Project Updates – August 6, 2008
News media in the country say the Ggovernment of Sri Lanka plans to call for fresh bids for the construction of the first terminal at the new Colombo South Harbour next month.
Quoting the Sri Lanka Ports Authority Chairman Saliya Wickramasuriya, sources said that, in February this year after much delay and controversy, the Government awarded the contract to Hutchison of Hong Kong to build the first terminal, even though it was only the second highest bidder.
However, President Rajapaksa cancelled the award soon after and announced the decision to call for fresh bids on the basis of a Cabinet decision to secure national interest in awarding tenders in future.
This resulted in the Asian Development Bank automatically putting off funding of US$300 million for the already delayed construction of the breakwater of the new proposed harbour as one of the key conditions it had laid down for financing the project was the transparent awarding of the tender to build the first terminal.
Hyundai Engineering Construction won the tender to build the Colombo South Harbour breakwater with a bid of Rs.36 billion in September last year.
In May, however the ADB agreed on an alternate formula to allow the construction of the breakwater with US$300 million in funding from the Bank, without awaiting the transparent and competitive awarding of the contract to build its first terminal as earlier stipulated.
The Ports Authority Chairman assured that “there would be no real delay now” in awarding the tender for the construction of the terminal as work on it could not begin without at least half of the breakwater work being completed.
Work on the breakwater by Hyundai Engineering Construction is reportedly progressing smoothly, with the Korean firm already having dredged more than 1.5 million cubic metres of material.