The Central Expressway Phase 1 has shown little sign of leaving the front pages of controversy. The government in its haste to do a U-turn after disastrously stopping all road projects soon after they came into power, now find that controversy simply will not die down. More importantly and perhaps more potently, the government’s departure from due process will cost the state banks even more money.
If one examines the time line it will be almost an ecclesiastical revelation as to how desperate someone somewhere was to get this project awarded to some favoured group or other.
March 2015: Cabinet decides no unsolicited bids should be entertained as a matter of policy.
June 2015: Attorney General advises the government to issue termination Letters to all local contractors who had these letters issued to them for what was then the Northern Expressway. This included MCC of China
July 2015: Local contractors (4) terminated but Cabinet invites MCC China to submit an UNSOLICITED proposal for the Central expressway Phase 1 – with several facts somewhat fabricated to favour the one party.
July 2015 was a busy month for the Prime Minister and his team: The PM’s cabinet paper of 20th July mentions appointing of committees to negotiate CEP 1 with MCC as the contractor.
This is possibly the first time that the Prime Minister is appointing a committee. The due process is for these committees to be appointed by the Public Finance Department of the Ministry of Finance – to clearly ensure that boyfriends and girlfriends and political appointees are not appointed to such procurement committees.
This contentious Cabinet Paper also recommends the approval of awarding MCC a contract worth Rs 145,790,000,000. Staggering by any account.
On Thursday 16th July 2015 Prime Minister appoints these committees based on the approval from the cabinet within the cabinet, CCEM
On Friday 17th July 2015 the RDA issues letters of appointment to these committees. The astonishing part is yet to come.
Have you ever wondered if the government machinery can work fast? Well read on.. They can.
On Saturday and Sunday – 18th and 19th July (yes when it suits the purpose they work on Saturdays and Sundays apparently) evaluation and negotiation are both concluded on a project that is worth RS 145 Billon to the contractor.
The Prime Ministers is also a pretty fast worker. He signs the Cabinet paper recommending the ward to MCC on the 20th July 2015.
And just two days later the Cabinet signs of on the recommendation presented by the Prime Minister is completed on 22nd July 2015.
In this same cabinet paper the cabinet mandates that a 100% concessional loan is taken out from the Exim Bank of China. To cover the required project cost.
The sad state of affairs is that for four years (First approval 20th July 2015) this project was presented as one that would have 100% concessional funding.
However with the cabinet paper of 30th May 2019 it has become evident that the entire country has been misled. That’s because there is no state to state concessional funding of 100% for this project instead the government has had to instruct the two state banks to come up with the down payment of 15% amounting to over Rs 30 Billion.
We will not practice astrology but we do aver that before too long the borrower of these funds will face insurmountable problems. Meaning that in the fullness of time the State Banks will face the prospect of further losses to be added to their non-performing loan status.
