News
Sandstorm over allocations: Major share of sand given to companies owned by Sirisena brothers
Between March 2018 and May 2019, the Government-owned GSMB Technical Services Pvt Ltd (TSPL) issued thousands of cubes of sand mined in Manampitiya on a preferential basis to three companies carrying out “development work” in the Polonnaruwa district—two of them owned by brothers of former President Maithripala Sirisena, a report from the National Audit Office (NAO) shows.
The special report on the TSPL’s Manampitiya sand mining project reveals that 10,949 cubes—at the rate of between 28 and 29 cubes a day—were released to KMC Constructions Lanka (Pvt) Ltd and Araliya Engineering (Pvt) Ltd. The former is owned by Kapila Gamini Sirisena while the proprietor of the latter is Dudley Sirisena.
The third entity, the Polonnaruwa-headquartered Orient Construction Co (Pvt) Ltd, received a lower quota of 2,675 cubes during the same period.
Only 947 cubes of Manampitiya sand, said to be among the best for construction, were sold for domestic requirements outside of the Polonnaruwa district during this period. But a total of 5,641 cubes were issued preferentially for “domestic needs” within the Polonnaruwa district while another 28,411 cubes were allocated to other institutions and persons, again “on a priority basis”.
The report, which recommends that sand should hereafter be issued only after taking into account requirements countrywide, said that orders were made to TSPL through the Polonnaruwa District Secretary to release the aggregate first to projects like ‘Rajarata Navodaya’ and ‘Pibidemu Polonnaruwa’.
The District Secretary additionally gave instructions to provide (as a priority) the total quantity of sand requested by site engineers of companies engaged in development initiatives throughout the Polonnaruwa district. However, a bulk of the material thus released also went to the two companies chaired by Sirisena brothers. It was not immediately clear whether this was because they were the main contractors in all these projects.
Sand was issued, too, to parties recommended by the TSPL Chairman and Chief Executive Officer; and to public officials for house construction on letters written by the heads of the relevant public institutions. Still more went towards TSPL employees and sand miners who were building houses while Grama Niladharis were found to have certified letters on behalf of Polonnaruwa residents who were putting up homes.
Distribution on such criteria had broad impact because only half (50 percent) of the sand extracted at Manampitiya was handed over to the Government-owned TSPL which holds 102 artisanal mining licences from the Geological Survey and Mines Bureau (GSMB).
The rest was held and sold by the Independent Tipper Owners and Sand Miners Association (ITOSMA) of Polonnaruwa which was “irregularly” granted monopoly over 217 out of 261 registered sand mining corridors upstream of the river.
Between March 2018 and May 2019, therefore, a higher share of the sand handed over to TSPL by the ITOSMA was issued on a priority basis, the NAO says. The manner in which the Association was appointed as “representatives” of a large number of sand corridors is also questioned in the report.
A technical officer from TSPL had recommended in May 14, 2018, that a new methodology be adopted whereby new sand mining corridors are handed over only to permanent residents of the Polonnaruwa district.
But on May 17, 2018, the ITOSMA submitted a register with the names of 120 Association members to the TSPL Chairman with a letter of recommendation from a Coordinating Secretary to the Environment Minister (then President Sirisena) causing authorisation to be granted to the union to mine sand in 83 percent of available sand corridors. This continued from June 2018 to November 2019 when a fire–suspected by police to be arson–broke out at the TSPL’s Manampitiya project office.
The monopoly caused distortions in the sand market. The “great demand” for Manampitiya river sand created intense competition among buyers and transporters. Therefore, prices should have been lower. However, the control exercised by the ITOSMA whose members had a captive supply and the absence of a systematic distribution method led to skyrocketing market prices, the NAO says.
TSPL took over mining and sale of Manampitiya sand following a Supreme Court judgment in March 2008. The main objectives were to stop flooding in Manampitiya and Galella area (caused by sand from the Mahaweli River depositing in large quantities at Manampitiya and Somawathiya) and to meet sand shortages.
Sixty-six percent TSPL shares are owned by the GSMB; 16.67 percent by the National Gem and Jewellery Authority; and 16.67 percent by Lanka Phosphate Ltd. It has a Board of Directors comprising representatives all these institutions and the Treasury.
But this Board neither authorised nor formally documented the practice followed between June 2018 and November 2019 involving the ITOSMA. Therefore, the NAO observes, the Association was granted control of the sand corridors “without getting approval”.
Since January 2020, however, a new methodology is in place, the NAO says. On the instructions of the TSPL Chairman to the Manager of the Manampitiya project, sand is now issued to buyers based on a waiting list compiled on a “first come, first served basis”. The ITOSMA has no control of the sand corridors and the mining is carried out by labourers employed by TSPL.