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“Opened” Lotus Tower still closed to public; TRC and military to run it
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Started with a bang: Colourful firecrackers light up the night sky at the opening of the Lotus Tower in September. Pic by Amila Gamage
The Lotus Tower, which was ceremoniously “opened” in September this year, remains barred to the public with the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) now planning to run it with the use of the military.
The deployment of army, navy and military will be a temporary measure, said P R S P Jayatilake, TRCSL Chairman. He also said the date on which the Lotus Tower will finally be accessible to the public is “not yet decided”. The TRC now falls under purview of the Defence Ministry.
While Cabinet approval was granted in September to create a new State-owned enterprise to commercialise the Lotus Tower and handle its financial operations, this company has still not be formed. The proposal is with the Finance Ministry which must now nominate the directors, Mr Jayatilake said.
Matters surrounding the Lotus Tower have been repeatedly highlighted by the National Audit Office (NAO), including its 2018 annual report released this week. The contract to build the structure was awarded to two Chinese companies. The TRCSL signed the agreement in January 2012–nearly eight years ago.
The cost of the project was then valued at US$ 104,300,000 (Rs 18.8bn at prevailing rates). It was due to have been completed in 912 days from November 2012 to May 2015.
The Auditor General has repeatedly highlighted how neither a project report nor a proper feasibility study was prepared. There was only a financial feasibility study which had shortcomings. When the contract period of was over, an extension was granted till October 2017 but construction was not completed even by May 31, this year.
Because of construction delays, the full contractual loan could not be obtained. The Export Import Bank of China (EXIM) only granted US$ 67,259,754. But as the total loan amount had been used in the computation of agreed charges from the start of the project, a fee of US$ 636,508 or RS 91.88mn was overpaid.
Sri Lanka also had to pay additional charges of US$ 322,984 or Rs 49.61 million as penalties for not utilising the loan (due to not being able to obtain it) between August 19, 2016, and October 27, 2017.
Cabinet approval was not taken for a payment of Rs 198.69mn as consultancy fees to the University of Moratuwa, the Auditor General’s annual report says. And despite having completed only half the project by December 31, 2015, seventy-five percent of consultancy fees or Rs 150 million was paid beyond the planned limits of the agreement.