Wheeler Dealing á la Weerawansa
By Nirmala Kannangara – (With supportive documents)
Employees attached to institutions that were under Weerawansa’s purview when he was the Housing and Construction Minister have now come out openly and accuse him of offering tenders to the highest bidders disregarding government rules and regulations, simply for financial gain.
Weerawansa is being accused of abusing the powers of the office held by him in order to earn millions of rupees at public expense.
During his tenure as a JVP parliamentarian, Weerawansa’s wife was known to operate a small communication center in Kadawatha and the only asset owned by him was a four-perch land in Millegahawatte, Pahala Biyanwila that was owned by his wife.
However, Weerawansa has now come a long way to own one mansion and another that is still in the construction process. The second house that is being built in the same compound at Mangala Mawatha in Hokandara South has been estimated to be worth over Rs. 70 million. Weerawansa’s wife owns a garment factory – Randunu Fabrics (Pvt) Ltd in Biyagama and a production house at Polwatte in Pannipitiya.
However, records only indicate his assets as only a four perch land in Millegahawatte, Pahala Biyanwila owned by his wife.
Although Weerawansa’s wife claims that she does not own a garment factory in Biyagama, The Sunday Leader is in possession of the Company Registrar document to prove her involvement in the business until recently.
During his tenure as the Housing and Construction Minister during the Rajapaksa regime, Weerawansa has openly flouted government rules and has instructed his officials to abide by the rules he has initiated.
“None of the tenders were offered to the rightful tenderer, but to the highest bidder – Ceylon Steel Corporation which is alleged owned by a family member of a powerful politician of the previous regime,” sources at the State Engineering Corporation said.
Sources who wished to remain anonymous said how tenders were offered to Ceylon Steel Corporation, which is a foreign company with 6.25% shares owned by Sri Lankans.
“According to Section 7, sub section 7.9.5 and 7.9.6 of the Procurement Guideline of 2006, when offering tenders, the first preference should be given to the companies that have major shares for Sri Lankans. If the tenderer is the sole owner of the company, the owner should be a Sri Lankan. If it is a joint venture, 50% shares should be owned by Sri Lankan nationals and if it is a company, the company should be registered in Sri Lanka and over 50% shares should be owned by Sri Lankans. Although the regulations say so, on the instructions of Weerawansa all tenders were offered to Ceylon Steel Corporation which is owned by Onyx Heavy Industries and Constructions (Pvt) Ltd registered in British Virgin Islands,” sources claimed.
According to sources, the Sri Lankan ownership of Ceylon Steel Corporation is 6.25% and the ownership has 93.75% shares. This company has clearly mentioned that it is not a Sri Lankan company in its 2013/2014 annual report although Weerawansa wanted his officials to offer all the tenders to this company without allowing the Technical Evaluation Committee to follow the Procurement guidelines.
“Whenever tenders were called to supply steel to State Engineering Corporation (SEC), only four parties – the Ceylon Steel Corporation, Melwire Rolling (Pvt) Ltd, Indu Sri (Pvt) Ltd and G.T.B. Private Limited sent their bids. Other than Melwire Rolling (Pvt) Ltd which is a 100% Sri Lankan company, other three bidders are foreign companies,” sources added.
Meanwhile, the SEC internal auditor, on the instructions of the present Chairman in one of its reports to the Chairman dated April 1, 2015 has clearly stated how the then administration bypassed tender procedures and offered the tenders to the highest bidder incurring losses to the Corporation to the tune of millions of rupees.
“The tender procedures were not followed after Weerawansa took over office. If the tenders were offered to the lowest bidder – Melwire Rolling (Pvt) Ltd, the corporation would have saved Rs. 37.275 million,” sources said.
Tender to CSC
According to the Internal Audit report, tender (SDQ/ S-2/ 39,37/ 2011) which was offered on March 1 to purchase steel, Melwire Rolling (Pvt) Ltd had submitted their rates as Rs. 92,000 per M/Ton (without VAT and NBT) and Ceylon Steel Corporation Limited has submitted Rs.101,200 per M/Ton. Despite the Technical Evaluation Committee (TEC) recommendation to the lowest bidder, the then Chairman Jagath Kumara Perera has allegedly offered the tender to Ceylon Steel Corporation claiming it is a local company.
“It was the same procedure that had been followed in 2012 as well.
When tenders (SDO/S-2/45/2012) were called to supply steel for year 2012, GTB (Pvt) Limited, Ceylon Steel Corporation, Indu Sri (Pvt) Ltd and Melwire Rolling (Pvt) Ltd submitted their prices but the TEC rejected Melwire application for technical issues. Instead of offering to the lowest bidder, the then Chairman had offered the tender to Ceylon Steel Corporation once again claiming it to be a pure Sri Lankan venture.
How could Jagath Kumara Perera claim as such when there were reports that this is a foreign company and only 6.25% shares are owned by Sri Lankans,” sources claimed. Sources further said how the SEC purchased steel without calling tenders in 2013 and 2014 from Ceylon Steel Corporation.
Loss of several millions
“Although tenders were called (No: SDQ/ S-2/ 45/ 2012) to supply 150 M/Tons and as its value was over Rs. 50 million, and a ministry officials should have been a member of the Procurement Committee to give the approval, only the then Chairman and the then Deputy General Manager had given the approval to the highest bidder. As a result of these malpractices with the direct involvement of Weerawansa, the country has lost several millions of rupees,” sources added.
