I am already on record saying that the present NPP cabinet is probably the most honest cabinet there has been in my lifetime. But today’s story shows what might be the first signs, the first cracks of corruption creeping into the system. The government would do well to stamp this out at the very outset if it is to avoid the ignominious fate of its predecessors.
Take, for example, the case of Mr Duminda Hulangamuwa, who serves as Senior Economic Advisor to the President. According to his own LinkedIn page, he also serves as the managing partner of Ernst & Young. To me, this smacks of a conflict of interest.
Ernst & Young, or EY as it is now known, offers financial advisory services to a number of well-heeled clients in Sri Lanka, including the government. But as Senior Advisor to the President, Mr Hulangamuwa has unfettered access to inside information from the government, from the Ministry of Finance and so on, and wields disproportionate influence over economic policy. That is the very definition of a conflict of interest.
Then there is the case of Sarath Ganegoda, who is a Senior Executive Director on the board of Hayleys, which is one of Sri Lanka’s largest corporates. Mr Ganegoda also serves as Chairman of SriLankan Airlines. In fact, his was among the first appointments made after AKD won the presidential election last September.
So, it is safe to conclude that Mr Ganegoda has very close ties to the NPP. Now here’s the rub. Just last year, Hayleys was a bidder to purchase SriLankan Airlines.
Hayleys is also a major player in the air travel industry. So, there is a massive conflict of interest in Mr Ganegoda serving as Chairman of SriLankan Airlines on the one hand, while also being an Executive Director of Hayleys on the other. If nothing else, this advertises the fact that Mr Ganegoda is closely associated with the NPP, and this, in turn, could result in Hayleys receiving preferential treatment by, for example, government tender boards.
Take, for instance, the recent mysterious award of a 50-megawatt wind power project in Mannar to Hayleys. Bids for this two-envelope tender closed on 9th May 2024. The procedure in such two-envelope tenders is that the first envelope, which contains the technical details, is opened and evaluated first.
Bidders who don’t conform to the technical aspects are then simply eliminated. Thereafter, the financial proposals of the tenderers who passed the technical evaluation are opened and the contract is awarded to the lowest bidder. Very straightforward.
But when the technical proposals were opened in May last year, it was found that the bid guarantee that Hayleys had submitted was seriously flawed. A long story, take my word for it. This is a major deviation, and their offer was therefore rejected without further consideration.
Then, when the second envelopes were opened, it was found that the lowest technically compliant bid had been submitted by another company, called Windforce. So quite rightly, the project committee recommended that the award be made to them. Hayleys appealed this decision to the Procurement Appeals Board, which, despite Hayleys’ obvious non-compliance with the tender specifications, directed that the Cabinet-appointed Negotiating Committee should treat their bid as compliant.
The project committee, however, stood its ground and refused to comply. It rejected the recommendation of the Appeals Board and gave detailed reasons for its rejection of Hayleys’ offer. Notwithstanding that, the Negotiating Committee chose deliberately to override the recommendation of the project committee and accept Hayleys’ offer despite the fact that it deviated significantly – seriously – from the conditions of the tender.
By doing so, the government made a joke of the two-envelope procurement system, which is considered the gold standard of procurement worldwide. Where is the transparency that the NPP talked so much about when they asked us for our votes last year? Interestingly, the Negotiating Committee didn’t even seek a legal opinion from the Attorney General on whether the project committee’s interpretation of the bid guarantee was flawed. Instead, they played the part of the Attorney General and decided that this legal interpretation was correct on their own, in favour of Hayleys.
To me, that smells a trifle fishy. I am left wondering whether the Negotiating Committee may have been swayed by the fact that a senior executive director of the Hayleys board happens to be, manifestly, very closely aligned with the governing party. Now, don’t get me wrong, I don’t know them personally.
But from all I hear, Sarath Ganegoda and Duminda Hulangamuwa are decent, honest, and honourable individuals. I have nothing against their appointments. I only contest their conflict of interest.
Because they are involved in a major conflict of interest, which to some may appear tantamount to corruption. As the old saying goes, you can’t run with the hare and hunt with the hounds at the same time. These two gentlemen need to pick a side.
Any side. Other senior NPP appointments, by contrast, have been patently transparent. Take, for example, CEB Chairman Dr Thilak C. M. Balapitiya and Chief Advisor to the President on Digital Economy, Dr Hans Vijay Surya.
They have publicly declared that they distance themselves entirely from their competing private sector interests before accepting their government appointments. That is laudable, and that is exactly how it should be. But not so Sarath Ganegoda and Duminda Hulangamuwa.
This is worrying. The NPP came into office claiming that it would be squeaky clean. Well, I am beginning to wonder whether the squeak is very awful.
