 2006 for the construction of a breakwater and a multipurpose terminal at the Galle Harbour for the purpose of developing the southern areas.  On the request of the Government of Sri Lanka in March 2016, this loan agreement was extended by the JBIC until July 2017. The SLPA, in collaboration with the Ministry of National Heritage, has requested UNESCO approval for this project and obtained conditional approval in 2016. Nevertheless, the Government decided to suspend the project in 2017 as only the breakwater could be constructed under the JBIC loan. Although the project is currently operational, it will not bring the expected benefits to the country, as per the audit report.   The project was relaunched as a mixed development project by the SLPA this year. As per the latest update from the SLPA, three foreign investors had shown interest in the SLPA Galle Port mixed development project, The Sunday Morning learns. SLPA Additional Managing Director (Technical) Susantha Abeysiriwardana said the project would utilise the project designs, initial investigations, and other relevant documents prepared by the previous consultant and therefore the money spent as consultation fee would not go to waste. “We will utilise all the plans and documents prepared by them and therefore the money will not be a waste. The only issue is that we still can’t get that into the books as we have not yet commenced any physical activity,” he told The Sunday Morning. The SLPA has concluded the EOIs and is preparing to call for Requests for Proposals (RFPs) from the relevant investor, Abeysiriwardana added.    


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