By The Pulseline News Desk
The Road Development Authority (RDA) has reportedly re-advertised the first phase of the Central Expressway Project Section 4 (CEP 4 Phase 1), with the estimated cost of the 38.5-kilometre project reduced by around 20 percent to Rs. 190.855 billion.
The project, which will connect Galewela and Dambulla, was initially estimated at Rs. 235.529 billion. The revised estimate reportedly represents a reduction of approximately Rs. 44.674 billion.
The decision to re-advertise the project has followed a review of the original cost estimates and major revisions to the tender documents.
Under the revised tender conditions, bidders are to be given a minimum of 21 days from the date of republication to submit their bids, allowing additional time to consider the changes introduced to the procurement documents.
CEP 4 Phase 1 has been divided into 12 packages and will be financed through Government funds.
The second phase of Section 4, covering the Kurunegala-Galewela stretch, has not yet been advertised.
Why the estimate was reduced
According to reports, the original RDA engineer’s estimate was based partly on average bid prices submitted by contractors for CEP 3 Phase 2, which covers the Rambukkana-Galagedara section.
The estimate has also incorporated price escalation between January and May this year, together with a further adjustment intended to reflect prevailing market conditions.
However, the Bid Evaluation Committee (BEC) and the Ministry of Transport, Highways and Urban Development have raised concerns over the use of CEP 3 Phase 2 bid prices as the basis for the new project.
According to the BEC report released last week, the bids submitted for CEP 3 Phase 2 were approximately 20 percent higher than the original estimates because of construction challenges specific to that project.
Using those higher rates as a benchmark for CEP 4, particularly after applying further price escalation, is expected to result in an inflated estimate and reduce competition among potential bidders, according to the BEC.
The committee has therefore recommended that the average contractor bid rates for CEP 3 Phase 2 be used after removing the relevant escalation component.
The recommendation has resulted in the substantial downward revision of the estimated cost for CEP 4 Phase 1.
An engineer’s estimate has served as the baseline for a major construction project, allowing the project owner to assess whether bids submitted by contractors are reasonable and reflect prevailing construction costs.
Tighter financial requirements for bidders
The revised tender process will reportedly introduce stricter requirements regarding the financial capacity of contractors.
The BEC has recommended a new provision preventing bidders from relying on the entire amount of an available bank credit line to demonstrate that they have sufficient financial resources to undertake the project.
Under the proposed condition, contractors will need to demonstrate substantial working capital in addition to access to credit facilities.
The move is intended to ensure that successful bidders have adequate liquid resources to meet project expenses and maintain construction activities without relying entirely on borrowed funds.
The re-advertisement of CEP 4 Phase 1 comes as the Government seeks to move ahead with major infrastructure projects while exercising greater scrutiny over construction costs and procurement.
With the revised estimate cutting almost Rs. 45 billion from the previous projection, the bidding process will now be closely watched to determine whether the revised approach succeeds in attracting competitive offers while ensuring that the project can be delivered within the new cost framework.
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