(Lanka-e-News- 05.Feb.2015, 2.00PM)
Dear Mr. Wasantha Samarasinghe - JVP,
We being a group of professional electrical engineers associated with Ceylon Electricity Board (CEB) would like to share few information with you. The reason we’ve selected you is simply that your comments against the present Power and Energy Minister regarding the recent salary increment of engineers in CEB.
We accept that this increment was approved on 7th Jan 2015 by the past government just before the presidential election to get an undue advantage. Same time we note that there was a pending salary increment to CEB engineers by that time. We have the same argument on the method this increment is given.
But we have a question on your approach of marketing this issue against the present Power and Energy Minister by neglecting his great attempts to clean the CEB while sweeping out the power mafia.
Below is one classic example of a power mafia destroying CEB day by day. We wonder why a party like JVP is keep their silence on this critics.
CEB, LTL Holdings (LTL Holdings) and LTL Projects (LTL Projects)
CEB has a subsidiary company called LTL Holdings (Pvt) Limited (LTL Holdings). LTL Holdings, formally known as Lanka Transformers Limited (LTL) has incorporated in 1980 with the fullest support of CEB. Main business lines of LTL are the manufacturing of distribution transformer to CEB, steel galvanizing and power producing by independent power plants. At present CEB has 63% of its shares. Balance 37% is ultimately owned by following ‘Three Culprits’. We will explain how it has happened.
Mr. U. D. Jayawardana (Chief Executive Officer of LTL Holdings)
Mr. M. J. M. N. Marikkar (Chief Operations Officer of LTL Holdings)
Mr. Ravindra K. Pitigalage (Chief Financial Officer of LTL Holdings)
Without any doubt and argument, LTL has done immense service to our national economy, engineering field and CEB. We don’t claim or takeout any credit belongs to LTL on this great service. But you didn’t give the licence to HE Mahinda to do whatever the thing he wish even he won the battle with LTTE. Similarly we couldn’t allow these ‘Three Culprits’ to do whatever the thing they wish and steel the public money.
Back to the story, in 1998, LTL formed its fully owned subsidiary, ‘LTL Projects (Pvt) Limited (LTL Projects)’ to grab the opportunities in power sector projects. LTL Projects shares were owned by LTL Holdings (Formally known as LTL), LTL ESOT Limited and aforesaid ‘Three Culprits’. And LTL ESOT Limited is owned by the ‘Three Culprits’. Finally equation of LTL Projects were minimized to Shares of LTL + Shares of ‘Three Culprits’.
At 2002, Minister of Power and Energy, Mr. Karu Jayasuriya tried to appoint Mr. Upul Jayasuriya as the Chairman of LTL. ‘Three Culprits’ shocked and formed an employee union to mitigate the threat and won the battle since the change proposed was a political appointment. But ‘Three Culprits’ realized that summer has an end. At that time CEB has 63% of LTL shares. 10% is owned by ABB and balance 27% is owned by Lanka Transformers Group Share Ownership Trust.
As Tsunami hits Sri Lanka in 2004, another Tsunami came to destroy the LTL tradition. ‘Three Culprits’ successfully managed to take out the LTL shares on LTL Projects. LTL favoured flavoured CEB officers shut their mouth there. Now LTL Projects is fully owned and controlled by ‘Three Culprits’ via their own firm LTL ESOT Limited.
And same time ABB informed CEB to buyout their 10% shares on LTL. Same LTL flavoured CEB officers said ‘Three Culprits’, “no money to buyout. If you have do it”. ‘Three Culprits’ took the ABB shares for LTL ESOT Limited. Now the LTL Holdings equation is 63% for CEB, 10% for ‘Three Culprits’ via their own firm LTL ESOT Limited and 27% for Lanka Transformers Group Share Ownership Trust.
Lanka Transformers Group Share Ownership Trust is consisted of equal shares from LTL Holdings employees. ‘Three Culprits’ began to remove thousands of LTL Holdings employees from labour to managers day by day. ‘Three Culprits’ created various stories, platforms and reasons them to resign by force or voluntarily. Now there are only about five employees remained at LTL Holdings. Most of the labour is hired for LTL Holdings works. And rest and management of LTL Holdings is paid by LTL Projects and other subsidiaries. The reason to remove most of the LTL Holdings employees is very clear. It’s just to grab the Lanka Transformers Group Share Ownership Trust only to ‘Three Culprits’. So, at present CEB has 63% of LTL Holdings shares. Balance 37% is ultimately owned by ‘Three Culprits’.
