CFC deals draw flak

The decision by the Ceylon Fertilizer Company (CFC) to award a tender for shipments of urea to a Singapore based company by the name of Singha International Pte Ltd, has come under fire by critics who say the company's credentials are not up to standard and that it has failed to submit a manufacturer’s certificate and an analysis certificate which are both tender requirements.

Singha International is believed to provide three parcels of urea, each containing 12,000 metric tons at a cost of US$299 per metric ton. An article in the October 14 issue of The Sunday Times FT explained the controversy surrounding the deal.

CFC Chairman Lalith Kantha Jayasekera told this newspaper this week that cabinet approval has been given to award the tender to Singha International and also stated that the performance guarantee for all three parcels has also been given, even though insiders have said that only one performance guarantee has been given for the first parcel. Critics are saying the company's credentials have not been verified and feel the CFC should enter into agreements with reputed and registered international fertilizer companies.

The technical evaluation committee as well as the cabinet appointed tender board had earlier rejected the bid from Singha because it was an 'at sight' offer meaning the payment would be made once the shipment arrived in Colombo, a feature which was not within the tender requirements and posed financial constraints to the CFC.

All the other tender offers were based on a letter of credit for a 180 day term. On that basis, the offer was rejected by the CATB and cabinet approval was needed for the deal to go forward. Jayasekera further stated that the bid from Singha is around US$89 less per metric ton than the other offers received and feels this is beneficial to the country.