Sri Lanka’s fertilizer imports have been tainted with tender manipulations by top officials of the Ceylon Fertilizer Corporation(CFC) and the Colombo Commercial Fertilizer (CCF), both State-owned institutions conducting regular tenders for purchase of Urea, local agents representing overseas suppliers alleged.
They revealed that Urea fertilizer stocks are being purchased without following Tender guidelines, and the heads of the two institutions make purchases, changing the quantities stipulated in the Tender, to suit their own agenda, and not to meet the country’s requirement.
The Procurement Committee for Fertilizer is headed by the Secretary- Ministry of Fisheries, Dr (Mrs) Damita de Zoysa, who recommends the quantities required for the country, after surveying the market.
The recommended quantities are then advertised for purchase on Tender by the CFC and CCF. It is the CFC and CCF who then tell the Cabinet Approved Tender Board (CATB) what quantities they will purchase, after the Tender is opened and prices known.
The authorities don’t purchase the recommended quantity indicated in the Tender document, if the successful bidder is not among ‘their preferred list’, causing a loss of millions of rupees for the country, local agents alleged.
When contacted for clarification on this issue, CFC Chairman N.F.M. Samsudeen told the Sunday Times that heads of CFC and CCF have the right to decide on the quantity of fertilizer that they are going to purchase, calling for Tenders every month.
If the price is high, they would purchase a quantity less than the recommended quantity, as they have to consider the financial situation at the Treasury.
This is being done with the consent of the procurement committee and the CATB, he added
According to Tender documents on 23.4.2012 (Tender2012/Fer/03), a Tender was opened for the purchase of 60,000 MT (i.e. 12,000 MT x 5 Lots) Urea, but only three parcels of Urea or 36,000 MT were purchased.
The CATB was told by the CFC and CCF heads that they could manage with three parcels, as the prices were too high.
Accordingly, two parcels or 24,000 MT was awarded to M/s Mid Gulf International, Dubai, and one parcel of 12,000 MT to M/s Helm, Germany, at US$ 549.00 per MT and US$ 549.98 per MT respectively, on 180-day LC terms, local agents allege.
The next two parcels of 12,000 MT each were offered by M/s Helm, Germany at US$ 552.98 and US$ 554.98 per MT, respectively, but not purchased.
The latest Tender for Urea, which closed on May 21, 2012 (Tender 2012/Fer/04), again was for 60,000 MT (or 5 parcels of12,000 MT), all 5 parcels were purchased -- 24,000 MT at US$ 549.47, 12,000 MT at US$ 554.47, 12,000 MT at US$ 559.47 all from ETA, Dubai, and 12,000 MT at US$ 558.48 and 12,000 MT at US$ 559.18, both from Valency International, Singapore, on 180-day LC terms.
The heads of CFC and CCF opted to buy all five parcels, whereas, on the previous Tender, they rejected two parcels on the basis that the prices were too high, the local agents said.
Had they purchased the last two parcels offered at the last Tender, and launched a Tender for only the balance 3 parcels, they would have saved an average of US$ 5/MT or around US$ 300,000 or Rs 30 million, local agents said.
The agents representing overseas principals say that it has become customary to get calls from members of the CATB asking them to reduce prices that are offered at the Tender.
Agents said this is not possible, as only the principals can agree to any reduction. Besides leading to malpractices, this private negotiation once tendered, if at all, is genuine, should be given in writing, with the sanction of the CATB.
The agents also say that, during the past two years, a number of Tenders called were cancelled. Their principals are thereby, put in great difficulty and expense. Replying to the allegations, CFC Chairman Samsudeen noted that they used to negotiate with the successful bidder to buy the fertilizer at a price less than the price quoted in the Tender document, for the benefit of the country. |
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