The great democratic robbery

Sri Lankans have their own ways of doing things. We had a Sri Lankan brand of cricket. Now, that brand has been “recalled” due to technological obsolescence. A few young boys are passionately trying to develop a new Cricket brand. We always lived under the laurels and shadows of 2,500-years-old technology while the rest of the world moved on. 

We have our own brand of robbery as well. Internationally, we are second to none. From a five-year-old kid to 90-year-old grand dad, none are ashamed of practising this business in public. Some steal monetary assets. Some steal other’s valuable time by providing inefficient service. The rest steal others’ due place in the society. Parents teach kids to lie in front of the selection panels to rob another kid’s place in a school. It is common to witness how well-deserved, qualified people’s employment opportunities are robbed by the unqualified political lackeys. I can write volumes on this. I think I should write a book and name it “Idiot’s Guide to Democratic Robbery – Glimpse of Sri Lankan Expertise”. 

That is to reveal tricks played by the corrupted members in society so that decent people can catch them red-handed, expose them and warn others on the danger of any social interaction with them. I am sure that this book would be a best-seller. I can appoint a Sri Lankan editorial board selected from each stratum of the society and from each profession who could be considered as international experts in this dirty business. I will have a hard time to short-list them due to the sheer numbers of applicants from the public and corporate sectors. I’d love to invite a few Sri Lankan expatriates I know of, but unfortunately, they are currently in jail as the law caught them early in the act and punished, not like in Sri Lanka where authorities cast a blind eye.

Ascending scale of robber-tic skills 

When I was a kid, I watched “Haaralakshaya”, a movie directed by my favourite movie Director, Titus Totawatta. It was based on an actual incident of robbing four lakhs of rupees from the Colombo Turf Club, in 1949. This attempt eventually led to the killing of one person and critically injuring another. During this epoch, except the aforementioned incident, mega-scale robberies were unheard of. However, there were plenty of petty robberies and corrupt activities reported on the daily tabloids like, Aththa, Dawasa, Sawasa, Ravaya newspapers. Such news had their own exaggeration to get people’s attention.

My focus here is the crimes against the public properties and taxpayer money. 

Until 1977, we were local robbers. I remember when I was little, our local politician’s close circle consisted of illicit liquor (kassippu) producers and cattle stealers (Harak Horu). He won the national elections for 16 years continually. His opponent was not known for such maverick behaviour. However, majority voters preferred the thuggish nominee and addressed him as “Sir”. We were so idiotic, imbecile and moronic to promote such people into esteemed positions across the country. 

Outwards, we are decent while animalistic sensations are being brewed inside. When a family watches a movie, if there is a romantic scene on the screen, parents put hand across kids’ eyes to pretend such visuals are harmful for kids. If the movie has a shooting sequence or gore fight scenes or brutal killings, parents don’t give a hoot to distract kids from watching. This is how we value and promote ‘love’ across our society. 

At each time, when the ‘good’ candidate in my home electorate lost the election after spending a lot of money for the campaign, his father, being a rich businessman who owned a rubber plantation, used to say, “Don’t worry boys, just assume one day’s worth of rubber milk production spilled.” (Dawasaka kiri ahaka giya kiyala hitha ganilla kollane). Finally, this politician won at his fourth attempt, in 1977. He was one of the decent guys amongst the corrupted paddlers, but his prime time had been wasted by then. 

We became national level robbers with the patronage of capitalist and open economic government policies implemented in 1978. We did not stop there. We deployed continuous improvement initiatives. There was an exponential rise of corruption across the society. The second gear was too slow for us. So, we became internationally acclaimed robbers during the last two decades. At least we have something of the international standards. Currently, we rob at the speed of a supersonic jet. 

Let me talk about our unique DNA.

Germans use DIN standards. I was familiar with the internationally famed DIN standards used in civil engineering practices. When I worked in the last leg of the Mahaweli Scheme, Rantambe Hydro Power Project, I served for the State appointed German-Swizz Engineering Consultant. I can vouch that the DIN standards are one of the best standards in the developed world. Over 50 years ago, Germans introduced a ticket machine for Ceylon Transport Board (CTB) busses, with an absolute international guarantee that no one could fiddle with the machine to steal bus fares. The manufacturers highly talked about the German precision in mechanical engineering, but the Sri Lankan local robbery standards were much superior. 

One of my close relatives worked in the CTB head office as a mechanical engineer and he shared with me the news that our bus conductors developed 19 intrusive methods to manipulate the counter of the ticket machine, within the six months of the product introduction. They only needed a few sticks from a box of matches to perform this magic. Surely, Germans might have scratched their heads, wondering how on earth people who hadn’t even had formal secondary education, managed to do that. 

