University of Ruhuna gets Rs. 197 m; interim injunction sought by Link Engineering dismissed

The Commercial High Court of Colombo has recently dismissed the interim injunction sought by Link Engineering Ltd., against encashment of the performance and advance bonds provided by BOC corporate branch Colombo by its client University of Ruhuna (Case No. CHC/03/2020/MR).

In this case, a contract was awarded by the University of Ruhuna (UOR) to Link Engineering Ltd. to build an academic building with 12 floors. Building has two 300 seat lecture halls, two 300 seat capacity multipurpose halls for examinations, student canteen, 24 tutorial rooms, six large space laboratories, research laboratory and purpose designed skills laboratory with an underground car park.

Although the contract was awarded in 2017 to be completed by November 2019, Link Engineering did not even complete the foundation. According to the submissions in the CHCC by the UOR, the case was complicated by construction quality issues as a result of a subcontract for piling awarded to a company not registered with ICTAD to construct piles which resulted in pile test failures.

UOR terminated the contract and awarded it to the Central Engineering Construction Bureau(CECB) with the approval of the Cabinet on 6 July 2020 and now the building has gone up to the seventh floor.

In this process, the foundation had to be strengthened with the advice of technical experts in structural engineering from University of Moratuwa and design consultants at an extra cost of Rs. 95.26 million. With the delay of substructure, the shoring system had to be strengthened at an extra cost of Rs. 18.57 million. The total of Rs. 113.83 million of extra cost was spent by the UOR.

Link Engineering was able to get an interim injunction against the encashment of advance and performance bonds citing unfair termination after the contract period ended in November 2019. The interim injunction granted was dismissed by the Judge of the CHCC in the verdict delivered on 25 October 2022. UOR immediately claimed the bonds worth Rs. 197 million. Deputy Solicitor General Milinda Pathirana PC appeared for UOR.

UOR said the loss to the University and the country in this case is unprecedented and cannot be calculated in monetary terms. As per the plan by the Faculty of Medicine, UOR was to increase the intake into the Faculty of Medicine up to 300 which could not be done yet due to absence of the planned facilities by early 2020.

As a direct result at least 100 students could not enter medicine stream from 2020 onwards and consequently the same numbers missing dental, agriculture, veterinary science and bio science streams in the same sequence in the University Grant Commission managed university admission system.

This would not only delay the filling of the medical officer cadre in the Ministry of Health for years.

Construction costs have escalated drastically making it almost impossible to complete the scope of the building within the Cabinet approved budget in 2020.

Hence, the costs of lost opportunities and escalation of prices cannot be even imagined in the current context.