A multi-million rupee procurement process to modernise passenger bus halts and billboards in Colombo on a public-private partnership basis has stalled following serious administrative and legal irregularities.
Under tender ME/ME/ML/34/2025, the Colombo Municipal Council (CMC) planned a four-year project to renovate 128 bus halts and 250 billboards while constructing 20 new bus halts and 20 billboards.
However, controversy surrounding the initial award forced municipal authorities to cancel the contract and call for fresh bids, sparking intense concern among procurement experts.
Price formula discrepancy and shift in position
Disagreements over project valuation surfaced shortly after municipal officials issued a Letter of Award on 7 July 2026 to a joint venture comprising Emerging Media (Pvt) Ltd and Hammer BTL (Pvt) Ltd.
Addendum 1 of the tender document mandated that bidders add ground rent to the minimum annual value set by the CMC.
The joint venture later claimed its Rs. 75,750,000 bid covered all mandatory fees, whereas CMC calculations placed the required total at Rs. 102,948,500.
Attempting to reduce agreed prices after winning an award violates standard bidding rules and undermines procurement discipline.
Is a bid bond of Rs. 500,000 sufficient?
Industry analysts have questioned the overall commercial design of the tender, particularly the low bid bond requirement. Despite the total project value exceeding Rs. 400 million, authorities set the bid bond at just Rs. 500,000.
Standard national procurement guidelines recommend setting bid securities at roughly one percent of estimated project value.
Observers note that setting an abnormally low security threshold may have discouraged established investors from competing while exposing the council to financial default.
Finance Committee intervention and legal contradictions
Controversy escalated on 13 August when the Standing Committee on Finance submitted its recommendations to the CMC.
The committee reported that the defaulting joint venture could bid in the upcoming re-tender because the firm had not undergone official blacklisting, despite failing to furnish a performance bond within seven days.
This recommendation directly contradicts Clause 10.1(2) of the municipal tender guidelines, which explicitly disqualifies any entity that directly or indirectly fails to execute a previous council contract.
Urban infrastructure and the future of PPP projects
Bus stops serve as critical daily infrastructure for thousands of commuters across the capital.
Mismanaged procurement procedures, commercial oversights, and questionable committee interventions have deprived the municipal council of vital revenue while delaying modern facilities for the public.
Failing to resolve these administrative flaws risks delaying future urban transport initiatives and harming ordinary passengers across Colombo.
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