Nov 25, 2016

SL to save Rs.12 b in Central Expressway project

Sri Lanka is to make a massive saving of Rs.12 billion in the 3rd Phase of the Central Expressway project following a fresh bid offer from Japanese Company.

Fujita Corporation, a fully owned subsidiary of Daiwa House Group of Japan, has stepped into offer a lowest bid for the long delayed construction contract and the fresh tender procedure was completed this week.

The third phase construction of 32.5 km stretch of road from Kurunegala, Pothuhara to Galagedara is funded by the Japanese government.

The Japanese Embassy of Sri Lanka short listed and nominated three leading Japanese Companies five months ago and requested the Road Development Authority to select the best company which is commercially most competitive.

These companies are Taisei Corporation, Penta Ocean Construction Co.Ltd & Wakachiku Construction Co.Ltd.

Despite the three companies being nominated, the companies failed to present their bids on time and the selection process dragged on to a long period indefinitely with more then four extensions were made for the tender closing date .

Finally when Road Development Authority has refused to extend the deadline, only Taisei Corporation submitted its bid and that too was without a bid bond.

However Taisei's bid was a massive Rs.159 Billion for the 32.5 km stretch of road.

The Japanese Embassy and Sri Lankan Prime Minister's office then intervened and cancelled the award of contract to Taisei Corporation, and recall the tender introducing greater competition.

Fujita Corporation a US$ 32 billion company a fully owned subsidiary of Daiwa House Group of Japan has stepped in to offer a bid quoting Rs.147 Billion for the contract making a major saving for Sri Lanka.

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

Fujita is one of the largest construction companies 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.

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.