The Cabinet has approved a revised agreement with Maga Engineering (Pvt.) Ltd. to complete the remaining construction work of the Sethsiripaya Phase III project, which was temporarily suspended after work began in 2021.
The project was launched by the Urban Development Authority (UDA) to meet the growing demand for office space among government and semi-government institutions. Its original estimated capital cost was Rs. 16.7 billion.
Construction began in 2021 and progressed up to the completion of three floors before being suspended due to economic instability, shortages of raw materials, import restrictions and rising construction costs.
The government has since identified the need to expedite the completion of the project to address the office space requirements of state institutions. Under the proposed financing arrangement, office space in the building is expected to be allocated to the Ministry of Energy, Inland Revenue Department, State Pharmaceuticals Corporation and the UDA, with the institutions contributing financially in proportion to the space allocated to them.
The project’s total estimated cost, including expenditure already incurred, the cost of the remaining work and applicable taxes and other expenses, has been revised to Rs. 38.48 billion.
Maga Engineering, the original contractor for the project, submitted a technical and financial proposal to complete the remaining work without altering the project’s original scope.
Following an evaluation by the relevant review committee, the contractor agreed to complete the remaining work for Rs. 22.76 billion, excluding the value of completed work, payments due, provisional sums, taxes and daywork costs.
The Cabinet approved a proposal submitted by the Minister of Transport, Highways and Urban Development to enter into a revised agreement with Maga Engineering for Rs. 25.58 billion, covering the value of completed work and payments due, while excluding provisional sums, taxes and daywork costs. (Newswire)