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Suppliers boycott Sathosa; Trade Ministry seeks Rs. 2bn from Treasury
In the face of suppliers refusing to do business with the state-run Lanka Sathosa due to the non-settlement of bills, the Trade Ministry is seeking approval to obtain Rs 2 billion for purchases.
This money will be used for immediate spot purchases from private traders to get over the problem. Lanka Sathosa, the Government’s main retail outlet, has run up an arrears of Rs 7.7 billion.
The Treasury had given a guarantee in September for a credit facility from a state bank amounting to Rs 2.2 billion to maintain buffer stock of rice.
Trade Minister Bandula Gunawardena is now seeking approval to make use of this money to buy essential items including Dhal, sugar, onions and tin-fish. The purchases will be made under the supervision of the Trade Ministry secretary. “We have been compelled to go into spot purchases as suppliers have been reluctant to bid for tenders due to the delay in the payments,” Mr Gunawardena told the Sunday Times.
He said some of the suppliers were moving away and thereby Sathosa was forced to buy goods at higher prices.
In his cabinet paper, the Minister said the availability of cash would enable Sathosa to bargain with the suppliers and provide better prices to the consumers.
The move comes in the wake of a high demand for some of the items from Lanka Sathosa in view of the COVID-19 situation.
Mr Gunawardena said Lanka Sathosa losses have been on the rise from 2014 and now stood at more than Rs 19 billion.
The losses are Rs 3.46 bn (2014), Rs 1.97bn (2015) Rs 5.11bn (2016) Rs 2.78bn (2017) , Rs 2.92bn (2018) and Rs 3.18bn (2019).