Sobitha Thera moves Supreme Court against coal deal

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.

Lanka Coal Company awarded the tender for the supply of 4.5 million metric tons of high calorific coal to Black Sand Commodities of Dubai.

Back Sand Commodities was the only responsive bidder. Subsequently, Lanka Coal Company ( LCC) Chairman, Jagath Perera, admitted that LCC had, with the approval of the Special Standing Cabinet Appointed Procurement Committee (SSCAPC), changed the qualification criteria so that third parties could bid with registered bidders. This changed was made just six days prior to the closing date  of the tender and Black Sand Commodities entered the tender process, through that change, representing an already registered supplier, Suek AG.

In his petition to the Supreme Court, the petitioner has made the entire Cabinet of Ministers, the SCAPC members, and the TEC members, respondents. Lanka Coal Company and some of its  officers, and Black Sand Commodities, have also been made respondents in the petition.

The entire process of amending the tender clauses has been tailor-made to accommodate Black Sand Commodities, which was not a party identified as a registered supplier, the petitioner has claimed. Although this tender is an international tender, which was the largest ever tender in  Sri Lankan history, no proper publication has been made to  the said amendment, thereby denying the interested parties to join hand with other registered suppliers and bid more competitive terms and prices, and as a result of that, the country is paying at least 500 million USD more than the market price, the petitioner claimed. “Process that has been followed has denied the people of Sri Lanka to secure and purchase coal on more favourable terms,” it further said .

As per the amendment , only a registered supplier can submit bids, together with a third party, and the amendment does not permit third party to submit bids, independently, the petitioner has said. Accordingly, Black Sand Commodities, which is not a registered supplier, in any event cannot supply a bid by itself. As such, the TEC and SSCAPC should have declared this bid invalid,  the petitioner has said.

In his petition, Omalpe Thera has questioned the price at which the tender has beenawarded when the market price was much lower than the one quoted. As per his claim, entering into a long term contract for a commodity of which the price is highly fluctuating, is not rational and reasonable.

The petitioner states that there has been debilitating post-independence corruption and waste accumulating and gathering momentum, and he and like-minded citizens are of the view that, as a nation, there must be an entrenched, zero tolerance towards corruption, bribery, waste and misuse of public funds. Corruption is one of the greatest challenges facing contemporary Sri Lanka and indeed, other emerging nations.

Not only must proposals and/or bids, that are submitted in a tender, be subjected to intense scrutiny and meticulous evaluation, by experts in that particular field, without any form of influence or corruption, but there should be installed a multi- structured approval process, so that there are proper checks and balances.

In another development, as reported by The Island, previously, the claim that Black Sand is giving six months interest free credit seems to be a misrepresentation of actual facts. As per the tender, supply is made on a 150 days irrevocable LC, to be opened at People’s Bank, by LCC, or otherwise, funds needs to be deposited in an escrow account, prior to shipment. “Whether People’s Bank has a facility in LCC’s name for a 350 million USD (for six months shipment) is a big question, for which only People’s Bank knows the answer,” industry analyst said.

As per the award letter, issued by LCC, on 25 August, Black Sand is required to submit the performance bond within 14 days, that is before 8 September, but this has yet not been done .