Dec 13, 2016

Govt. probes Chinese deal of Gin-Nilwala river diversion

Sri Lanka government is to begin an investigation into a US$700 million Gin-Nilwala river diversion deal that had been finalised with China CAMC Engineering Co. Ltd weeks before the fall of the previous regime in 2015.

The project has not been implemented as the activities of the loan agreement with China EXIM Bank have not been finalized, A cabinet Memorandum submitted by Finance Minister Ravi Karunanayake revealed.

But according Finance Ministry documents, the Chinese company had been awarded a tender by passing government procurement guidelines as an unsolicited bid.
An advance payment amounting Rs.3012 million had been paid for this irrigation project that was to benefit the Hambantota and Matara districts weeks before the January eighth, 2015 presidential election.
Although Rs.3012 million had been paid to China CAMC Engineering Co. Ltd before the 2015 presidential election, the contractors failed to implement any work even by the end of May 2015.
However, environmentalists warned that the project as proposed in the Feasibility Study possessed a formidable threat to the Sinharaja World Heritage Site which is the only ‘remaining relatively undisturbed’ patch of ‘tropical humid evergreen forest.
They urged the authorities to appoint an impartial and independent technical committee of experts to study and give an opinion on the impacts of the project on Sinharaja and Diyadawa forest reserves.
The government will appoint a ministerial subcommittee to find out as to whether the contract agreement can be implemented without any additional cost to the government*

It will assess the negative impact and costs if one party wants to terminate the agreement, unilaterally and find out as to whether those officials involved have violated any financial regulations, government procedures and circular instructions.

The committee will investigate as to how to recover the advance payment without any adverse implications.