According to highly placed Government sources, there is an increased risk of China Harbour Engineering Company Ltd. (CHEC) moving away from the controversial Elevated Highway Project (EHP) connecting the New Kelani Bridge (NKB) to Athurugiriya.
This, as The Sunday Morning learns, is mainly due to the Build, Operate, and Transfer (BOT) proposal submitted by CHEC now being viewed as disadvantageous.
According to the source, the project will most likely be suspended unless and otherwise a favourable BOT investment is received.
However, when The Sunday Morning contacted the Ministry of Transport and Highways Secretary M.M.P.K. Mayadunne, he noted that there had been no agreement with the CHEC.
“No construction agreement has been signed by the Ministry of Highways with the CHEC,” he said, adding that the ministry had not received any project proposals. “All proposals related to Private-Public Partnerships (PPP) are now being handled by the Finance Ministry under a separate section with the approval of the External Resources Department (ERD),” Mayadunne said.
Nevertheless, in 2021, Cabinet approval was granted to award the construction contract of the elevated expressway connecting the Athurugiriya Interchange and the New Kelani Bridge to CHEC on a BOT basis.
As the Cabinet decision issued by the Office of the Cabinet of Ministers on 24 May 2021 reads, the Cabinet, at its meeting held on 8 April 2020, had granted approval to implement this elevated expressway.
“Accordingly, bids including technical and financial proposals have been invited from the relevant investors for the proposed project. As such, the proposal made by the Minister of Transport to assign the task of implementing the said project to M/s China Harbor Engineering Company as recommended by the Cabinet Appointed Negotiating Committee was approved by the Cabinet.
“In 2020, Cabinet approval was granted to award the construction contract of the elevated expressway connecting Athurugiriya Interchange and New Kelani Bridge to M/s China Harbor Engineering Corporation (CHEC) on Build, Operate, and Transfer (BOT) basis,” the decision by the Cabinet Office stated.
However, prior to calling for new bids, in the midst of Covid in 2020, it was learnt that the Highways Ministry had approved an unsolicited proposal submitted by CHEC to construct the four-lane Elevated Highway Project.
Proposal channelled through BOI
Quoting a source at the time, The Sunday Morning had previously reported that the proposal had been channelled through the Board of Investment (BOI) as an investment project by the CHEC, for which the Ministry of Highways had provided technical support.
The CHEC, which is also the engineering contractor of the Colombo Port City, had submitted the investment proposal for the construction of the elevated highway as a part of the Port City Development Project. The elevated highway was also said to be connected to the Port City.
When The Sunday Morning contacted former Secretary to the Ministry of Roads and Highways Ranjith Premasiri on an earlier occasion, he too confirmed that CHEC’s investment proposal had come through the BOI.
He said the ministry had been directed to provide technical assistance and Cabinet approval had been granted to receive the technical proposal from CHEC.
However, Expressions of Interest (EOIs) had been called by the previous Government for the same project as a PPP, which was to have been funded by the Asian Development Bank (ADB).
CHEC was selected out of the bids comprising financial and technical proposals invited in May last year for the Elevated Highway Development Project and was recommended by the Cabinet Appointed Negotiation Committee.
It is learnt that the CHEC was the sole responsive bidder out of the two submitted bids, as one had been rejected for not having bid security for the project when bids had been invited last year.
The Sunday Morning learns that six parties have collected the bid documents.
As per the discussions held with the CHEC, an 18-year concession period, which includes three years of construction and 15 years of operation and maintenance, has been agreed upon between the two parties with a semi-annual availability payment model.
Environmental impact
It is in such a backdrop that the Central Environment Authority (CEA) recommended that an alternative route be found for the section of the proposed EHP that crosses the Thalangama Wetland. It was reported that the CEA’s Environmental Council had suggested that it was “appropriate to select an alternative area” rather than traverse the Thalangama Environmental Protection Area (EPA).
The EHP was designed to be implemented under two phases.
Phase I of the project is a four-lane road section with a total length of 6.9 km originating from New Kelani Bridge and ending at Rajagiriya. Phase II of the project extends from Rajagiriya to Athurugiriya (10.4 km), connecting with the Outer Circular Expressway.
The project has been in the limelight ever since it was proposed by the Government, as environmentalists as well as residents vehemently opposed Phase II of the project from Rajagiriya to Athurugiriya which ran across the Thalangama Wetland, alleging that it would cause severe damage to the remaining green patches of Colombo’s wetland in Thalangama and Averihena.
Construction work had previously been scheduled to be completed by 2025.
Residents urged the Government to use a different route to avoid the wetland if it really wished to proceed with the project. Some residents alleged that once a mega-scale development project ran through the wetland, there would be severe changes to the surrounding environment.
Since the Thalangama Wetland is one of the very few remaining wetlands in the Western Province, residents stressed the need to protect the area for future generations.
The project was put on hold for several months since the authorities were unable to proceed with the road construction through the wetland, as the Thalangama Wetland, including the Averihena Lake, was declared as an EPA under the National Environment Act (NEA) No. 47 of 1980 as amended in 2017 through Gazette Extraordinary No.1487/10.
However, after the project was earmarked, the Government decided to re-gazette the Thalangama EPA to allow the construction of the proposed EHP.
Meanwhile, a writ petition was filed in the Court of Appeal by the Centre for Environmental Justice (CEJ), seeking an order preventing the construction of the highway.
In the petition, the CEJ pointed out that recognising the uniqueness and importance of this area owing to its ecological, hydrological, and historical importance and after the CEA had carried out detailed studies and research, the Thalangama Tank and its environs had been declared an EPA under the National Environmental Act No. 47 of 1980 (as amended) by Gazette Extraordinary No.1487/10 dated 5 March 2007.
When contacted, Road Development Authority (RDA) Director General L.V.S. Weerakoon said that although the route had been changed in Phase II of the project, the corridor would not be changed.
He added that there would be no major changes as such and no requirement to redo the feasibility reports.
The RDA Director General stressed that when the new route was identified, a separate Environmental Impact Assessment (EIA) would have to be conducted, together with a technical assessment.
“We have not decided or discussed anything with regard to the EHP. If an investment comes with a good BOT project, the EHP will be considered,” he added.