The Parliamentary Committee on Public Enterprises (COPE) has been informed that the Airports and Aviation Services (Sri Lanka) (Private) Limited (AASL) has paid Rs. 37 billion to Taisei Corporation for the Passenger Terminal Building & Associated Works construction contract, Package A, for an actual progress of about 5.44%, compared to the expected physical progress of 30%.
According to a Parliament statement, the matter was revealed when the COPE Committee met in Parliament recently under the chairmanship of MP Nishantha Samaraweera to examine the current performance of the AASL.
During the meeting, officials said that due to the circular issued by the Ministry of Finance on 12 April 2022 titled “Interim Policy on Servicing of Sri Lanka’s External Public Debt”, the Japan International Cooperation Agency (JICA) had suspended the release of loan instalments for the project.
They revealed that as a result, the contractor had stopped construction work on 09 December 2022 and had to make a payment of Rs. 37 billion, including the loss incurred as a result.
The Committee questioned how reasonable it was to pay such a large amount to Taisei Company for an actual progress of about 5.44%, even after two years of the contract period had elapsed in a project for a period of 3 years.
Furthermore, the COPE Committee discussed at length the award of contracts to a company other than the Taisei Company to minimise damage to the construction after the construction work was stopped, and the additional cost of Rs. 1,328.7 million that was incurred for those contracts.
It was revealed that after the construction work of the said project was halted, the materials and equipment, purchased for a value of Rs. 1,550 million by the contractor for the project, were taken over by AASL and were stored in private warehouses under the contract with the local subcontractors of the project.
In this regard, the Chairman of AASL had appointed nine committees, and according to the evaluation and recommendations of the said committees, it was informed that Rs. 392,904 could be saved monthly by moving their incinerator to another warehouse.
The Committee also drew attention to the fact that the company had to incur additional storage costs of Rs. 3.9 million from March 2023 to December 2024 due to the non-implementation of those recommendations. (Newswire)