Coal Controversy: USD 3mn loss in public funds?

24 August 2016 05:01 am - 6     - {{hitsCtrl.values.hits}}


The controversial Coal Tender process has taken a different turn with the Power and Energy Ministry deciding to continue to purchase coal from Swiss Singapore despite damning observations by the Supreme Court.

The issue came to light last year after the Daily Mirror broke the story regarding the circumventing of procedure and process in awarding a sport tender to the same company. Thereafter legal action was filed in the Supreme Court, which observed a blatant violation of the process when awarding the tender.

The decision comes despite the Power and Energy Ministry was said to have been “taken aback” last week when the spot tender they called for coal had the lowest price for this commodity at USD 64.77 per metric tonne. However, it was reported on Monday (22), according to Ministry Secretary Dr. B.M.S Batagoda, that the Power and Energy Ministry would continue to contract with Swiss Singapore Overseas Enterprises Pte Limited for the supply of coal. The reason given for this has been that their contract price was USD 7 less than what was quoted in a recent spot tender at USD 58 per metric tonne.

However, the Daily Mirror learns that in order to arrive at the complete price which has to be paid to Swiss Singapore the calculations have to be made according to an API 4 Index. This figure does not seem to have been taken into account in classifying Swiss Singapore as the best option because had it been accounted for, the calculations would have shown that the long term tender with this company would have resulted in USD 9.17 more per metric tonne than what would have been spent using the spot tender method.

This in turn translates into an excessive spending of USD 3,026,100 for the required 330,000 metric tonnes of coal in September.

The figures given by the Power and Energy Ministry has also been questioned publicly by Wasantha Samarasinghe of the Voice Against Corruption Movement.

Furthermore the continuation to contract with Swiss Singapore flies in the face of the concerns that were raised by the Supreme Court of Sri Lanka after this controversy that has racked the local coal industry was brought to light by fundamental rights petitions that were filed by two other coal suppliers.

K. Sripavan, C.J, in his judgement on the case said “I have no alternative but to declare the decision of the SCAPC (Standing Cabinet Appointed Procurement Committee) to award the tender to the 22nd Respondent (Swiss Singapore) cannot stand valid in the eye of the law.” In its judgment the Chief Justice also observed that some events which took place in the award of the coal tender to Swiss Singapore Overseas Enterprises Pte Ltd “shocks the conscience of the Court”

The applications were dismissed however due to preliminary objections that were raised. (Rashmin Tirimanne De Silva)

  Comments - 6

  • Harry Wednesday, 24 August 2016 08:18 AM

    Yahapalanaya! is this what you promised as transparency! Was it done by the 'Previous Regime'????

    Dellom Wednesday, 24 August 2016 08:53 AM

    Did not we notice it? Gov changed and crooks crossed so ended up with the same!!!!

    NAK Wednesday, 24 August 2016 10:02 AM

    No comment! What's the point?

    Hadam Wednesday, 24 August 2016 12:36 PM

    Going against supreme court is breaching countries law..! Obviously you can have a feel given the amount of money involved few big wigs have hands in the deal. Which leaders thinking greater good of the people now days...? All up for there own grabs...! Make much money as possible and quickly as you can...! Wonder what they going to take with them to grave apart from nice flashy coffin and a suite.

    max Wednesday, 24 August 2016 04:28 PM

    Put the blame to Rajapakshes. As usual.

    Perumal Wednesday, 24 August 2016 04:32 PM

    The need of the our is an ISIS type organisation who would abduct and cut the throats of wrong doers, irrespective of their position and standing

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