The National Audit Office has disclosed that the cancellation of gas procurement by Litro Lanka Gas Company for the years 2022/2023 and subsequent purchase from another company at a higher price has imposed an additional burden of 1,138,837,430 Sri Lankan Rupees on the government.
The controversy emerged when the company canceled the procurement with the initially selected supplier offering gas at $96 per metric ton and opted for a higher-priced alternative, costing between $118.83 and $129 per metric ton. The government, having allocated $70 million from the World Bank Fund to Litro Gas Company, witnessed the utilization of these funds to acquire 100,000 metric tons of gas at elevated prices.
Between June and December 2022, 88,535 metric tons were purchased at $129 per ton, and from December 2022 to January 2023, 9,825 metric tons were procured at $118.83 per ton.
The Technical Appraisal Committee had initially recommended the selection of the company proposing the lowest gas price, a decision endorsed by the procurement committee and the Council of Ministers. However, an appeal from another company offering a higher price was accepted by the Appeals Board, leading to the cancellation of the initial procurement.
The audit report emphasizes a lack of transparency in the procurement process, noting that the company offering a lower price was denied the opportunity to supply on an advance payment basis, while another company was granted the same under similar conditions, without considering the request received.
Litro Gas Company cited the economic crisis prevailing in the country as a justification for the decisions made. However, the audit report calls for scrutiny of decisions made during such crisis situations to ensure optimal and impartial outcomes for the economy and society. The controversy surrounding the gas procurement has raised concerns about transparency and adherence to procurement protocols within the company.
