Hanky-panky by consultants in awarding lift contract for tallest telecom tower surfaces


The Telecommunication Regulatory Commission Committee questions selection of bidder for 650 million rupee lifts for the country’s tallest telecommunication tower now under construction at D. R. Wijewardene Mawatha, without compliance with bid safety standards and with no after sales service centre in Sri Lanka 

The selection of suppliers for lifts and escalators for Sri Lanka’s tallest iconic telecommunication tower has come under strong criticism from a special committee of three Commissioners appointed by the Telecommunication Regulatory Commission of Sri Lanka (TRC).  

The three member-committee has been appointed following a request by the Director-General TRC M. M. Zuhair PC at a recent meeting of the Commission presided by TRC Chairman and Secretary to the President P. B. Abeykoon.

The Committee’s findings have disclosed that the selection process handled by the three consultants appointed from a university teaching architecture had been dragging on between the Consultants and the Chinese contractor for over one and a quarter year from about October 2013. The decision to sub-contract the lifts and escalators has been taken by the consultants only in February 2015.

The supplier had been nominated by the consultants, without any reference to the TRC, within two weeks of the appointment of the new Chairman and Director-General by President Maithripala Sirisena. The Committee report reveals that the Contractor or the Consultants had not disclosed or obtained the approval of the TRC in nominating one of the bidders as the supplier of lifts and escalators though the contract agreement stipulates that the Contractor and the Consultant must obtain the specific approval of the TRC. The approval of the former TRC Chairman Lalith Weeratunge or former DG Anusha Palpita or the Cabinet Appointed Negotiating Committee or the Implementation Committee has also not been given to this nomination. Tender system had not been followed at any time in this ‘Design and Build’ contract.

The projected total cost of the 350 m high telecommunication tower commenced by former president Mahinda Rajapaksa is in the region of Rs. 25 billion of which lifts and escalators are estimated to cost around Rs. 650 million. The tower project will be funded with 15% from TRC funds and the balance on a commercial loan from EXIM bank of China at the non-concessionary rate of LIBOR plus 4% approved on a proposal by former President Mahinda Rajapaksa.

The report reveals that as early as December 2013 the Consultants had recommended another well-known brand and had initiated discussions pertaining to a five-year maintenance agreement as well. However safety standards for the manufacture and installation of the lifts had been imposed on the bidders only in March 2014 and that too on an out-dated 1998 safety standard which had already been superseded in March 2011 by 1998+A3 2009. The Committee had expressed deep concern that the Consultants were apparently unaware of the latest safety standard for lifts that came into effect in 2011 even after three years! Several other bidders had also submitted their bids based on the safety standard imposed in March 2014. However when the Consultants realized and decided to impose the Hater safety standard, the front line bidder recommended for nomination by the Consultants in December 2013 was given only 5 days to comply with the newly imposed later safety standard and immediately treated as disqualified.

It appears that disqualifying this bidder who had been previously recommended for award, had taken place only after the unannounced entry of a new bidder in August 2014 who finally turned out to be the successful bidder!

On 24th August 2014, the Chinese Contractor had informed one of the Consultants that ‘as requested by her’ they were submitting the quotation of this new entrant. The Chinese Contractor had also stated in this letter as follows, the new entrant "has no previous engineering projects in Sri Lanka. There is much uncertainty concerning their future plan and market in Sri Lanka. How to ensure the quality of after sale service is beyond our knowledge"

The report also points out that this new entrant had been selected for the award without their complying with the safety standards imposed for all other bidders. Code compliance has been given by this bidder as Japan Industrial Standards while others were given international standards as amended with only 5 days for compliance. The report states that the frontline bidder who was disqualified by the consultants for non-submission had in fact submitted their compliance with the amended safety standards without any extra cost or charges. This had been ignored by the Consultants who had been acting without any approvals from the TRC.

 The consultants thereafter proceeded to recommend the new entrant even though they did not have a single after sales service centre in Sri Lanka, considered vital for a 24 hour-5year maintenance of these high speed lifts. The Chinese contractor had already warned the consultants in writing that with such grave doubts surrounding this bidder’s future plans in Sri Lanka, "how to ensure the quality of after sales service is beyond our knowledge".

 The Committee has also noted that the statement that this brand was made completely in Japan is not accurate where as it is made mainly in China and sometimes in Japan/China. 

The committee has reported that the entire exercise of selecting this brand is questionable and not made in a transparent manner and also based on incorrect premises some of which had been highlighted in the report

TRC has also stated that no other bidder has been selected pending the report being tabled at the next Commission meeting, yet to be scheduled. 

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