An analysis carried out by Verite Research
points out the issues of granting tenders to Chinese Companies without competitive tendering .
The Gampaha, Attanagalla, and Minuwangoda Water Supply Project was granted to China Machinery Engineering Corporation on an unsolicited proposal.
This company had little experience in water projects, but they were able to get the project because they had financial capability.
The l competitive bidding process was not followed and there was a deviation from the standard process.
The feasibility study and environmental impact assessments were carried out after the contract had been signed.
The government deviated from the standard process in anticipation that it would get a concessional loan from the China EXIM Bank, which it failed to get and the contract price was 33.4% higher than the cost estimate of $ 172 million.
However, three years after signing the contract, a concessional loan, less than requested, was granted by the China Development Bank. Delays in securing funding with investigations into alleged malpractices delayed project completion by more than seven years.
The Auditor General’s Department frequently reported on financial and other irregularities related to the project, but no action had been taken.