Setting the stage for a possible legal battle, the Road Development Authority (RDA) has rejected a renewed claim from China Harbour Engineering Corporation (CHEC) for billions of rupees “in outstanding dues” for building the Southern Expressway’s Kottawa-Dodangoda section, which was opened more than 15 years ago.
CHEC has sent the RDA a letter of demand for Rs. 7.91bn, which it insists are unpaid monies for the 35km stretch inaugurated in 2011, authoritative sources said. The disbursement deadline was given as March 31, 2025.
However, the RDA’s Director (Legal) wrote back to the CHEC earlier this month rejecting the request on the basis that there were no dues owed. The Authority will now apprise President Anura Kumara Dissanayake of the protracted dispute and call for a criminal investigation, the sources said.
But the RDA could face hurdles. In 2024—just weeks before the presidential election—the Cabinet had hurriedly sanctioned the payment to CHEC. Eleven days later, a settlement agreement was signed between then Highways Ministry Secretary Ranjith Rubasinghe (also Acting RDA Chairman) and the Chinese party.
The Japan Bank for International Cooperation (JBIC) funded the Kottawa-Dodangoda section. CHEC was the contractor, while the engineers were the Tokyo-headquartered Oriental Consultants Co. Ltd. (OCCL).
In 2011, a dispute broke out between CHEC and OCCL, with the Chinese company demanding payment for work that the consultant said had not been certified. The claim was denied at least three times—not only by OCCL but also the project office that held it was “not justified”. Additionally, there was wide opposition to it within the RDA.
CHEC did not follow standard contract administration procedures, the sources pointed out. For instance, it failed to take its case to the dispute adjudication board (DAB) within 28 days. Had the company been unhappy with the DAB decision, an amicable settlement could have been reached. The final step was arbitration.
Instead of all this, CHEC kept its claim alive for 12 years and engaged in direct negotiations in what critics said was “a shortcut”.
In 2014, a committee appointed by the Highways Ministry’s then Secretary, R.W.R. Premasiri, recommended the payment, but this was not followed through. Amidst continued pressure from CHEC, another Highways Ministry Secretary, M.M.P.K. Mayadunne, appointed a new committee, which suggested in 2023 that the claim be settled based on the previous committee’s recommendation.
This report was forwarded to then-President Ranil Wickremesinghe’s Cabinet, and, after receipt of the Attorney General’s instructions, the payment was approved. Subsequently, at least two complaints were filed with the Commission to Investigate Allegations of Bribery and Corruption, citing the settlement agreement.
(sundaytimes.lk)
(Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)
