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| Sunday, 27 June 2004 |
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| News Business Features Editorial
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Government loses Rs. 25.5m in questionable deal by Anura Maitipe The government has lost Rs. 25.5 million following an irregular deal of a lease of a building for five years at Vauxhall street, Colombo that involved former Trade and Consumer Affairs Minister Ravi Karunanayake. While the government valuer recommended a monthly rental of Rs. 1 million, the premises had been rented out by the Ministry for a monthly rent of Rs. 1,425,000, statistics indicated. Official sources said that it is surprising that there was a single bidder to this transaction that had violated all tender procedure norms. When the Ministry had called for tenders, A.L.M. Hanas had bided to lease out his building located at 234, Vauxhall street Colombo 2. According to State tender procedures, quotations should have been received by the Chairman of the Ministry Tender Board but in a surprise move, the bidder had sent his bid directly to Minister Karunanayake stating that the Ministry could make outright purchase of the building at Rs. 130 million or lease out at Rs. 47.50 a square foot. The ministry had quickly responded to this proposal and rented out the building at No. 234 Vauxhall street for sum of Rs. 1,425,000 per month as suggested by the owner ignoring the recommendation of the government valuer. According to procedures the Tender Board should refer it to the tender evaluation committee for its recommendation. But in this particular deal no tender evaluation committee had been appointed. Under normal procedure when there is a single bidder the Tender Board requests him to negotiate a price below the rate fixed by the government valuer. In this deal the Ministry officials not followed the set guidelines in State tender procedures. According to State tender procedures if a Ministry wants either to purchase or rent a building that exceeds quantum stipulated to the Ministry Tender Board the Ministry has to obtain approval from the Treasury prior to floating of the tender. Sources said all accepted procedures had been violated in this deal that looked suspicious. |
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