Main Frauds by ‘Three Culprits’
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‘Three Culprits’ formed a group with former Secretary to Ministry of Power and Energy, M. M. C. Ferdinando and Additional General Manager (Projects) of CEB, L. A. S. Fernando and execute billions of frauds through power and energy projects.
LTL Projects carryout the bulk of subcontracts for the main contracts acquired by Lakdhanavi Limited (Fully owned subsidiary of LTL Holdings). CEB should get returns on these projects through their share on LTL Holdings. But aforesaid five gangsters make frauds accounts to minimize CEB returns and grab on their pockets.
If a firm having direct relationship with CEB, that firm couldn’t participate for a tender floated by CEB and couldn’t execute a project for CEB as a contractor. LTL Projects is fully owned and controlled by ‘Three Culprits’. They are executive officers of LTL Holdings. 63% of LTL Holdings is owned by CEB. So, legally LTL Projects couldn’t participate for tenders floated by CEB and couldn’t execute any project for CEB as a contractor. But LTL Projects’ main business is Construction of Grid Substation and Transmission Line Projects for CEB.
Even though there are different faces in front operation framework of LTL Projects, ‘Three Culprits’ control every other thing at LTL Projects. Eng. H. D. Chaminda is the well-known Project Manager of LTL Projects who execute the Grid Substation Projects. Now he is the CEO of LTL Projects. Attached Annex 1 is an appointment letter given by CEO of LTL Holdings to Eng. H. D. Chaminda of LTL Projects. It’s clearly mention that he is appointed to execute CEB Transmission Substation Projects. How can a person worked for CEB owned company (LTL Holdings) manage and direct operations of a company worked as a contractor to CEB.
Son of L. A. S. Fernando (Additional General Manager (Projects) of CEB) is working for LTL Holdings as an Electrical Engineer under the supervision of Mr. M. J. M. N. Marikkar (Chief Operations Officer of LTL Holdings). You all may know that CEB Grid Substation Projects are directed by Additional General Manager (Projects) of CEB. So giving his son a job at LTL Holdings, Is it a bribe or just a “Kalaguna Salakamu” event.
Corruptions and Frauds done by well-educated elite group of so called professionals in the infrastructure sector in Sri Lanka within last few years is now a ‘Secret knows by everyone’. Former secretary to Ministry of Power and Energy, Former secretary to Ministry of Highways and Chairman of Ports Authority are the well-known engineers who lead this vulnerable culture from the front. As present Minister of Power and Energy says, current bribery commission has no power and technically qualified personnel to conduct investigations against these technical frauds, so need to form a special technical investigation unit.
Another nice argument made by these victims is ‘How we can fraud through internationally funded projects. Those are given by World Bank, ADB or JICA’. And we have seen in the following paras in the letter published by the former His Excellency President after the allegations made against him with his defeat. According to HE, it’s virtually impossible to fraud since there are so many parties involved. HE says,
“…My government carried out more development work in this country than any other government in post independence history. These unprecedented achievements were belittled in the eyes of the public during the presidential election campaign with the malicious propaganda that the costs of these infrastructure projects had been overpriced three to tenfold and huge kickbacks taken by politicians and officials in my government. The estimates for all infrastructure projects are made by Technical Evaluation Committees (TECs) made up of well qualified and reputed engineers.
The project is then evaluated by a cabinet appointed tender board which is made up of the most senior civil servants in the country. Every agreement signed with a foreign lending agency is vetted by the Attorney General and it has to receive final approval from the cabinet. Sri Lanka is now a middle income country and not entitled to development assistance. Therefore, my government used concessionary financing arrangements with the ADB, World Bank, and the Japanese, Chinese and Indian governments for the implementation of certain development projects. If the cost of a project is to be artificially inflated as some have alleged, there will have to be collusion between all the relevant bodies of the government, the international project consultants who design and supervise the project from start to finish, the contractor and the lending agency – a process involving scores of individuals and therefore virtually impossible.”
