Ranil raises red flag in P’ment over fresh deals for unreliable Chinese firm

Thursday, 5 September 2013 01:11 -     - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama Our Lobby Correspondent Opposition Leader Ranil Wickremesinghe yesterday in Parliament questioned the aptitude and reliability of China Machinery Engineering Corporation (CMEC), a key contractor hired by the Government for several major projects including the “failed Norochcholai power plant”. Given the poor track record of the Chinese firm, the UNP Leader also questioned the suitability of awarding a fresh $ 229 million water project to the same company. “CMEC, originally known as the China National Machinery & Equipment Import & Export Corporation, undertakes the construction of power plants both hydro and thermal as well as power transmission lines. The CMEC was entrusted with the construction of the Norochcholai power plant. This power plant is not yet fully operational and has failed four times since its commissioning. The failure of the Norochcholai power plant according to the Government is one of the reasons for the increase in electricity tariff,” he said. “The CEB’s Technological Engineers Union has blamed the company for the breakdown and further stated that all these breakdowns are happening just to extend their maintenance contract. Therefore, a question has arisen as to why such a large contract was awarded to a company which has failed to perform on an earlier contract. Furthermore, the CMEC has limited experience with regard to water supply schemes. It is an accepted practice of the Government not to award a tender to any company which has defaulted in executing an earlier construction project,” added Wickremesinghe, questioning the suitability of awarding CMEC the $ 229.5 million worth water project in Gampaha. Opposition Leader also said CMEC’s main corporate mission is expanding power transportation and telecommunication sectors. The modus operandi of the CMEC is, once it obtains a contract, to sub contract the construction work and to focus on the supply of machinery and equipment, with the Pakistan hydropower station being a case in point. This is in contrast to the modus operandi of Western engineering companies which specialise in construction. CMEC’s experience in water supply projects are limited. This is not a part of its core business though it has undertaken few projects in Angola and Republic of Congo. The Gampaha, Attanagalle and Minuwangoda water supply scheme involves the construction of the Basnagoda Impounding Reservoir on the Attanagalla Oya. This includes an 18.5 MGD capacity intake together with a water treatment plan. The CMEC has not constructed such reservoirs. It is clear that the CMEC does not have the experience or the capacity to undertake this project. According to informed sources, the CMEC is likely to sub contract the construction to another firm. The CMEC will provide the machinery and equipment. Any reputed experienced construction firms specialising in this sector could undertake this project for about $ 150 Million. Therefore a minimum of $ 75 million extra is being paid for this project to a company inexperienced in the construction of integrated water supply scheme. CMEC has built three thermal power plants in Turkey, one in Pakistan, one in Malaysia, one in Indonesia and two in Belarus in addition to the power plant in Norochcholai. CMEC has also constructed five power transmission projects: In Africa, Equatorial Guinea and Angola. Furthermore, this company has a bad record in regard to CEB Thermal Power Plan at Norocholai. CEB in Sri Lanka has more experience in hydro power projects. In response Chief Government Whip and Water Supply Minister Dinesh Gunawardena said: “We have selected CMEC having considered a voluntary proposal (unsolicited project proposal) presented to us to eradicate the drinking water issues in Colombo district. A technical committee evaluated their experience and the capability to handle the said project. Subsequently the Cabinet approval was also obtained to continue. Initially the project was on from 2012 and was expected to finish by 2014. However, later it was decided that project will be extended from 2014 till 2017 to achieve more results in terms of expansion. There were no other bids received for this project and the extension of the period till 2017 was one factor that kept other contractors away. CMEC has its branch office at JAIC Hilton room 601 in Colombo. Although the contract is awarded, the respective funding agreement is yet to be finalised.”