Controversial Singapore firm bags coal deal
Sri Lanka is now being embroiled in another coal procurement deal with Swiss Singapore O ve r s e a s Enterprises Pte Ltd ( SSOE) recently, once again sparking allegations against the company of irregularities in importing coal since 2009.
The Power and Energy Ministry is not following a formal and practical annual procurement process to avoid malpractices in coal purchases for the Lakvijaya Power Plant in Norochcholai since 2009, a Special Audit Report of the Auditor General (AG) revealed.
The audit query found estimated losses amounting to more than Rs. 4,145.43 million due to irregularities in coal purchases between 2009 and 2016.
The report disclosed that there was lack of transparency in the manner in which tenders were awarded; there was no proper documentation of the process.
The authorities concerned should ensure that the pre- bid meetings are held with better effectiveness and through that minimise problems that may arise in the future, the report said.
Ignoring the findings of this audit query, the US$ 16 million contract was granted to this company to provide 300,000 tonnes of coal for the Lakvijaya coal power plant in Norochcholai in Puttalam at $60.71 a tonne.
The government Information Department office said the Cabinet of ministers recently approved the deal to award Swiss Singapore Overseas Enterprises the contract to supply half of the power plant’s 2.25 million metric tonne coal requirement.
The same company has won the contract previously to supply 50 per cent of the power plant’s 2.25 million metric ton coal requirement to the 900MW power plant in Norochcholai from November 2019 to April 2021 at $60.71 a tonne.
It is mind-boggling as to how the new government has given a green light to supply coal to the same company which was embroiled in an irregular deal that incurred a loss of approximately Rs. 1.2 billion to the country in 2016, industry observers said.
In July 2016, a petition was lodged with the Supreme Court regarding the previous transaction pertaining to the awarding of tenders to Swiss Singapore O ve r s e a s Enterprises Pte Ltd for the purchase of coal that incurred a loss of approximately Rs. 1.2 billion to the country.
Though the application was dismissed citing technical reasons, the Supreme Court said that the transaction “shocked the conscience of the Court”.
The AG recommended that officers responsible for the estimated loss, additional cost, loss of income amounting to more than Rs. 4,000 million should be identified and that the procurement process should be made formal to prevent the recurrence of such losses in the future.
Though the application was dismissed citing technical reasons, the Supreme Court said that the transaction “shocked the conscience of the Court”.