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A Multi Billion Rupee Blunder a.k.a The Rajapaksas

[The Sunday Leader.lk, Monday, 22 August 2011 08:55 No Comment]

By Indika Sri Aravinda

Sri Lanka has sought more money from China to remove a massive rock in the seabed near the entrance of the Hambantota port.

Hambantota port chief engineer Agil Hewageegana told The Sunday Leader that Sri Lanka has sought US $85 million from China (Over Rs. 9 billion) for this purpose.

He said that the money will also be used to complete some of the work on the port itself, which has been built with Chinese assistance.

Hewageegana said that US $ 360 million given by China already has been utilized to construct the port and the money will be repaid beginning next year.

In April this year The Sunday Leader exclusively broke the story that a rock, 10 metres in length, submerged by the sea waters, has been found at the mouth of the harbour in Hambantota, at a depth of seven metres.

This was after the port had “opened” with much fanfare in November 2010.

At that time we reported that the “Hambantota rock” cannot be blasted at once because that would damage the built in infrastructure already on board in the Hambantota Port and put up at enormous cost.

So what the authorities began doing was blasting it “bit by bit” where a third of the blasting work had been completed.

But the point is, that the deeper one goes, in the blasting work, costs also go up.

The fact is that the government was pre warned by a consultancy firm called SNC Lavalin of Canada  when they did a feasibility study under a grant during President Chandrika Kumaratunga’s regime between 1994 and 2001. Afterwards another feasibility study at a cost of US$ 2 million was executed by Ramboll of Denmark when President Mahinda Rajapaksa was Ports and Fisheries Minister during the tail end of the aforesaid Kumaratunga regime with the cost being borne by the SLPA.

In April this year Sri Lanka Ports Authority Chairman Dr. Priyath Bandu Wickrama told The Sunday Leader in an interview that additional costs are due to having to blast and remove the bedrock found in the harbour which would cost US$ 82 million (Rs. 9 billion).

“There were two feasibility studies undertaken in the recent past on the Hambantota sea port. First, SLC Lavalin, a Canadian consultancy firm had done a feasibility study on a grant. Then a Danish consultant undertook another as the first feasibility study was identified to be a non-marketable document considering its very preliminary nature.

Feasibility studies are anyway preliminary with regard to the design or construction as the purpose of these studies is to evaluate the feasibility under a limited budget as the first step to proceed.

Reports of these feasibility studies are with the SLPA and the SLPA has used these studies appropriately,” he said.

Dr. Wickrama added, “the loan amount from China Exim Bank is US$ 306 million with the interest of 6.3%. A one year grace period is followed on completion of the construction. The loan repayment period is 11 years with two installments per annum.

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