Govt. in discussion with MCC

The Government is looking at proceeding with the long-delayed construction of the third stage of the Central Expressway, with an initial discussion being held last week with the Metallurgical Corporation of China (MCC), The Sunday Morning learns.

It is learnt that officials from the Treasury and MCC had held an initial discussion on construction work of the third stage of the Central Expressway.

A highly-placed Government source told The Sunday Morning that the preliminary discussion with MCC was focused on how to secure the required funding, given that the Exim Bank of China was unable to disburse any loans to Sri Lanka due to the island’s decision to default on its external debt and the ongoing discussions with the Chinese bank to restructure the loans.

“The MCC was asked to look at alternative funding mechanisms and the officials have agreed to discuss the funding further at the next meeting,” the source said.

A loan of $ 52 million had been sought from China’s Exim Bank to commence the construction work of Stage 3 of the Central Expressway while the total cost for the project has been estimated at $ 1 billion.

During last week’s discussion, MCC had informed the Government that it could complete the project by September 2024 if the development work commenced this year.

The construction work of the 44-kilometre third section of the Central Expressway from Rambukkana to Galagedara was mired in controversy following a clash between MCC and Lanka Infrastructure Development Consortium (LIDC) earlier this year.

The controversy resulted in the MCC writing a letter to then President Gotabaya Rajapaksa, claiming that it was the lowest bidder and that its bid was not even opened before finalising the tender to be given to the LIDC.

MCC in its letter to the former President had noted that it had already completed the Colombo-Katunayake Expressway and Colombo’s Outer Circular Highway ahead of schedule to the full satisfaction of the Ministry of Highways, pointing to the huge disparity in the estimated cost for the project between the two bidders.

The Chinese Embassy in Colombo also intervened in the matter and urged that the Sri Lankan Government approach the matter in a transparent and an unbiased manner.

LIDC, issuing a statement in March this year in response to the allegations made by MCC, pointed out that the bids of the two other bidders – China State Construction Engineering Corporation (CSCEC) and MCC International Incorporation (MCCI) – had been disqualified on technical grounds and therefore it was unreasonable to find fault with their company.

“A press release and letter dated 10 February 2022, on a Metallurgical Corporation of China Ltd. (MCC) letterhead (and signed by MCC) circulating in the media purports to explain the various misdeeds in their bid in order to justify its qualification and validity. As LIDC has reliably come to understand, the project bid in question was made by MCCI, which is a subsidiary of MCC, its parent company.

“It has also come to light that in an attempt to qualify for this bid, the bidder had submitted financial details and specific experience of the parent company MCC, without the parent company being a legal part of MCCI’s bid, thereby disqualifying MCCI’s bid as per the bid conditions,” the statement added.