As professional engineers in Ceylon Electricity Board, we thought to give some evidences to show how to fraud through foreign funded projects by World Bank, ADB or JICA. We’ll describe below three projects funded by JICA.
Vavuniya Kilinochchi Transmission Project
Habarana Valachchenei Transmission Project
Greater Colombo Transmission and Distribution Loss Reduction Project
Above first project is already completed in 2012 and other two projects are not yet awarded. So at least now we can save some money to the country if react soon.
Vavuniya Kilinochchi Transmission Project (VKTP)
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This VKTP project is awarded to ‘Consortium of Mitsubishi Corporation and LTL Projects (MC & LTL Projects)’ for an amount of LKR 1,300 Mill.
There were only three bidders pre-qualified by TEC of CEB, Namely
MC & LTL Projects
Kinden Corporation, Japan
Viskus Corporation, Japan
There were only THREE key personnel involved with this. So, it’s very easy.
Mr. Mendis - DGM, Projects – CEB
Mr. Ferdinando – Former Secretary to Ministry of Power and Energy
Mr. Marikaar - COO of LTL Holdings
First Secretary of Ministry of Power and Energy and COO of LTL Holdings make the deal to grab the project and share the profit.
Then COO of LTL Holdings make to deal with DGM, Projects – CEB to grab the project on their name.
Then DGM, Projects instructs his TEC to select only the three Japanese bidders. JICA the funding agency is also very happy on this since whoever the winner, Japan gets some money back.
Then COO of LTL Holdings approach aforesaid three Japanese bidders and start negotiations to give a local offer to them.
Bidders also approaching DGM, Projects – CEB and Secretary to Ministry of Power and Energy to get help on qualifying. They also recommend LTL Holdings as the local party.
Now COO of LTL Holdings decide the bidder they can get the more advantage. They decide to go with MC.
Now the game begins. CEB has 63% shares on LTL Holdings. Legally if some firm having legal relationship with CEB, that firm couldn’t participate for a tender floated by CEB. So, on top LTL Projects can participate for CEB tenders. But if so, legally these ‘Three Culprits’ can't be worked as CEO, COO and CFO of LTL Holdings.
Now LTL Projects make a consortium agreement with MC, Japan and submitted highly increased bid price for LKR 1,300 Mill.
Meantime LTL Holdings acted as subcontractor of other two Japanese bidders and gave them a higher price than above. So, MC+LTL Projects got the project.
Since LTL Holdings were recommended by DGM, Projects – CEB and Secretary to Ministry of Power and Energy, these two Japanese bidders didn’t have any doubt on their mind. But since the LTL Holdings management control the LTL Project, they successfully manipulate the tender.
Comparing a same type of project done at Chunnakam, you can see the amount of money they have stolen.
Project VKTP CARDP
Location Kilinochchi Chunnakam
Scope 2 nos. of 132/33 kV TF 2 nos. of 132/33 kV TF
4 nos. of 132 kV feeders 4 nos. of 132 kV feeders
8 nos. of 33 kV feeders 8 nos. of 33 kV feeders
Contract Amount LKR 1,300 Mill. LKR 650 Mill.
Year 2008-10 2010-12
Habarana Valachchenei Transmission Project (HVTP)
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This HVTP project is going to be awarded to the ‘Consortium of Mitsubishi Corporation and LTL Projects (MC & LTL Projects)’.
Same parties as above has been pre-qualified by TEC of CEB, Only difference is Kinden Corporation, Japan and Viskus Corporation, Japan came as a consortium.
MC & LTL Projects bid price is LKR 800 Mill greater than the Kinden & Viskus price.
But working on same method as earlier former Secretary to Ministry of Power and Energy and former AGM – Projects of CEB tried to disqualify Kinden & Viskus and try to award the contract to MC & LTL Projects.
There were only THREE key personnel involved with this too. So, it’s very easy again.
Mr. L A S Fernando – Former AGM, Projects – CEB
Mr. Ferdinando – Former Secretary to Ministry of Power and Energy
Mr. Marikaar - COO of LTL Holdings
Greater Colombo Transmission and Distribution Loss Reduction Project
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There were seven bidders participated for this pre qualifications.
