Audit exposes tender flaws, funds wastage over reservoir project

COLOMBO (News1st): The previous government had illegally awarded a Chinese company with a tender for a reservoir project in Monaragala, for which millions of rupees have gone to waste, a state audit has shown.   In 2017, the contract for the Kumbukkan Oya Reservoir Project -- that is yet to commence -- was awarded to China National Heavy Machinery Corporation by the irrigation ministry under the Swiss Challenge bidding method.   Existing laws show that a private company can be awarded a contract under the Swiss Challenge method, only if it initiates a proposal for a project.   However, the national audit office found that the tender had been awarded illegally, as the project was first proposed by the irrigation department in 2011, and not by the Chinese company.   "...it was observed that there was no transparency in the selection of the respective contractor and the proper procedures had not been followed," the audit report, seen by News 1st, read.   The tender had been awarded by "ignoring" three companies that had submitted tenders for the project in 2016 after the ministry had advertised for bids that year.   The Rs 32.3 billion worth project aimed at constructing a reservoir with a capacity of 48 million cubic meters, reconstructing the Thenagallanda and Iththekaduwa tanks, and the Kumbukkan Oya Anicut.   "Nearly an expense of Rs 108 million had been incurred unproductively and improperly by 30 November 2019," the report stressed adding that the project is yet to begin.   This is despite spending more than Rs 21 million for the inaugural ceremony of the project on January 28, 2017.   Meanwhile, the irrigation department has spent more than Rs 2.5 million on the contractors, and two private companies that have not yet submitted four evaluation reports required to commence the project.   This included the Feasibility Study, Environmental Impact Assessment Report, Social Assessment Report and Resettlement Action Plan.   The audit report has exposed that Rs 86 million had been spent to carry out downstream development activities on the project before the evaluation reports had been approved.   It added that nearly Rs 9 million had been spent to construct a circuit bungalow and auditorium of the Regional Irrigation Engineer's office, and Rs 673,705 to refurbish the old circuit bungalow.   "...an unidentified expenditure of Rs 10,253,131 had been incurred ... as per the Appropriation Accounts of the year 2016," the report published by the national audit office read.   It added that the reconstruction of two tanks and an anicut under the project at a cost of more than Rs 103 million had also not been carried out properly.   However, more than Rs 100,000 had been paid for the coordinating officer of the project.   The irrigation ministry's website showed that the project that is expected to benefit at least 6000 families dependent on farming, has been suspended due to objection by a small group of people.