Press briefing of Cabinet Decision taken on 2016-12-06

Appointment of a Ministerial Sub-Committee to investigate into the implementation of Gin-Nilwala Diversion Project

- The implementation of the Gin-Nilwala Diversion Project has commenced with the approval of the Cabinet in the year 2014. Accordingly, the Engineering, Procurement and Construction contract for the implementation of the Gin-Nilwala Diversion Project has been awarded to a Chinese Company, at a cost of US$ 696 Million. However, the project had not got off ground since the conditions relating to the Loan Agreement with the Chinese Export and Import Bank had not been finalized. Therefore, the proposal made by Hon. Ravi Karunanayake, the Minister of Finance, to appoint a Ministerial Sub-Committee and an Officials' Committee comprising of Senior Officials to assist the Sub-Committee, to make an investigation on the following matters relevant to the project, was approved by the Cabinet.

* Whether the contract Agreement can be implemented without any additional cost to the Government;

* Assess the negative impact and costs if one party wants to terminate the Agreement, unilaterally;

* Whether the officials associated with the project have violated any financial regulations, government procedures and circular instructions; and

* How to recover the advance payment without any adverse implications.