Gin- Nilwala Diversion Project

What was the loss?

Rs. 4 billion


The contract for the project was awarded by the Government to the China-based CMAC Engineering Company, without calling for any tenders. The project contractor was selected bypassing all government procurement regulations. The transparency of these transactions is questionable as all related payments have been made in a hurry, before January 8, 2015. Transactions related to this project are said to have taken place in a rushed manner prior to 8th January, 2015, with payments in three instalments. The first payment of Rs. 1,000 million was made on the 24th of November 2014, the second payment of Rs. 2,009 million on the 1st of January 2015 and the third payment of Rs. 1,003 million on the 6th of January 2015. However, the financial allocation initially made for the project in 2015 was just Rs. 40 million.[1] There is a huge gap of information regarding this issue after this revelation in 2017.

In early 2021, a controversy started on social media, following a statement[2] by the current Minister of Irrigation, Mr. Chamal Rajapaksa regarding the construction of a storage reservoir of 5 hectares in the World Heritage Sinharaja Forest Reserve under this project.

What is the corruption?

  • Alleged misappropriation of government funds
  • Entertainment of unsolicited tenders
  • Manipulation of tender procedure
  • Abuse of power to bypass government procurement regulations
  • Lack of transparency

Even though such a massive amount of money has been paid for the construction work of the Gin-Nilwala Diversion Project, the project has not even been initiated. The project is still identified as an on-going project in the official website of the Ministry of Irrigation.[3]

 Who were the victims?

  • The general public

When the government pays excessive amounts of money for goods, services or works that are not delivered, money is diverted from other projects that could address critical needs and benefit the people.

What has been done?

  • Under the 2015-2019 government, the new Secretary to the Ministry of Irrigation informed the CAMC Engineering Company, to repay the full amount to the Government of Sri Lanka until the project is initiated. This request was rejected by the company.
  • The police Financial Crimes Investigation Division initiated an investigation and the Colombo Magistrate’s Court issued a warrant for the arrest of the former Secretary to the Ministry of Irrigation, Mr. K.W. Ivan de Silva, who reportedly influenced the payments. However, the former Secretary is now reported to be residing in New Zealand, and no further details are available in the media regarding the case.
  • TISL filed a Right to Information request with the Ministry of Irrigation requesting Memorandum of Agreements, feasibility reports, Cabinet Memorandums, evaluation reports, procurement committee decisions, environmental impact assessment and other related documentation regarding the project.
  • The JVP has also raised concerns about the Gin-Nilwala diversion project and the connection of Thirukumar Nadesan to the project, alleging that there have been fund transfers in millions between bank accounts of CMAC Engineering Company and a foreign company called Red Ruth Investment Ltd. in Hong Kong under the name of Thirukumar Nadesan (Husband of former Deputy Minister Nirupama Rajapakse).[4]

What can be done?

  • Demand investigations into the loss of public funds caused by public officials or representatives through this contract.
  • Advocate for the Government to pursue legal action against the company contracted for the project, for breach of contract.
  • Demand investigations by CIABOC into the allegations made regarding the kickback/ bribery involving Mr. Thirukumar Nadesan, who was also implicated in the recently revealed Pandora Papers.
  • Demand investigations by the Parliamentary Oversight Committees like COPA and COPF into the large-scale misappropriation of public funds.