A directive by the Director General, Technical of the Ministry of Transport to the General Manager of Railways to terminate an agreement on the local renovation of train compartments is likely to lead to a loss of Rs.5,200 million to the Government, Railways sources said.
Before this directive was issued, the local company Tantri had saved foreign exchange amounting to Rs. 42,500 million by renovating and rebuilding train compartments locally for over four years.
Tantri completely overhauled 200 train compartments at a cost of Rs. 12 million per compartment, and had been contracted to renovate another 100 train compartments.
Of that, Tantri has undertaken to fully repair 50 compartments and the company has requested to increase the price given for compartment repairs due to exchange rate fluctuations.
The Cabinet paper submitted under No. MT/112/2022 dated 20.12.2022 by the Minister of Transport, Highways and Mass Media Dr. Bandula Gunawardena to provide Rs. 21 million for
the full repair of one compartment has received Cabinet approval. President Ranil Wickremesinghe had approved it as the Minister of Finance - reference number PFD/PMD/CM/2022/TRA/03/362 dated 14.01.2023.
However, the Director General, Technical of the Ministry of Transport has sent a letter dated 23.2.2023 to the General Manager of Railways to stop this project which had been approved by the President as the Minister of Finance and the Cabinet, without the knowledge of the Minister in charge of the subject.
At this point, only 21 out of 50 carriages had been repaired.
The letter:
“My number - MT/11/01/01/05
Railway General Manager,
Department of Railways.
Execution of Large Scale Repairs of railway carriages by Tantri - SRS/F 7352
In relation to the said matter, the project director of the project referred to the Secretary of the Ministry of Transport and Highways No.SRS - F 7352 and the letter dated 14/02/2023 is attached.
Accordingly, permission has been given under the following conditions to continue the work of the project up to 31/12/2023 within the limits of the allocation received.
* Completion of the project after repairing these 23 compartments by 31/12/2023 considering the ongoing financial crisis of the Government.
* From the year 2024, the Railway Department will carry out the renovation and modernisation of the railway compartment at the Ratmalana factory as per the operational requirements and prepare suitable programs and inform the Ministry.
* Completing this project by 31/12/2023 and carrying out activities to take over the relevant buildings and land back to the Railway Department.
* Preparation of programs so that these buildings can be used for compartment maintenance and painting work under the Dematagoda Powerset Unit from 2024.
J.I.D. Jayasundara
Director General (Technical)
Ministry of Transport and Highways
On behalf of Secretary
(End of quote)
Copies of the letter have also been forwarded to the Office of the Chief Mechanical Engineer, Ratmalana, Chief Financial Officer - Railway Department, Chief Engineer, Powerset and Chief Engineer, Roads and Industries.
At present, according to world market prices, if a third class train compartment is imported from India, a compartment will cost Rs.162 million (one compartment is about Rs. 180 million including shipping charges, Customs charges and port charges). If the same compartment is procured from China, the cost of a compartment would be nearly Rs. 233 million.
As a result, the Government has to bear a huge cost to import new train compartments through this breach of contract with a local business, which fully repairs a train compartment for only Rs.21 million and provides a two-year warranty.
Many trains have been cancelled due to an insufficient number of compartments, and many trains and suburban trains that ran from Colombo to Talaimannar, Matale and Beliatta have been cancelled.
Tantri has also submitted a proposal related to a project to produce a powerset with three compartments locally through which the Government can save a lot of money.