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Rs. 85 billion tunnel project: Irrigation Ministry responds to ST story – Right of reply
View(s):The Ministry of Irrigation has sent the following response to the news item headlined; ‘Controversy looms over ADB-funded Rs. 85 billion tunnel project’ in the Sunday Times last week (October 17).
The ministry states:
The 96.5km-long ‘North Central Main Canal Project’ is the largest eco-friendly irrigation development project currently being implemented by the Government with a ten-year MFF {multitranche financing facility} special loan from the Asian Development Bank (ADB).
One of the major sub-projects under this project is the 27.7km underground tunnel from Konduruwawa to Mahamigaswewa in Habarana.
Under the international competitive bidding process for the completion of this part, the lowest bidder – who fulfilled all the technical and financial qualifications from among the construction companies which had submitted bids in 2018 – was to be awarded the construction, to be done within six years.
However, due to the problems associated with the Uma Oya tunnel, the approval of the Cabinet of Ministers was received to award the contract – after the recommendations of the expert committees appointed to re-examine the construction methods of this project and the ‘Gunaruwan Expert Committee’ appointed to review the country’s leading development projects – as soon as the new government was elected. The construction commenced in March 2021.
Despite a two-year delay, the government encounters the challenge of completing the project by 2025 and distributing water from the Moragahakandaand Kalu Gangareservoirs to the North Central and Northern Provinces.
According to a request made to the Plan and Design Engineering Consultancy of this project to submit the technical solutions required to reduce the originally planned construction period of six years to four years, they have submitted as most practical and technically optimal solution (by reviewing the relevant engineering plans during the last six months) – to use two tunnel boring machines simultaneously on both sides of the tunnel. Originally, one tunnel boring machine was proposed for the project.
Accordingly, the contractor approved by the Cabinet of Ministers who submitted a price lessening of US$ 63.57 million than the engineering estimate in the submission of bids in 2019, has requested the cost of purchasing the additional machine, from the government.
The price revisions required to procure the proposed additional machine outside the original estimate in accordance with the ADB guidelines and also through a review of the prices of the relevant tunnel boring machine manufacturers were analysed through the procurement committees appointed by the Cabinet of Ministers and a technical evaluation.
Due to the reciprocal recommendation of the members of the technical committee appointed initially with a representation of the Treasury, a special technical committee consisting of irrigation sector experts was re-appointed along with the Treasury representation and have given their recommendations as follows:
(i) Non-consensus recommendations of the original technical committee
(ii) Technical proposal of the Plan and Design Consultancy Institute
(iii) Capital funding issues that may arise if this section fails to be completed within the time frame
(iv) Completion of the remaining 67km of the canal project as planned by the year 2024
(v) Additional international consultancy fees incurred due to two years delay in addition to this section only
(vi) Additional costs incurred to maintain project offices for two extra years
(vii) Prompt supply of water to the North Central dry zone which is already affected by climate change.
(viii) Growth in the national food production due to the provision of irrigation water facilities prior to two years
The Cabinet Appointed Procurement Committee then summoned the members of both the relevant Technical Committees and the proposed price revision for this construction was done. It has made recommendations that the project be completed within the loan concession period of the ADB, noting that the proposed tunnel could be completed within a lower cost framework than the original engineering estimate.
The decision of the above Procurement Committee in accordance with the International Procurement Procedures to be followed for World Bank and ADB Loan Assistance is subject to the approval of the Cabinet as well as the approval of the ADB.
Policy decisions taken by the Cabinet of Ministers considering the above and the concurrence of the ADB for the above resolution will implement the policy decision of the Ministry of Irrigation.
ST News Desk states:
The main issue raised by the Sunday Times report is that the Irrigation Ministry Secretary has not followed laid down protocol, but arbitrarily appointed Special Technical Evaluation Committees (STECs) on his own. This has not been answered in the explanation by the ministry.
In fact, the ministry secretary has violated this protocol bypassing the duly-appointed Technical Evaluation Committee (TEC) whose recommendations were unanimous. He has, in fact, appointed two Special TECs in violation of the National Procurement Agency (NPA) Guidelines.
The NPA’s Procurement Manual (to be used with the Procurement Guidelines 2006 Goods & Works), available on the website of the Department of Public Finance, states on Pg. 22 under the heading ‘TEC Assisting Cabinet Appointed Procurement Committees (CAPC)’: “Granting due consideration to the recommendations made by the Secretary to the Line Ministry, the NPA shall appoint the TEC to assist CAPC to handle high value Procurement actions ………..”
Another glaring issue that comes to the fore in the ministry explanation is how the Cabinet Appointed Procurement Committee (CAPC) summoned several TECs including the TECs appointed in violation of the NPA Guidelines and whether this meeting was in order.
A question that arises with regard to the project is whether the whole plan was flawed from the beginning. A simple rationale is why the Upper Elahera Canal Project was not tailored for four years, before calling for tenders, saving money as well as time and energy. It may be important to re-visit that process to find out whose responsibility this was.
It is crucial to determine whether it is feasible for Sri Lanka to buy another tunnel boring machine (at around US$ 6 million or Rs. 1,200 million). Boring the tunnel from both sides would be futile, if the other work connected to the two canals – that join-up with the tunnel on either side – is not completed. Then the ‘acceleration’ of the work may not happen.
The Sunday Times understands that the work linked to the two canals has not been fully started yet, with land acquisition processes not even occurring yet in some areas.