Taisei pulled from Central Expressway phase 3 and rewarded with BIA project

Taisei pulled from Central Expressway phase 3 and rewarded with BIA project

Taisei pulled from Central Expressway phase 3 and rewarded with BIA project

Written by Staff Writer

25 Feb, 2020 | 8:31 pm

Colombo (News 1st) – The Cabinet has decided to revoke the contract signed with Japan’s Taisei corporation for construction on phase 3 of the Central Expressway. Incidentally, the Taisei Corporation was recently awarded the 500 million dollar contract for the expansion of the Bandaranaike International Airport.

The Taisei Corporation has faced a slew of allegations in Sri Lanka and overseas in recent times over irregularities in awarding contracts. Amidst those issues, the contract signed to construct the 3rd phase of the Central Express Way takes center stage.

The Taisei corporation was excluded from the first tender process for the project as a result of failing to deposit the mandatory bond along with their bid. When tenders were re-called the Taisei corporation submitted the highest bid. Following a request submitted by the Sri Lankan government to the Embassy of Japan, the Fujita corporation also submitted a bid for the project. Fujita was also deemed unfit for the project so the construction reverted to Taisei Corp.

At that time Taisei was facing allegations of impropriety over a major sinkhole on a major road in the city of Fukuoka, Japan. The cave-in occurred whilst the Taisei corporation was doing excavation work for a tunnel. The Taisei corporation has fallen into disrepute globally due to scandals involving tender processes.

In February 2017, Japan’s Fair Trade Commission accused the corporation of carrying out tender fraud. The company was charged with the criminal offense of violating anti-monopoly laws in Japan. In its annual report, the Taisei corporation admitted guilt and apologized for their actions.

The Taisei Corporation was also suspended from involvement in construction work for the 2020 Tokyo Olympics after its executives were accused of impropriety in the tender process for securing these contracts.

In Sri Lanka, the Taisei corporation was previously alleged to have failed to construct one more floor of the Hilton Hotel. This matter was subsequently taken to court.

Whilst work is yet to commence on phase 3 of the central expressway, phase 2 can only be completed upon the construction of the Pothuhera interchange. When the Sri Lankan government demanded that Taisei corporation turn over the Pothuhera interchange, the corporation noted that if the construction of the interchange was to be taken away from them, they would not carry out construction on the road section as well.

It is the same corporation that demanded compensation of 4 billion rupees from Sri Lanka due to delays in taking over the Colombo Outer Circular Highway upon its completion. Hiroki Horikawa functions as the Taisei corporation’s main representative in Sri Lanka. It is against this backdrop that the Taisei corporation has now been awarded the contract for the BIA expansion.

Chairman of Airports & Aviation Services (Sri Lanka) Ltd Maj. Gen. (Retd.) G.A. Chandrasiri noted that they hope to sign the agreement with Taisei Corporation within a week. He noted that they received an application from Taisei for the construction of Terminal 2 of the BIA in the first half of 2017. He noted that by November 2019 all requirements were fulfilled adding that Cabinet approval was granted in 2019 and again by the current administration.

“It is evident to us that they (Taisei Corp.) are an efficient corporation..” –   G.A. Chandrasiri

Should the public simply accept the awarding of a major contract to a corporation with such a track record, obtaining a loan of 500 million dollars citing a decision by the previous government, when a new government was elected almost three months ago?

How do these corporations retain their power after power changes hands between parties?

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