Cabinet approves Rs.25.6bn deal to complete Sethsiripaya III

Cabinet approval was granted to complete the remaining construction work of the Sethsiripaya Stage III project, which was initiated to fulfil administrative office space requirements for government and semi-government institutions.

The initial estimated total capital expenditure for this project, commenced by the Urban Development Authority, stood at Rs. 16.7 billion.

Construction work on the project commenced in 2021, and construction was carried out until three storeys were completed.

However, the project was temporarily suspended on mutual agreement due to economic instability in the country, raw material shortages, import restrictions, and rising prices in the construction sector.

Considering the existing requirement for office facilities in government and semi-government institutions, a decision was taken to expedite the remaining work of the project.

Accordingly, the project is proposed to be implemented as a joint-financed development project, with plans for proportional financial contributions from the Ministry of Energy, Department of Inland Revenue, State Pharmaceuticals Corporation, and Urban Development Authority, to which office space is to be allocated.

The estimated total cost of the project, including costs incurred so far, funds required for remaining construction, other expenses, and taxes, is calculated at Rs. 38.48 billion.

Meanwhile, M/s Maga Engineering (Pvt) Ltd, the original construction contractor of the project, submitted a technical and financial proposal to complete the remaining work without affecting the original project scope.

Following evaluation of the proposal by the Variation Review Committee, the contractor agreed to complete the remaining construction work for an amount of Rs. 22.76 billion.

Accordingly, the Cabinet approved the proposal presented by the Minister of Transport, Highways and Urban Development to enter into a revised agreement with M/s Maga Engineering (Pvt) Ltd for an amount of 25.58 billion rupees, including the value of completed work and outstanding payments to be settled.