Tuesday, 06 December 2022
Major financial fraud averted in central expressway project

Major financial fraud averted in central expressway project Featured

Prime minister Ranil Wickremesinghe has mediated to prevent a major financial fraud through the awarding of the construction of the third phase of the Colombo-Kandy central expressway project to Japan’s Taisei Corporation.

When tenders were called, Taisei had not submitted a bid bond, as specified in national procurement guidelines.

It had chosen Japan’s Mitsubishi Bank as the funding source for the construction work.

This bank’s local agent is Arjun Aloysius, son-in-law of former Central Bank governor Arjun Mahendran.

On October 06, Sri Lanka Mirror made the exposure of this serious financial fraud by a VIP, which included an exchange of correspondence between the Japanese ambassador in Sri Lanka and the chairman of the UDA.

Titled ‘Tender fiasco in 3rd phase of central expressway’, the revelation left the parties involved much concerned.

On October 10, top officials of the Japanese embassy met the PM and discussed the one billion dollar funding and a Rs. 100 million advance from Tokyo Mitsubishi Bank UFJ.

The premier told them that the contract could not proceed.

Later, the contract to construct the phase under Japanese funding was cancelled by the economic subcommittee.

The PM had not responded to an intimation by head of the Japanese embassy Izumi that Mitsubishi Bank could release the funding.

Taisei has informed its local agent that the Japanese PM would write shortly to the Sri Lankan president and the prime minister at its request.

What happened previously

Previously, without calling for open tender, the RDA requested the Japanese ambassador in Sri Lanka in writing on May 24 to name a Japanese company to construct the third phase of the expressway.

Pursuant to the request, the Japanese Chamber of Commerce and Industry in Sri Lanka recommended the names of three Japanese companies which have a presence in the island, with the mediation of the Japanese prime minister’s special adviser Hiroto Izumi.

The bidders were Taisei Corporation, Penta-Ocean Construction and Wakachiku Construction.

Izumi works very closely with Taisei Corporation, reports say.

However, Taisei Corporation had not given a bid bond as specified in the tender.

Both Penta-Ocean Construction and Wakachiku Construction have not carried out road construction in Sri Lanka, but had engaged in port-related activities only.

Neither made a bid when the tender was opened and the only bidder was Taisei Corporation.

The Tokyo Mitsubishi Bank UFJ will receive a 10 per cent success fee for the successful closure of the transaction.

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Tender fiasco in 3rd phase of central expressway

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