CEB: Breach of contract costs the public dear 

By Ifham Nizam-January 26, 2014

The CEB management has paid a construction consulting firm close to Rs. 35 million in damages.

CEB awarded the firm a contract to built its new head office at Narahenpita in 2009 in keeping with the government tender procedure.

The consultants proceeded with their work until the CEB directorate changed in late May 2010 with the appointment of Power and Energy Minister Champika Ranawaka. The General Manager of CEB at the time, Badra Jayaweera was ordered by the new Chairman to terminate the consulting contract with the firm in question and award it to a private company affiliated to the University of Moratuwa.

However, she refused to terminate the contract without a valid reason. The Chairman then took a unilateral decision to terminate the existing consulting contract and award a new contract to the firm associated with the Moratuwa University.

When the original consultants challenged the termination of the contract, an arbitration panel awarded them approximately Rs. 35 million which, according to CEB sources, is significantly greater than the balance payment due to the consultant on the original contract.

The CEB, having paid the amount, has now asked its Internal Audit Department to conduct an inquiry. CEB unions said that it was only an attempt to confuse everyone as it was obvious who should be held responsible for the costly blunder. The work on the project has got delayed.

The piling was completed even before the building design had been finalised, at a cost of Rs. 300 million. The CEB has now been forced to modify the design to match the piling.