Sources further accused Weerawansa of giving directions to pay Ruwan Trade Center and Jayalath Constructions for supplying tar and granite to an Asphalt Plant in Galpatha and in the Kalutara District that manufacture the special tar to carpet roads.
“All these directions to the SEC had come from Weerawansa through Mohommed Muzammil, the then Working Director to the then Chairman Jagath Perera and finally to the then GM, M. R. Jeyachandran. Ruwan Trade Center is owned by the Homagama Pradeshiya Sabha Chairman who is a member of Weerawansa’s National Freedom Front (NFF) and Jayalath Construction is owned by a member of the Horana Pradeshiya Sabha who is also a member of the NFF. Although the two parties did not supply the tar and granite to the Asphalt Plant, on Weerawansa’s instructions Rs. 8 million and Rs. 6 million each were paid to Ruwan Trade Center and Jayalath Construction respectively,” sources said.
Meanwhile, it has also been revealed how Weerawansa had appointed one of his cronies, the then General Manager SEC M. R. Jeyachandran as the Director General, Department of Buildings bypassing the promotional procedure.
“Generally, promotions are given according to seniority but, in this instance, the GM, SEC was brought in to the Director General’s post,” sources from the Department of Building Materials said.
Weerawansa is further accused of giving five houses out of six that were constructed by one of the companies that came under his purview when he was the Minister of Housing in prime locations at Mattegoda and Kahathuduwa to his family members.
Ocean View Development Company (Pvt) Ltd of No. 25, Ocean Tower Building, Station Road, Colombo 4 is a government owned Construction Company. Fifty seven per cent of its shares belong to the National Housing Development Authority and 43% shares are owned by Urban Development Authority. It is this company that had built the houses in question at Mattegoda and Kahathuduwa as an initial step of two housing projects.
Using his powers as the subject minister, Weerawansa has given these houses to his own siblings, their children and his wife’s family without following the normal procedure.
“We have documents to say how these parties have sent small pieces of paper to the then Chairman. Ocean View Development Company requesting to grant them houses. Interestingly, these requests have been granted within less than two weeks without even checking whether these parties are financially sound to pay back the money within 24 months,” an employee attached to the Ocean View Development Company told The Sunday Leader on condition of anonymity.
Down payment only
According to sources, Weerawansa’s family was eyeing these houses from the time the construction work had started. Sources added that instead of signing a contract before the houses were handed over, Ocean View Development Company had only obtained a down payment of 10% of the total value and given away the houses to Weerawansa relatives without any other conditions.
“Although the houses built by our company are sold at market value, the two houses that were built at Mattegoda and the four houses at Polgasowita were not sold at market value but were given away for a down payment of 10% waiving off the balance secretly,” sources said.
Sources further said that had the former regime received yet another mandate on January 8, to further govern the country, these houses which cost around Rs.12 million each would have been given free of charge to the former Minister’s relatives.
“If the Developer sold these houses following the government procedure, then the company should have entered into agreements with the parties and should have asked them to pay the monthly installments which they have never complied with,” sources alleged.
It is learnt that it was only after the change of Government and a new Board of Directors were appointed, the former minister’s involvement in the housing racket was unearthed.
“It is public money that has been spent to construct these houses. It is neither the Board of Directors’ nor the former minister’s private money. The former minister’s brother and sister had benefitted from the two houses in Mattegoda valued at Rs.14.544 million and Rs.15.132 million respectively while four houses in Kahathuduwa were given to the former Minister’s brother-in-law, sister-in-law, nephew (sister’s son) and an officer attached to the Presidential Media Unit during the previous regime who is now attached to the Urban Development Authority Media Unit,” sources claimed.
According to sources, violating the rules and regulation of the construction company, the previous management had given away these houses without sales agreements with the buyers, leaving many loopholes for the buyers to slip away from paying the money back to the developer.
“Hence the houses situated at the ‘Haritha Kedella’ housing scheme at Mattegoda, which is valued at Rs.15.132 million has been given to a resident of Maviththara, Piliyandala and the house on another plot at the same housing scheme which was valued at Rs.14.544 to a resident of Maharagama.
Meanwhile four houses at the ‘Haritha Kedella’ housing scheme in Kahathuduwa were given to a resident of Polgasowita together with another house valued at Rs.9.434 million; another house valued Rs.11.374 million to a resident of Kundasale; a house valued at Rs.10.361 million to a resident of Madapatha and a house valued at Rs.12.154 million to a resident of Morawaka. Except for the last recipient, all the others are the former minister’s own family members,” sources claimed. According to sources, it was only after an inquiring committee headed by a retired Judge was appointed to look into the misappropriation of public funds at the construction company, that the former Minister’s relatives handed over the keys of the said houses back to the developer claiming that they do not have funds to pay back the installments for the houses.
When contacted by The Sunday Leader, former Chairman Jagath Perera, who was also the former Chairman, State Engineering Corporation under whom the tenders were offered to the highest bidders, said the houses had been given after following the normal sales procedure.
When contacted, Director General, Department of Buildings, M. R. Jeyachandran, who was the General Manager SEC when the tenders were offered bypassing the tender procedure, said that he was not involved in any misdeed and was not a member of the tender committee.
“I always worked following the government rules and no one can blame me for any malpractice. I knew nothing about these tenders,” he said. All attempts to contact Ministry Secretary P. H. L. Wimalasiri Perera for a comment failed as he did not answer the phone.
Former minister Wimal Weerawansa was not available for comment although many attempts were made to contact him. Although a text message was sent to him on Thursday seeking a comment against the allegations levelled against him, Weerawansa did not return the calls nor send a comment.