Sydney Water (SW) is the Water Regulatory Authority in Sydney metropolitan, Australia. During droughts, water usage is restricted by SW for the essential purposes only, prohibiting watering of lawns, washing of paved areas and cars, etc. A decade ago, I met one of my Tamil friends, who worked for Sydney Water. By the way, Sydney Water is full of Sri Lankan Tamil engineers who claim, that they were former employees of Sri Lanka Water Supply and Drainage Board. In contrast, the Transport for NSW (formerly RMS and RTA) is full of Sinhalese engineers who claim that they were former Road Engineers of Highways Department, RDA and RCDC in Sri Lanka. So, we are even now in that game.

So, back to my story, my friend told me that he developed a flow chart to identify all water restriction violators so that Sydney Water can impose fines on the violators. It was working well. One day, in a brain-storming session, another Sri Lankan Tamil engineer showed the others how to beat the flow chart and the regulation. He suggested that it was a matter of inter-changing water supply hose connections with the neighbour. If, both have the mutual understanding without accusing each other over the theft of water, Sydney water cannot issue a fine notice to a resident who uses someone else’s water because Sydney water has signed the contract with individual property owners for water supply. 

So, the contractual law is applicable to the owner and his property water supply. If you use your own water supply for unauthorised activities, you will get a fine. If neighbours cross-connect the property water supply, both can argue that they did not misuse their own water supply received under the contract. So, this is a proof that Sri Lankans are inventive in this craft. My friend did not reveal me whether SW found a remedy for this. SW might have added a new condition that one cannot knowingly allow another to use own water supply for unauthorised use.

Corporate sector

In general, a business is conducted to deliver products and services. The objective is to make a profit for the business investors after deducting all the costs. Usually, the vigilant public have a good understanding and a feeling when a company sets an over-price for a product or a service as people have limited money in hand. They can feel whether the set profit levels are reasonable or not, the competition in the industry is fair or not, the information provided to the public on the quality of product or service is correct or deceitful and the behaviour of the players of the business are ethical or abhorrent. My personal view is that only a handful of businesses in Sri Lanka are on good books of the people. When the entire society is engulfed in a web of corruption, how could we expect the businesses are immune? 

I am confident that I have sound experience in the construction sector activities. I dealt with a few international construction companies operated overseas and also in the Mahaweli Hydropower Scheme. These companies exercised legitimate ways of maximising their profits margin in construction activities. However, some of the practices I witnessed in Sri Lanka were on the borderline unethical although they were careful not to violate the contractual conditions. They exploited the weaknesses of documentation, specification, and verbal and written instructions prepared by the local supervisory staff when initiating exorbitant claims and cost variations. Large construction companies have specialists employed full time, to analyse project contract conditions and to find the loopholes. These analysts advise the construction staff continually on ways to maximise the profits of the project by getting approval for variations of work and by negotiating revised higher payment rates. This is an art based on scientific data, exploiting legal loopholes. Some clients who engage construction companies with limited funds in hand, go bankrupt during this process due to their inability to afford the cost variations. However, for the public sector projects which are initiated by a government of a country, this would be a matter of getting more loans from the funding agency to cover the cost variations because the public project must be completed irrespective of the final cost tag, to survive in their political game. 

The construction companies are aware of this uninterrupted supply of funds and of the lacklustre attitudes of the public officials who display no empathy or any shame to push the future generation into a debt trap. There are so many ways of generating legal and illegal construction claims and it is a matter for a technical article rather than a public article.

Over 20 years in Australia, I have been conducting tendering processes for multi-million dollars’ worth of contracts in the NSW State Government and Local Government Sectors. The Australian public sector government tendering process has been tightened gradually to avoid corrupt acts by the bidders and by the bid evaluators and the approvers. Occasional attempts to violate regulations are investigated by NSW ICAC (Independent Commission Against Corruption) and the politicians, public officials, corporate sector players and public involved in such activities are referred to the Courts for prosecution. Scores of high-profile people lost their positions and many went to jail, as a result. 

To maintain overseas Sri Lankan reputation, a few Sri Lankans also found corrupted. One such person’s Sri Lankan local experience proved handy. As a personal note, irrespective where you live, you will be tested by the contractors through various methods. Even after engagement of them for a project or a program by locking a fixed lumpsum price, they will try to maximise their profits by downgrading the quality of work. I could protect my employer from such a predicament because I had experience on tricks played by the contractors by closely observing how mega international construction companies operated in Sri Lanka. 

