By Nirmala Kannangara
Blatantly disregarding government tender regulations,
the Rajapaksa regime has once again allowed nepotism to
reign in a multi-million-dollar scandal centring on an
IT-related contract. It is alleged that the Samsung
Corporation was awarded the contract simply because the
Sri Lankan agent of the Korean company is a relative of
the First Lady, Shiranthi Rajapaksa.
Details have surfaced as to how the cabinet bypassed
tender procedures and offered a multi-million-dollar
tender to Samsung Corporation to implement the E-Sri
Lanka Government Network, a brainchild of President
order to bring all government institutions under a
single computer network, the cabinet on July 6, 2005
approved a US $ 15 million loan from the Korean Import
and Export Bank on the condition of offering the project
to a Korean company.
Korean companies – Korea Telecom and Samsung — submitted
bids for the project. On a government recommendation,
Samsung, the highest bidder, was awarded the tender by
the cabinet on July 5, 2006, sidelining the less
expensive bid by Korea Telecom.
August 2006, a US $14.8 million contract was signed
between the Information and Communication Technology
Agency (ICTA), which comes under the purview of
President Rajapaksa, and the ASSET Network – the Sri
Lankan agent for Samsung.
President Rajapaksa signed the contract on behalf of the
ICTA, while Chief Executive Officer (CEO) Dilshan
Wickremasinghe of ASSET Network signed it on behalf of
Samsung (see box for a copy of the agreement).
Wickremasinghe, it has been learnt, happens to be the
nephew of Shiranthi Rajapaksa.
contract was offered for procurement of the design,
supply, installation and operation of E- Sri Lanka
Government Network, but questions have been raised about
whether the contractors have honoured the agreement.
Sunday Leader is in possession of details about
low-quality equipment that was imported for the project.
The government lost money because the same items could
have been purchased from Sri Lanka at a lower price.
local government institutions expressed their concern to
the ICTA about the significant problems they have had
to face due to the use of low-quality IT products. The
expensive low-quality equipment was imported on tax-free
the imported equipment were 123 central UPS’ at a rate
of US $1598.29 each, when a better product could have
been purchased at a rate of US $800 on the local market.
A total of 3225 Celeron PCs were imported at a cost of
US $1394.19 per computer, whilst the same product would
have cost between US $350 to $450 in the local market.
325 IPG Hard Drives were imported at a cost of US
$1175.19 each, when the cost in Sri Lanka for a single
unit would have been around US $ 350. And although the
ASSET Network purchased 325 HP Scanjet 8200s at a rate
of US $519 each, the local price per unit was US$ 254.
alleged fraud has reportedly cost the country a colossal
US $3.5 million, or around Rs. 400 million.
Meanwhile, The Sunday Leader has learned that the ASSET
Network installed low-quality XP Home Edition software
instead of the more sophisticated Windows XP
Professional. The imported UPS and Routers are also not
up to the required standard. And although 325 Celeron
PCs have been imported for the above project, the
equipment was un-branded, thereby violating the rules
and regulations of the contract.
the contract, the ICTA only has to pay the ASSET Network
after proper assessment of the equipment. However, the
ICTA failed to carry out a full assessment before making
the full payment.
“Although the contractors had to store excess spare
parts for future repairs, the ASSET Network had not
stored the required spare parts and have also failed to
take immediate action to attend on breakdowns which have
left government institutions in a quandary,” according
to documents in the possession of The Sunday Leader.
letter to the ICTA on September 10, 2007, Rideemaliyadda
Divisional Secretary J.C. Ranepura wrote that due to
low-quality UPS units, computers have failed to start up
and there have even been problems with the mouse.
Continuous attempts made by Ranepura to contact the
appropriate help desks for assistance failed.
letter dated September 7, 2007, Galagedara Divisional
Secretary of the Thumpane W.M.K.K. Karunaratne, said
that the equipment provided to them under the E-Sri
Lanka Government Network project continues to give
The Sunday Leader contacted ASSET Network CEO Dilshan
Wickremasinghe to ask about these allegations, he
declined to comment.