Sri Lanka’s Auditor General calls for probe in dubious coal deal
Sri Lanka’s Auditor General has recommended investigating the dubious coal tender deal awarded to Black Sands LLC by the Ministry of Power and Energy subsidiary, Lanka Coal Company Pvt Ltd (LCC).
This follows the stock market disclosure by Browns PLC saying that together with China Machinery Engineering Corporation (CMEC), they have also sent a proposal for the coal supply tender.
Black Sands LLC has not managed to submit the performance bond before the stipulated timeline of September 8. Browns PLC in its disclosure to the Stock Exchange indicated that now the award is automatically cancelled.
However, LCC officials dispute this, saying that it is not cancelled. “One of the entities that sent unsolicited proposals has threatened to file a case against Black Sands LLC. Now, this supplier is saying that unless this issue is sorted, it will not send the coal. This entity is applying coal without any collateral. Now there is a court case against the company,” one official explained.
The government said this week. it would seek the advice of the Attorney General on the controversy.
Ven. Omalpe Sobitha Thera, former MP of the Jathika Hela Urumaya (JHU) has filed a fundamental rights case in the Supreme Court challenging the controversial coal deal and the process of awarding it. “With all this, the supplier says that if he cannot get the shipment across with the court saying that it is illegal, he will not be getting the money,” an LCC official told the Business Times on Wednesday. He insisted that the offer is still valid and that the supplier needs assurance to go ahead with it.
However, Browns officials insist that the award is annulled because now there is no tender procedure. “The selected company has not submitted the performance bond to the People’s Bank. If the company was concerned about a legal issue, why did they wait till the last moment on September 7 to say that they were not participating?” a Browns official asked.
The LCC official said that Black Sands LLC was trying to get the performance bond from the bank till the last day. He said Browns and CMEC sent an original proposal quoting a freight rate at US $ 98 per metric tonne, which is a very high price. “In their second proposal, the joint venture entities have said that the freight rate is the buyer’s responsibility. They did not give a cost-plus freight price or a cfr.” In the subsequent proposal Browns and CMEC has reduced freight rates to US$30 per metric tonne,
a Browns official said.
LCC, in a letter dated August 2nd, has intimated to the Technical Evaluation Committee of the Ceylon Electricity Board that there are four unsolicited proposals, of which Suek AG is one. Black Sands LLC represents Suek AG in the solicited proposals.
When queried by the LCC official whether one party can submit two proposals, one solicited and the other unsolicited, he said they were trying to get a government-to-government (G-to-G) proposal. “The unsolicited proposal was a government-to-government one where we tried getting coal directly from a government, but they said that since they do not have state owned coal mines, they did not consider G-to-G. Also, one party can submit a solicited and an unsolicited proposal. It is not a problem.”
He also added that the country is looking at least at eight to 10 hours of power cuts if this deal does not go through.
The 4.5 million MT tender is the largest awarded for coal in Sri Lanka to date.
Brown’s officials accede that it is a national issue and also say that if the country gets a better deal than what they along with CMEC offered, they will accept it.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!