Link Engineering filed a case in the commercial high courts, Colombo (CHCC) against termination of a contract and obtained an interim injunction against encashment of the performance and advance bonds provided by BOC corporate branch Colombo by their Client University of Ruhuna (Case No CHC/03/2020/MR).
In this case a contract was awarded by the University of Ruhuna (UOR) to Link Engineering Pvt Ltd to build an academic building with 12 floors. The building has two 300 seat lecture halls, two 300 seat capacity multipurpose halls for examinations, student canteen, 24 tutorial rooms, 6 large space laboratories, research laboratory, and purpose designed skills laboratory with an underground car park.
Although the contract was awarded in 2017 to be completed by November 2019, Link Engineering did not even complete the foundation.
According to the submissions in the CHCC by the UOR, the case was complicated by construction quality issues as a result of a subcontract for piling awarded to a company not registered with ICTAD to construct piles which resulted in pile test failures. UOR terminated the contract and awarded it to Central Engineering Construction Bureau (CECB) with the approval of the Cabinet on 2020.5.6 and now the building has gone up to the seventh floor.
In this process, the foundation had to be strengthened with the advice of technical experts in structural Engineering from the University of Moratuwa and design consultants at an extra cost of 95.26 million rupees. With the delay of substructure, the shoring system had to be strengthened at an extra cost of 18.57 million rupees. The total of 113.83 million rupees of extra cost was spent by the university.
Link engineering was able to get an interim injunction against the encashment of advance and performance bonds citing unfair termination after the contract period ended in November 2019.
The interim injunction granted was dismissed by the Judge of the CHCC in the verdict delivered on October 25, 2022. UOR immediately claimed the bonds were worth Rs. 197 million. DSG Milinda Pathirana PC appeared for UOR. The loss to the University and the country in this case is unprecedented and cannot be calculated in monetary terms, as the plan by the Faculty of Medicine UOR was to increase the intake into the Faculty of Medicine up to 300 which could not be done yet due to absence of the planned facilities by early 2020. As a direct result at least 100 students could not enter the medicine stream from 2020 and consequently same numbers missing dental, agriculture, veterinary science and bio science streams in the same sequence in the University Grant Commission managed university admission system.
This would not only delay the filling of the medical officer cadre in the Ministry of Health for years. Construction costs have escalated drastically making it almost impossible to complete the scope of the building within the Cabinet approved budget in 2020. Hence, the costs of lost opportunities and escalation of prices cannot be even imagined in the current context.