MC & LTL Projects
Kinden & Viskus
Siemens, Germany + India
ABB, Germany + India
Pestech, Malaysia
One Arabian firm
One Korean firm
Now again everything is set to do as previous tenders. Mr. L A S Fernando – Former AGM, Projects – CEB, Mr. Ferdinando – Former Secretary to Ministry of Power and Energy and Mr. Marikaar - COO of LTL Holdings made the plan before the presidential election to eliminate the other five bidders and qualify only the two Japanese parties.
And again finally they will disqualify Kinden & Viskus and get the project to MC & LTL Projects.
Now it’s high time for CEB engineers to come up and raise their hand against the corruptions done by these CEB paid thieves. So, we are ready to support you to disclose the power mafia by these so called elite people in the society. Please show us your willingness by followings.
Remove Mr. U. D. Jayawardana (Chief Executive Officer of LTL Holdings), Mr. M. J. M. N. Marikkar (Chief Operations Officer of LTL Holdings) and Mr. Ravindra K. Pitigalage (Chief Financial Officer of LTL Holdings) from the positions in LTL Holdings.
Suspend the CEB projects executed by LTL Projects or CEB projects awarded to LTL Projects immediately.
-By Group of Electrical Engineers - CEB-
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by (2015-02-05 08:43:37)
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3 discussion on this news
but the writer forget that Mr. L.A.S Fernando was only a DGM until May- 2012 and worked as DGN Trans. operation & maintenance. how can it possible to act such person as AGM Projects at that time.
-- by gallant dino on 2015-02-07
Allegations made in above article are totally false and it is a complete distortion of information. We, engineers of LTL Projects, vehemently reject those baseless allegations. Article has been published with a clear vested interest. Writer’s main demand is to stop/prevent awarding of contracts to LTL Projects (Pvt) Limited and thereby destroy LTL Projects. We wish to inform readers that the LTL Projects (Pvt) Limited is the ONLY SRI LANKAN COMPANY who is qualified to carry out subject projects. In case, LTL Projects is prevented from participating from those projects, all contracts will be awarded to FOREIGN COMPANIES only.
All the projects awarded to LTL Project s have been awarded following a competitive bidding process and in every circumstance, LTL Projects’ bid was the cheapest one and all other competitors were foreign companies.
Writer has quoted 4 selected projects; two completed ones (one by LTL Projects and one by an Indian Company), one tender under evaluation and another tender where even pre-qualification stage is not yet finished. Further, out of 4 projects, only VKTP project have been executed by LTL Projects. VKTP project was awarded to LTL Projects since their offer was the cheapest. VKTP-CARDP project was awarded to an Indian company since they were 5% (LKR 20million) cheaper than LTL project. But writer has just put two contract prices of two different projects alongside to give a wrong impression to readers.
There are so many other contracts to talk about. In several other occasions, LTL Projects have been awarded contracts and those were executed and completed successfully. Two examples are Clean Energy and Access Improvement Project – Part 6 (CEAIP-Part 6) and Augmentation of Grid Substation for Absorption of Renewable Energy Project – Lot A (AGSAREP – Lot A); both projects were awarded to LTL Projects since LTL Projects’ bid was the cheapest in each occasion and the other competitors were Indian companies.
LTL Project is executing 6 more projects at this moment; in all of those projects, LTL projects’ bids were the cheapest and there were more than 15 competitors from India, Malaysia, China, Korea, Japan and Austria etc. who were more expensive than LTL Projects. There are 2 other similar projects being executed by two foreign companies (one Indian and one Korean).
If LTL Projects is prevented from bidding as writer suggested, all projects would have gone to foreign contractors at a higher price and entire contract money will flow away from the country. There are some local agents of foreign competitors and their well-wishers who want to prevent LTL Projects from bidding at any cost. Only intention of those who go against LTL Projects is to get some benefit from agents of foreign competitors. Otherwise, there is no any truth at all in the allegations made.
Information on employees’ trust has also been presented in a distorted manner with vested interest to confuse reader. With respect to employees trust, we wish to hereby inform that neither any employee nor any trustee own shares. We believe that writer has mentioned their names with ill interest to disgrace and tarnish their reputation and the image.
Engineers of LTL Projects (Pvt) Limited
-- by LTL Projects on 2015-02-08
Well written document. Where it will go from here? Could new regime of CEB take it to higher level??
-- by EdMan on 2015-03-06
