Financial Times

Bureaucratic bungling stalls IRD building reconstruction

Construction Ministry Secretary also a director of a private construction company
By Bandula Sirimanna

Construction work on the Inland Revenue Department (IRD) building which was severely damaged in the abortive LTTE air attack on February 20 has been hampered owing to bureaucratic bungling and serious conflict of interest issues involving the Secretary to the Ministry of Construction and Engineering Services and some other Ministry officials, informed sources said.

The minister’s directive which was ignored by the secretary.

The estimated cost for reconstruction is Rs.1.04 billion and the work should be completed by the State Engineering Corporation (SEC) within six months (by December 2009) under the cabinet directive.

When contacted by Sunday Times FT to ascertain the facts about the awarding of tenders, the undue delay and the allegation of conflict of interest of senior officials, Minister Dr. Rajitha Senaratne said that he has issued a directive to the Ministry Secetary, Nissanka Wijeratne to adhere to Section 3.8 of the National Procurement Guidelines as the damage to the building has been caused by a terrorist attack.

This was the suggestion made by Treasury Director-General, Public Finance Wasantha Ekanayake as well. He said that he has directed that the Ministry Procurement Committee should handle contracts with a value of less than Rs.250 million and other contracts less than Rs. 100 million should be handled by the SEC who was responsible in winning the reconstruction contract of the IRD. Dr Senaratne also instructed the Secretary to appoint the SEC Chief Executive Officer as chairman of the procurement committee but this was not adhered to by Mr Wijeratne for reasons unknown to the Minister.

Responding to the conflict of interest allegation against Mr Wjieratne, the Minister said that if he is holding a post of director in a private construction company then it is definitely a conflict of interest in this issue. The Sunday Times FT has documentary evidence to prove that Mr Wijeratne is a director of Link (Engineering) Ltd which is one of the bidders of the tender for the supply, fabricate and installation of aluminum doors and windows of the IRD building contract.

Rejecting these allegations, Mr. Wijeratne told the newspaper that he has followed procurement guidelines 2006 issued under the authority of the president in appointing procurement committees of the ministry and the department as the chief accounting officer of the ministry. But he said he has no involvement in these committees.

He categorically stated that he is only a shareholding director of Link (Engineering) Ltd and no one can level allegations of conflict of interest against him. He added that he appointed the most senior person, Lakmini Nonis at the SEC as the chairman of the department procurement committee and Ministry Additional Secretary U.W. Rodrigo as the chairman of the Ministry procurement committee as the SEC CEO is a contract officer and overage.

He said that Link (Engineering) has all the rights to bid for a government tender as he has no hand in awarding these tenders. Referring to the ministers comment’s he said that somebody has completely misled the minister.

The emergency procurement procedure adopted by the ministry on the directions of the the Secretary overlooking the directive of his Minister has caused undue delays in awarding tenders and procuring materials for reconstruction work, the sources said.

In a Memorandum to the chairman of the procurement committee and copied to the Minister, Mr Rodrigo and SEC General Manager, Tudor Wijenayake, SEC Chairman B.V.S.K de Silva noted that evaluation and award of tenders should be done within a period of fiv days after the closing of tenders, as any delay would seriously affect the handing over of the project for which SEC is liable to a payment of Rs. 500,000 to the IRD a day as damages.

He pointed out that the tender for the supply, fabricate and installation of aluminum doors and windows worth around Rs. 25 million has still not been awarded even after three weeks of closing the bids. Unless the windows are completed the SEC was not in a position to carry out any interior work of the building. He stated that he considers this delay to be either sabotage or incompetence.

Several contractors accused the Ministry Secretary of manipulating tender procedure and preparing tender documents to suit the needs of some contractors with links to Link (Engineering). They alleged that the tender documents for the installation of air conditioning system at the IRD building had been prepared to enable only three companies which have links to ministry officials to bid for it.

Meanwhile Mr Wijeratne will leave for Libya on September 23 on an official tour to explore building construction opportunities for Sri Lankans.

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