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Fri. Former Jathika Hela Urumaya (JHU) MP Omalpe Sobitha Thera has filed a human rights complaint in the Supreme Court challenging the controversial coal deal and allocation process.

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

Back Sand Commodities was the only responsive bidder. Subsequently, the chairman of the Lanka Coal Company (LCC), Jagath Perera, admitted that the LCC had, with the approval of the Cabinet-appointed Standing Special Committee on Contracts (SSCAPC), amended the qualification criteria so that third parties can bid with registered bidders. This change was made just six days before the tender closing date and Black Sand Commodities entered the tender process, through this change, representing an already registered supplier, Suek AG.

In his petition to the Supreme Court, the petitioner implicated the entire Cabinet of Ministers, the members of the SCAPC and the members of the TEC. Lanka Coal Company and some of its executives, as well as Black Sand Commodities, were also implicated in the petition.

The whole process of modifying the tender clauses was tailor-made to accommodate Black Sand Commodities, which was not a party identified as a registered supplier, the petitioner claimed. Although this tender was an international tender, which was the largest ever in the history of Sri Lanka, no proper publication was made of said amendment, thus preventing interested parties from joining to other registered suppliers and to offer more competitive terms and prices, and as a result, the country is paying at least $500 million more than the market price, the petitioner claimed. “The process that was followed prevented the people of Sri Lanka from obtaining and buying coal on more favorable terms,” he added.

According to the amendment, only a registered supplier can submit bids, together with a third party, and the amendment does not allow a third party to submit bids, independently, the petitioner said. Accordingly, Black Sand Commodities, which is not a registered supplier, cannot under any circumstances provide an offer on its own. As such, the TEC and SSCAPC should have declared this offer invalid, the petitioner said.

In its petition, Omalpe Thera questioned the price at which the tender was awarded when the market price was much lower than the one offered. According to his request, entering into a long-term contract for a product whose price fluctuates greatly is neither rational nor reasonable.

The petitioner states that there has been corruption and debilitating waste after independence which has accumulated and grown, and he and like-minded citizens are of the opinion that as nation, there must be an ingrained zero tolerance for corruption, bribery, waste and embezzlement of public funds. Corruption is one of the biggest challenges facing contemporary Sri Lanka and indeed other emerging countries.

Not only must the proposals and/or bids submitted under a tender be subject to careful scrutiny and meticulous evaluation, by experts in that particular field, without any form of influence or corruption , but there must be a multi-structured trust. process, so that there are appropriate checks and balances.

In another development, as reported by The Island, Previously, the claim that Black Sand provides interest-free credit for six months appears to be a misrepresentation of the true facts. In accordance with the invitation to tender, the supply is made on an irrevocable LC of 150 days, to be opened at the Banque Populaire, by LCC, or otherwise, the funds must be deposited in a crook account, before shipping. “Whether the People’s Bank has a facility in the name of LCC for a shipment of $350 million (for a six-month shipment) is a big question, for which only the People’s Bank knows the answer,” said an industry analyst.

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

About Jean R. Manzer

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