The Cabinet has approved a revised agreement worth Rs. 25.58 billion with Maga Engineering (Pvt) Ltd to complete the remaining construction of Sethsiripaya Phase III, the government office complex at Battaramulla that has stood unfinished since work was suspended.
The decision was taken at Monday’s Cabinet meeting on a proposal by Transport, Highways and Urban Development Minister Bimal Rathnayake, and announced by Cabinet Spokesperson and Health Minister Dr. Nalinda Jayatissa at the weekly post-Cabinet briefing.
A project stalled since the crisis
The Urban Development Authority launched Sethsiripaya Phase III to meet demand for administrative office space across government and semi-government institutions. Its original estimated capital cost was Rs. 16.7 billion, with earlier Cabinet approval covering piling and the superstructure.
Construction began in 2021 and reached the completion of three floors before being suspended by mutual agreement. Daily FT reported that economic instability, material shortages, import restrictions and rising construction sector costs were behind the halt.
The government has since concluded that the office space is needed and the remaining work should be finished quickly.
What it now costs
The total project cost — covering spending to date, the work still to be done, other expenses and taxes — is now put at Rs. 38.48 billion, more than double the original estimate.
Maga Engineering, the original contractor, submitted a technical and financial proposal to finish the job without altering the project’s original scope. After evaluation by the variation review committee, the company agreed to complete the outstanding works for Rs. 22.76 billion. The Rs. 25.58 billion contract figure includes the value of work already completed and amounts payable; Daily FT reported that it excludes contingencies, taxes and daywork.
The scheme will be run as a development project with combined financing. Office space is to be allocated to the Ministry of Energy, the Inland Revenue Department, the State Pharmaceuticals Corporation and the Urban Development Authority, with each contributing in proportion to the space it takes.
