v wins Central highway bid saving Rs 1196 mn

In a dramatic development for the tender for the Central Expressway project (CEP) which closed yesterday Sri Lanka was able to make a saving of Rs.1196 million due to the new competition introduced by the Japanese Embassy to the project.

Fujita Corporation, a fully owned subsidiary of Daiwa House Group of Japan has now won the bid.

CEP is funded by the Japanese Government and the Japanese Embassy of Sri Lanka shortlisted and nominated three strong Japanese companies five months ago and requested the Road Development Authority (RDA) to select the best company which is commercially most competitive.

The companies were Taisei Corporation, Penta Ocean Construction Co. Ltd and Wakachiku Construction Co. Ltd.

Despite these three companies being nominated, they failed to present their bids on time and the selection process got prolonged and more than four extensions were offered.

Finally RDA refused to extend the deadline and only Taisei Corporation submitted its bid and that too without a bid bond. However Taisei’s bid took the nation by shock due to a massive Rs.159 billion being the quoted price for the 32.5 km stretch.

There was severe criticism both locally and internationally about the said tender and questions were raised about the absence of the bid bond as well as the unrealistic price quote which was against all standard norms.

The Japanese Embassy and the Sri Lankan Prime Minister’s office then intervened and cancelled this tender.

This offered an opening to Fujita Corporation, a fully owned subsidiary of Daiwa House Group of Japan. Fujita is a US$ 32 Billion company and is considered to be the largest construction company of Japan and major international exposure with a US$ 720 million highway project in Iraq as well as a US$ 800 million Hong Kong Airport project which was recently concluded.

The introduction of Fujita resulted in them quoting a Rs. 147 billion for the contract offering a major saving for Sri Lanka.

Fujita’s bid is supported by their Indian office and many local construction companies.

Financial experts have pointed out that a massive financial loss to the country has been corrected at the right time by the timely action of the Japanese Embassy and the Ministry of Highways supported by the Prime Minister’s office. Local construction companies mentioned that this is a very good example of how Sri Lanka can gain and save huge amounts of money by introducing healthy competition into large scale procurement processes.

However, everyone is now closely watching the post tender developments including contract award since this is when irregularities take place due to the massive contract value in question.

(SS)