Spotlight on covering approval for USD 16 mn transaction

Govt. defends emergency coal purchases

By Shamindra Feddinando

Co-cabinet spokesman and Energy Minister Udaya Gammanpila yesterday (3) told the post-cabinet media briefing at the Information Department that the government followed proper procedures in respect of spot purchase of 300,000 MT of coal required by Lakvijaya power plant at Norochcholai.

Pivithuru Hela Urumaya leader Gammanpila said so when The Island asked him why the government continued with the controversial practice of spot purchases against the backdrop of a spate of corruption accusations against both the SLFP-led UPFA and UNP-SLFP administrations regarding coal purchases.

Referring to the particular cabinet decision taken on Sept 2, 2020, The Island pointed out that the Permanent Procurement Committee had recommended the awarding of the tender worth USD 16.18 mn to M/S Swiss Singapore Overseas Enterprises Pvt. Limited.

The cabinet however granted covering approval to the proposal made by Power Minister Dullus Alahapperuma. The selected supplier is part of Mumbai headquartered global conglomerate Aditya Birla Group.

Pointing out the change of government took place in 2019 November, The Island sought an explanation why regular purchases couldn’t be made, attorney at law Gammanpila explained such acquisitions were made when world market prices were lower than that of the supplier/suppliers’ price.

 The minister also explained various factors which could contribute to the government going ahead with emergency purchases.

According to a special audit on procurement of coal by Lanka Coal Company (Pvt) Limited from 2009 to 2016 undertaken by the Auditor General’s Department, revealed that there had been instances of coal being supplied without following proper procurement procedures as well as outside procurement process.

Earlier accusations as regards mega contract awarded to the same company led to the sacking of Lanka Coal Company Chairman attorney-at-law Maithri Gunaratne and the entire board of directors in January 2017.

The media was also told of co-cabinet spokesman Gammanpila in his capacity as the Energy Minister submitting a proposal to the cabinet regarding installation of three oil tanks at the Kolonnawa storage complex at a cost of Rs 942.47 mn (sans VAT payment). According to the cabinet paper, cabinet -appointed procurement committee had recommended Indo-East Engineering and Construction (Lanka) Private Limited to undertake the project.