If the client’s representative is vigilant, sensible and ethical, such corrupt acts can be avoided. You must always be one step ahead of the contractor. I am not sure how sound the Sri Lankan public sector procurement policies, processes and procedures are. However, by observing the fact, as reported by mass media, that Sri Lanka has ended up producing infrastructure assets only 20% worth of the money spent on the development of such assets, we should seriously question whether Sri Lanka has the best practiced procurement and tendering processes. 

Robbers are copious in our daily lives. I am going to reveal a few Sri Lankan home-grown white-collar crime techniques executed in tendering processes so that law-abiding professionals in Sri Lanka can pay close attention to such acts, and shut the legal and technical loopholes. I can assure you that these Sri Lankan techniques can be rated as the internationally best. By the way, I know that you would query how I obtained this awareness. It was a matter of being vigilant and applying the knowledge of the international best-practiced public sector tendering processes. 

I was in the construction industry and tendering business over 30 years and I have seen the good, the bad and the ugly locally and internationally. I met many corrupted people locally, nationally and internationally in my life. It was an exciting exercise of critical analysis how these guys are in action and are being survived in Sri Lanka while such operators overseas are ended up in jail.

Excerpts from my best-seller

I am going to reveal some information from my imaginary book of “Idiot’s Guide to Democratic Robbery – Glimpse of Sri Lankan Expertise” as a virtual marketing exercise. Although I expect a few calls from decent professionals seeking help to avoid such robbery on their backyard, I may get many calls from the robbers as well, seeking help to perform more tricks. Unfortunately, I won’t be interested in returning calls from the second category.

To break the ice, I want to tell a joke appeared in the “Navayugaya” newspaper in the ’80s. Once a judge asked the accused how he managed to steal the wallet so discretely from the undergarment pocket of the traveller. The pick-pocketer beamingly replied, “Sir. You are asking me the fifth lesson of my book titled; Pick-pocketing Techniques. I normally charge fifty rupees for that lesson Sir.” 

However, I give my lessons free of charge. Anyway, our DNA is designed to accept anything that comes free and regret later. So, my dear corrupt officials must be aware of this.

Chapter 1 of my book is on petty crimes. It is huge. Recording of bogus over-time hours, obtaining undeserved allowances, stealing and personal use of minor public assets, performing personal works at workplace or doing secondary personal business during office hours, bribing others or taking bribes, switching contract bids after the closing date, submission of fake quotations, excessive front loading of Bill of Quantities of construction projects, sub-dividing bigger jobs into multiple stages to beat procurement policies on competitive quotations and the disregard of the conflict-of-interest aspects by the participants of the tendering process, could be mentioned as a few of petty crimes. This list goes on. 

As most of the society in Sri Lanka are experts on such petty crimes, I don’t need to explain further. However, I must emphasise that the cumulative annual cost of petty crimes is significantly high in Sri Lanka.

Chapter 2 Snippet – 10% commission 

In the public sector open tendering process, the client prepares the technical specifications, the contract conditions, the tender evaluation plan, the probity report, the conflict-of-interest declarations of all involved. The client appoints a technical evaluation committee and a tender evaluation panel. If all these are set up right way and people with high integrity are appointed to be involved in the tendering process, there is little room left for corruption.

Let’s put a few Sri Lankan politicians, high ranked officials and a few corporate sector heavy weights into the mix. This cocktail of members has vested interests and ulterior motives to get maximum benefits from the deal. Usually, there is a confidential departmental estimate or an allocated budget, in the form of an international aid or a locally available fund for a public sector project. Generally, corrupted officials estimate the project with a 10% margin after accommodating generally accepted 25% contractor profit margin. This means the cost estimate is 10% more than the worth of the asset that is to be acquired. 

When the project is something never done before, the setting of this benchmark is a quite easy exercise as officials write a fable to justify the estimate. So, the first action of the corrupted members is to reveal this information to the selected bidders known to them. So, this bidding is no longer based on actual quantified work but based on an imaginary allocated budget. So, the evaluators of the tender panel hope that ‘only’ one of their friendly companies would bid close enough to the budget estimate. 

If another rival company submitted a close bid, the evaluation panel can find a minor technical reason such as the ‘level’ of previous experience to downgrade the bid. This way the selection of slightly expensive offer is not a big deal. All lower bids are rejected citing, the bidders cannot do the project at offered prices. Then, the corrupted group will collect the 10% commission from the selected contractor as the department estimate has already been loaded with the 10% commission and it is shared among the chain of corrupted group. 

