Home for the SLFEA at a 'price'

By Dilrukshi Handunnetti

Speculation is rife as to why the Sri Lanka Foreign Employment Agency (SLFEA), a subsidiary of the Sri Lanka Foreign Employment Bureau (SLFEB) is keen to purchase a new building as its office premises without following the stipulation of calling for tenders and ready to purchase it at an exorbitant  price of Rs. 62 million when the government valuation stands only at Rs. 42.5 million.

The Sunday Leader reliably learns that the groundwork has  already been prepared for the said purchase, and top sources from the Ministry of Foreign Employment said that the SLFEA has now been  requested to justify the reason for wanting to purchase a building at a higher value which is Rs.20 million more than the government valuation.

It is true that the SLFEA, a subsidiary of the SLFEB which is also the sole shareholder of the Agency has required and been looking for a suitable premises for a while. It is currently housed at a rented out premises at 100, Nawala Road, Narahenpita and pays a monthly rent of Rs. 140,000.

Ministry sources confirmed to The Sunday Leader that Minister of Foreign Employment Promotion and Welfare, Keheliya Rambukwella too has instructed the officials to look for suitable premises - but is apparently turning a blind eye to what is going on.

The catch

But now there is a catch - with the non-calling of tenders and the differences in the property valuation - so different are they that the private valuation is Rs. 20 million more than he government valuation, and the SLFEA is keen to settle on the higher price!

It is reliably learned that a former secretary of the ministry, Mrs. R.V. Nanayakkara has been instructed by the authorities to take the initiative in checking out suitable premises. She is a retired public servant now employed by the SLFEA as General Manager/Director, SLFEA, who is paid a salary and allowances exceeding Rs. 60, 000 which itself is a violation of government circulars governing the employment of retired public servants. The upper limit of payment in such instances would be, except in exceptional situations,  Rs.30,000 and no more.

Leaving that aside, what is significant here is that the Board had collectively set their hearts on a piece of property and has simply gone ahead with that decision despite tender stipulations.

The initial property valuation conducted by Additional Chief Valuer, R. W. M. S. B. Rajapakse stated that the property at present held a commercial market value of Rs. 42,500,000. This valuation was directed to the Sri Lankan Foreign Employment Agency (SLFEA) on September 24, 2008.

Next, an effort was made to get a private valuation of the same property, as the owner of the property was reluctant to sell the property for Rs. 42.5 million.

Owner unhappy

The argument was that the owner was unhappy at having to sell the property so cheap and the reason perhaps for seeking a fresh private valuation was a bid to appease the owner.

A private valuation was then conducted on the premises bearing assessment No: 12, Narahenpita Road, Nawala by valuer P. G. Walpita.

 This valuation report dated November 24, 2008  stated that the report was made at the request of the Accountant, Sri Lankan Foreign Employment Agency (Pvt) Limited for the purpose of ascertaining the present market value of the above property.

The stated date of inspection of the property was November 22, 2008.

Under the sub heading 'evidence of value' it is stated that 'readily buildable commercial sites in this locality transacted at rates ranging from Rs. 2,500,000 to Rs.3,000,000 per perch depending on factors affecting  the property market. A commercial site further down along Nawala Road has changed hands very recently at the rate of Rs. 3,000,000 per perch,' it stated.

Present value

Thus, in this valuation, a perch was valued at Rs. 3,000,000 totaling to Rs. 56,700,000 with the additional building of 2,694 sq feet at Rs. 3,500 per sq feet totaling to Rs. 9,429,000, a roof terrace of 470 sq ft at Rs. 1,500 per sq ft totaling to Rs. 705,000 and the present value of the premises coming up to a grand total of Rs. 66,129,000.

In his valuation, valuer Walpita concludes: "I am of the opinion that the present market value of this above property is Rs. 66,125,000 as at date, without restrictions in conveyance, devoid of defect in title easement, liens, servitudes, free of encumbrances from the ceiling on housing laws, LRC laws etc.'

It adds: 'In order to purchase the above property, the purchase price can be negotiated from Rs. 60,000,000 to Rs. 65,000,000 in the buyer's point of view.'

It is subsequent to this that a letter was presented to the Board of Directors under the title 'New premises for the SLFEA' dated December 18, 2008 bearing the signatures of Director Gamini Ekanayaka, Director Nimal Siriwardena and General Manager/ Director, Mrs. R. V. Nanayakkara, members of a special committee appointed to check on the said matter and to report to the Board.

Ideal location

In this explanatory note, the trio stated that the location of the proposed premises had a land extent of 18. 9 perches with a two storeyed newly built house with 2,694 sq ft and a roof terrace of 470 sq ft. It added the location to be ideal as it was situated in a commercial cum residential area in Nawala, adjoining the HNB bank.

"The government valuer has valued the property for Rs. 42.5 million. Since we could not convince the owner with this price, it is decided to revalue the property using the services of a private valuer," it adds, at a time when already a private valuation had been carried out by P. G. Walpita, a gentleman on the NSB valuation panel, the same bank the SLFEA intends approaching in order to raise a loan against its FDs.

The report adds that the SLFEA has looked for suitable places to relocate the SLFEA office but failed to find anything suitable.

'Even the owner of the building the SLFEA is currently occupying has quoted a price of Rs. 80 million, which seems not worthwhile for this 22 year old compact house with limited parking space,' it added, by way of justification for settling on a property with two extremely varying valuation reports.

The report adds that the SLFEA has no property of its own and it would be an asset to purchase a building of high value which will experience an enhanced market in the future.

A plum choice

The three-member report added that according to the valuer the readily buildable commercial sites in this locality transacted at the rates ranging from Rs. 2.5 million to Rs. 3.3 million per perch and provided a host of other facilities that made this building a plum choice.

Further, it noted that if the new premises were purchased, the monthly rental of Rs. 140,000 paid for the current office premises would be an additional saving to the SLFEA.

In Paragraph eight of the report, it importantly added: "The committee negotiated with Premathilake the owner of the property and finally he has agreed for a compromise and to bring down the price to Rs. 62 million. With this price, the value per perch has come down to Rs. 2.74 million, which is lower than the valuer's estimate of Rs. 3 million per perch."

The committee proposed to obtain a loan against the FDs available in NSB.

At the end of it all, a resolution was unanimously adopted at the SLFEA Board meeting to purchase the property for its business operations.

Chairman, SLFEA, N. M. Shaheid on December 26, 2008 wrote to Secretary, Ministry of Foreign Employment Promotion and Welfare in which it strangely declared the financial status of the organisation and that since its inception in 1996, it had steadily progressed with a sum of Rs.160 million in fixed deposits. It added that however, the SLFEA did not have a property of is own to house its office.

Ideally suited

Following the sub committee report, the SLFEA Board of Directors  recommended the purchase of the above mentioned property as it was 'ideally suited' and 'well located' for its business purposes. As such, the SLFEA has decided to purchase the property for Rs. 62 million following a unanimous decision.

It is now learned that despite the Board resolution and other relevant documents being submitted to the Ministry for approval, the top officials there are keeping their own counsel and are not too happy with the decision - with no tenders and in stark contrast to the government valuation just to appease  the owner to sell the property.

It is learned that the top officials at the Ministry now require the SLFEA to justify this decision to go ahead with the purchase.

With no tenders being called and the property hand picked, some raise the question as to whether there were no other properties for consideration that there was a need to overlook tender procedures and to have the property revalued by a private valuer to appease the seller. Over to you Minister Rambukwella!