Concerns raised over railway smart card deal

By Indika Sri Aravinda

Despite a local company having bid to install a smart card system at railway stations, the Government has decided to go ahead with a more costly deal with a Chinese company, Colombo Gazette learns.

Last year, the Ministry of Transport announced the introduction of a smart card and e-ticketing system which would enable train passengers to book their train tickets fast.

Under this system, it will enable passengers passing through the respective stations to purchase reload cards, cards with monthly usage packages and tickets through ‘QR codes’ at the stations.

The contract for this project has been awarded to the relevant Chinese company after bidding through the national tender process and the company has been entrusted with the responsibility of installing all the ticket machines by the end of 2023.

The project aims to reduce the daily reported passenger congestion at railway stations.

The government had decided to award the proposed train ticketing project under an Asian Development Bank loan facility, to a Chinese company due the influence of certain Railway Department officials, sources said.

The total cost of the project is approximately US $ 22 million and the warranty period of the project is 8 years.

In comparison to this investment, the cost per day to issue train tickets is over at least Rs. 1.2 million.

If this project is implemented, the Sri Lanka Railway Department will have to allocate more than Rs. 1.2 million per day to justify this investment, whether the trains operate or not.

Sri Lanka Telecom (SLT), which is a government agency, has already come up with a viable proposal for the project, but a private company which claims to be the Sri Lankan representative of the Chinese company involved in the project, is to implement the project, the Secretary of the Railway Drivers’ Association Indika Dodangoda said.

The association alleged that the Chinese company involved in the project had no experience in carrying out projects in Sri Lanka and that the Chinese company was also a blacklisted company in Finland and Norway.

Dodamgoda said that the Chinese company has only one officer in the locally established company and that pressure is being exerted by outside parties to hand over the project to that company.

Meanwhile, Cabinet approval had been granted for the project to partner with a suitable local company and based on the preference of the Chinese company, they had selected Softlogic.

Within the procurement process, the Principle Bidder has the power to change a subcontractor as this is subject to the subcontractor recruitment process and is not mentioned in the Principle Bidder’s Bid Proposal.

The present Minister of Transport Gamini Lokuge has urged the Government, including the President, to appoint SLT as the local agent and provide a lasting solution.

The Railway Drivers’ Association pointed out that SLT has now come up with a similar proposal for a pay-as-you-earn scheme without any initial expense.

The Railway Drivers’ Association had requested the President in writing, urging him to immediately take steps to remove the project from the Chinese company and hand it over to Sri Lanka Telecom or a local company, as the implementation of the project could lead to redundancy of railway staff.

When inquired about this situation, General Manager of Railways Dilantha Fernando told the Colombo Gazette that the project had received Cabinet approval during the tenure of Mahinda Amaraweera who served as the then Minister of Transport.

Former Minister of Transport and current Minister of Environment Mahinda Amaraweera stated that the project was approved by the Cabinet and handed over to the relevant Chinese company after a call for tenders.

Minister Amaraweera added that since the relevant cabinet paper was prepared and submitted by the Railway Department, steps were taken to submit it to the Cabinet for approval without much scrutiny.

Meanwhile, Transport Minister Gamini Lokuge said that the Cabinet had approved the project to install these train ticketing machines prior to him assuming the post of Transport Minister and that the call for tenders had been finalized by the time he took over the Transport Ministry.

Therefore, he said that as the approval has already been granted to award the tender to the Chinese company, he was not in a position to cancel it.

However, there is one condition in the tender awarded to the Chinese company, which is that the project should be implemented in collaboration with a local company.

Hence, Minister Lokuge said that as the Chinese company had already named Softlogic as their local partner, there is no possibility to award the tender to Telecom.

But, he said that if Telecom was prepared to carry out the project free of charge, then it could be given to them even tomorrow.

As this ADB funded project to install the train ticketing machines is scheduled to commence within a year, the Memorandum of Understanding (MoU) is expected to be signed this year. (Colombo Gazette)


  1. Transparent tender procurement process at its finest in Sri Lanka !!! What does the US Ambassador find so hard to comprehend about this process ? The integrity of Sri Lankan ministers is legendary.

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