Rajapaksha regime replies to Kabir Hashim's allegations

 

Sunday, 05 April 2015

Minister Kabir Hashim has made certain allegations about several infrastructure projects initiated by the previous government. The minister revealed that the cost of the consultancy services alone for the Matara-Hambantota highway was Rs 124 million per km.

By responding to the allegation, Rohan Welivita, media coordinating secretary to former President Mahinda Rajapaksa says the fee for the consultancy service was in general range.

He explains 'After evaluation by a Cabinet Appointed Consultancy Procurement Committee and subsequent cabinet approval, the consultancy contract for the Matara-Hambantota highway was awarded to a foreign firm at a fee of Rs 11billion. The total construction cost of the highway was Rs 242 billion. Accordingly, the consultancy fee is around 4.5% of the project cost. The consultancy fee for building contracts is usually around 4-8% of the project cost'

The response of former media coordinating secretary as follows.
Clarification regarding the allegations made by Minister Kabir Hashim

At a press conference held last Thursday 2 April 2015, Minister Kabir Hashim made certain allegations about several infrastructure projects initiated by President Mahinda Rajapaksa’s government. Minister Hashim said that the average cost for a two lane highway in 2010 was Rs. 75 million per kilometre but that the per kilometre cost of the Lunugamwehera-Kataragama road had been Rs. 259 million, the Kalugama-Vilkatupotha Road Rs. 100 million, the Kegalle By Pass road Rs. 722 million, and the Jaffna-Punalai-Pt Pedro road Rs. 318 million. The minister also said that the cost of the consultancy services alone for the Matara-Hambantota highway was Rs. 124 million per km and that a contractor who undertook the construction of the Kalugama-Vilkatupotha road for Rs. 2,100 million had sub-contracted it out for Rs. 1,600 million thus making an undue profit of Rs. 500 million.

Minister Hashim characterised the above mentioned instances as evidence of large scale corruption. At the same press conference, minister Eran Wickremeratne said that former president Mahinda Rajapaksa is directly responsible for these purported irregularities. We wish to respond to these allegations one by one.
Though minister Hashim says that the average cost of a two lane highway in the year 2010 was Rs. 75 million per km, road projects are not generic products like sugar or dhal which can have an average world market price. Every road project is unique and the cost will differ due to various factors. Building a highway elevated on columns across marshy land will increase costs. The levelling of hills, blasting through rock, filling in of marshy or low lying land, the building of bridges and culverts, the width of the road and the number of lanes, the cost of acquiring land etcetera increases or decreases the cost by large amounts. The facts in relation to the particular road projects mentioned by minister Hashim are as follows:

The Lunugamvehera- Katharagama gravel road was upgraded to a 17.2 meter wide four lane highway. The cost of the 13.82 km road was Rs 3,584 million. The cost includes four bridges one of which is 150 meters long, and 30 culverts in addition to the expenses associated with earth excavation, embankment filling and the construction of concrete retaining walls etc. Expressways and highways are planned to take care of the growing traffic demands of the future as well.

The Kalugama-Vilkatupotha road is 22 km in length and the cost of rehabilitating this two lane road was Rs 2,100 million. The existing road was widened and a section of it raised in order to prevent flooding. Excavation, embankment construction, the widening of existing culverts, construction of new culverts, construction of concrete retaining walls etc added to the cost.

The Kegalle By-Pass road was built to ease traffic congestion in Kegalle town. Land had to be acquired from private owners to build this completely new 2.4 km long, two lane 12.5 meter wide road at a cost of Rs. 1,689 million. This road featured a 60 meter long, 15meter wide bridge and 14 culverts of various types, 317 meters of reinforced concrete retaining walls ranging in height from 1.5 to 12 meters, 330 meters of Gabion walls (stones held together by wire mesh)ranging in height from 2 to 9 meters, and over 1.4 km of concrete drains. This road passed through a hilly area with low lying marshy land which made excavation as well as the building of embankments a major part of the project.

A length of 1.54 km of the Jaffna-Punalai-Point Pedro road was reconstructed at a cost of Rs 470 million. The existing road was widened to four lanes with a width of 19.2meters and a 2 meter wide paved sidewalk on either side of the road. Two km of the 5 meter wide Maviddipuram- Keeramalai road was also reconstructed under the same contract. Construction materials had to be transported from as far away as Medawachchiya and Vavuniya and earth, gravel and sand from Kilinochchi resulting in higher costs.

After evaluation by a Cabinet Appointed Consultancy Procurement Committee and subsequent cabinet approval, the consultancy contract for the Matara-Hambantota highway was awarded to a foreign firm at a fee of Rs 11billion. The total construction cost of the highway was Rs 242 billion. Accordingly, the consultancy fee is around 4.5% of the project cost. The consultancy fee for building contracts is usually around 4-8% of the project cost. For example, the consultancy fee for the JICA funded segment of the Outer Circular Highway was 5.8% of the project cost and for the JICA funded New Kelani bridge it was 5.7% of the project cost. The project consultant designs the project, sets the standards and supervises its implementation from start to finish. Given the important role played by the consultants a fee of 4-8% is not excessive. If the new government initiates any large projects they too will have to pay the same percentages as consultancy fees as no large project can be started without a consultant.

Even standard practices in the construction industry are portrayed as instances of abuse by the previous government. In the construction industry, every firm employs sub-contractors to do various aspects of the work while retaining an important part for itself. The responsibility for the project finally lies with the principle contractor. There is no contractor in the world that does not employ subcontractors to a greater or lesser extent. Minister Hashim said that the main contractor of theKalugama-Vilkatupotha road project who had obtained the contract for Rs. 2,100 million had sub-contracted it for Rs 1,600 million and earned an undue profit of Rs 500 million. The main contractor can sub-contract some of the work to third parties but the responsibility for the project lies with the main contractor and he cannot sub-contract that to third parties.

Infrastructure projects are costly and complicated and it is always possible to make various allegations that may seem plausible to the general public who have no awareness of the complexities involved. All costs associated with large projects are scrutinised by technical evaluation committees and cabinet appointed tender boards and everything has to finally get cabinet approval. Our fear is that given the absurd lengths to which the present government is taking this campaign of misinformation, a prejudice against all development projects may be created in the minds of the public - which will finally be to the detriment of future generations in this country.

While the government is engaged in this exercise of vilifying their predecessors with dubious accusations, the development work that was started by the previous government has ground to a halt. Thousands of people are losing their jobs and are not in a position even to celebrate the New Year. We believe the present government should look to the future, instead of wasting time concocting various stories about the past.

Rohan Welivita
Media Coordinating Secretary
to former President MahindaRajapaksa
077 3831849