Milco involved in not-so-milky expired milk powder deal

State-owned dairy producer, Milco (Pvt) Ltd has come under allegations of irregularities in awarding a tender called to sell a stock of 649 metric tons of milk powder unsuitable for human consumption in 2020, Agriculture Ministry sources divulged.

A ministerial inquiry is now underway to find out as to how this expired milk food tender for animal feed has been awarded to the buyer who purchased similar stocks in two previous tenders.

The ministry has issued a directive to Milco management not to award this tender to the same buyer as he was accused of winning the tender by manipulating it with the connivance of a company official, official documents show.

Agriculture Ministry Secretary Gunadasa Samarasinghe has sent a letter to the chairman of Milco calling for an explanation for neglecting the ministry directive in the tender awarding matter which was under investigation.

Agriculture Minister Mahinda Amaraweera has also issued a separate directive to the committee appointed to probe in to this alleged malpractice to find out as to how the large stock of milk powder had been returned to stores rejecting it as an expired stock at a time where there was a high demand for milk powder due to a shortage.

When asked for comments on this matter Milco Chairman Renuka Perera told the Business Times that the incident took place during the period of the previous chairman and all the decisions were taken with the approval of the then board of directors.

But he said that, he has perused all relevant documents and files relating to this matter and he observed that the selected bidder of this tender was a yoghurt manufacturer and his bid price of Rs. 28 per metric ton of expired milk powder was only suitable for animal feed and highly unsuitable for human consumption.

Therefore the then board of directors has taken a decision to award the tender to the previous buyer who was also among the bidders of the latest tender.

According to the Auditor General’s recent report 720 metric tons had been brought back to the store after receiving complaints from consumers stating they are inappropriate for human consumption and after selling a part of it for animal food in 2018 and 2019 in two tenders.

The remaining 649 metric tons was stored in Ambewela factory even up to 31st December 2019.