Coal procuring deal further messed up without tender
Sri Lanka’s coal procurement process is getting shadier by the day. After the Auditor General confirmed Lanka Coal Company (LCC) not adhering to the tender process, the Cabinet resorted to awarding four more shipments to the controversial Suek AG subsidiary, Black Sand LLC without a tender which has the industry reeling again.
The Auditor General confirmed that LCC technical evaluation committee and SSCAPC (Special Standing Cabinet Appointed Procurement Committee) failed in following the approved procurement process of the government, in awarding the controversial coal tender to Black Sand Commodities LLC.
The tender which was floated in July for procurement of 4.5 million metric tonnes (MT) for two years of coal requirements for the Puttalam Coal Power Plant came under heavy criticism and challenges and last month the tender process was cancelled.
Industry officials say that this same controversial bidder, Black Sand has now been awarded four more shipments worth nearly US $ 80 million without any tender.
After canceling the tender, the government to power the plant, declared that it is advancing the previous year’s balance tender of 19 shipments (60,000 MT per shipment) to Swiss Singapore and six shipments to Suek AG which is Black Sand’s holding company, Kanchana Wijesekara, Minister of Power and Energy submitted in a cabinet paper dated September 22.
It recommended importing five shipments from Swiss Singapore at $ 320.22 per MT and six shipments from Black Sand at $ 322.19 per MT.
As per the internal sources of LCC, Suek AG (Black Sand) did not have six outstanding shipments from the previous year’s spot tender, but only two outstanding shipments.
“The Ministry cancelled the tender and parallel to cancelling the tender awarded six shipments to the same party without any tender and at the same price terms that Black Sand offered at the canceled tender but paying the money in advance before delivery,” an industry source said. Contacting LCC officials was not possible as they were at meetings on Thursday and Friday. Messages sent to them were not responded to.
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