Once an international expert said that 10% commission is a lubricant in the economic machinery of poor countries and if the commissions are not paid by the international contractors, the politicians would not be interested in implementing any development projects in those countries and the poor will suffer more. Offering loans to developed countries is a business for rich countries as their contractors need continual engagement in international projects. That was how international funding agencies tolerated well-know 10% commission payments.

Hang on. This is an old trick practised in the late 90s. Didn’t I say that we had continuous improvement process in place? Of course, we are better than this. This 10% business was a kid’s hide and seek play in accordance with the current Sri Lankan corruption standards. 

Chapter 3 Snippet – Overpriced bidding

If a Capital Infrastructure project is implemented, usually its monetary value after the construction is more than the sums of the expenditure and the contractor’s general profit margin. The reason is a simple logic. When you build a house, you spend money on the material like cement, concrete, timber, stones, tiles, roofing sheets, etc. To assemble all material and build the house, labour cost must be added. These payments to the contractors have the built-in profit margin. After the construction, it is no longer a collection of just material, but it is a house or a home with added value and benefit for the end users. So, it is worth more than the expenditure. Strangely, in Sri Lanka, the actual worth of recently built massive infrastructure projects are reportedly less than the expenditure. How does this happen?

This is normally done for once in a generation massive projects like building super-highways, power plants, dams, airports, shipping ports, railway lines, etc. In general, these projects are funded by foreign loans. It is not easy to prepare a departmental estimate for such projects as there are many variables in the physical construction environment, unique nature of the project, simply because there are no similar previous projects in the same environment to compare. Hence, one cannot use any realistic square metre or per kilometre cost rates for cost the initial estimation purposes. This is an opportunity for the corrupt group to take the advantage of the situation. 

The usual ploy is that the group deals with a few known bidding companies secretly and ask them to submit bids almost 10 times higher than the actual construction cost. Now the problem for the evaluation committee is how to reject low bidders who have submitted genuine bids with reasonable profit margins. This is where the technical evaluation committee jumps into play. This committee only looks at the technical compliance of the bids, not the costs. They pretend they did not even see the costs, but they know exactly who the low bidders were. The aim is to set aside lower bids as non-technically compliant bids. 

The plot is hatched as early as the time of preparing project technical specifications. The specification writers make sure a few technical requirements inserted into the document so that only the friendly companies can satisfy fully through their unique products. The technical experts engaged in preparation of technical specification just copy and paste specifications of proprietary products and remove any references to the brand names. It is obvious that no two products in the commercial market are equal in specification for proprietary reasons. The specification says products of equivalent specifications are accepted but when there is exactly matched product is on offer by the bidder, it is no brainer to accept such products. 

Anyone who offers an equivalent or even a better product would be rejected by documenting there is a risk of accepting it when exact match is available. This way lower bids are excluded as technically non-compliant. Now, the evaluation panel has two or three extremely expensive bids to choose from. They follow a fair process this point onwards, to select one so that the evaluation panel would not be guilty of any wrongdoings even if their conduct is investigated by auditors. The outcome is the acceptance of an extremely overpriced bid while low bidders could have done the job. 

As an example, a contractor is engaged to deliver a project for $ 100 million. The contractor will spend $ 20 million and keep 25% profit which is $ 5 million. The remaining $ 75 million will be shared by the corrupted group consisted of politicians and officials. The country has a $ 100 million on books as a debt to pay back and the country has probably a $ 30 million worth asset if $ 5 million value addition is considered for the generated asset. Hence, the bandits inflicted 70% corruption in comparison with 10% typical commission. It is a gold standard improvement in corruption. 

“A foreign politician invited a Sri Lankan counterpart to visit his home. Having a cup of coffee, our guy asked the foreigner how he built such a nice house with his meagre earnings. He pointed a nearby sports stadium and said this is a gift from the contractor. While leaving, our guy made a reciprocal invitation to visit his home in Sri Lanka. When that happened, the foreign politician could not believe his eyes after seeing a multi-storey luxury mansion. When enquired how he managed to do this while living in a poor country, our guy asked him to look through the window and find the bridge built across the river. After much effort, the foreigner asked help from our guy to locate it. Then, our hero beamingly replied, “You are now standing on that bridge.” This is not a joke for our nation, but a reality.

(The writer is a professional engineer working in the Australian NSW Local Government Sector. His intention of expressing views on contemporary issues is to inspire youth to be innovative and unique. He is contactable via [email protected].)