The National Audit Office has revealed after a thorough appraisal that the Procurement Committee and the Technical Assessment Committee have not accomplished their work effectively and efficiently in the procurement process of buying coal for the 500 billion rupees Lakwijaya Coal Power Plant.
The audit has also revealed that the coal supply tender was awarded to Black Sand Commodities, which is not registered as a coal supplier. The tender was awarded within a short period of 35 days after the procurement process started.
The Lanka Coal Company has approved this procurement to purchase 4.5 million metric tonnes of coal. The credentials of this supplier and their past performance in coal supply have not been scrutinised before awarding the tender.
The secretary of the Ministry of Power and Energy had indicated to the audit that since the Black Sand Commodities Company is affiliated to SUEK AG and functions as one of its subsidiaries, there is a need for separate registration as far as this procurement is concerned. SUEK AG is a registered company for the supply of coal for the Norochcholai coal power plant.
The audit, however, revealed that the Black Sand Commodities Company is not a company registered under SUEK AG and there is no direct relationship between these two entities.
The audit has also revealed that this company was established on May 31, 2022, as a company incorporated in the United Arab Emirates on June 01, 2022, after passing a resolution by LC Suek, Ltd. (Russia).
The audit has also shown that the bid submitted by the Black Sand Commodities Company was accepted by the Ministry of Power and Energy regardless of the said inadequacies.
The audit office also points out that the bids received from unregistered suppliers could have been treated as unqualified bids.
In relation to the procurement, a strong and sensitive amendment had been made to the tender documents on August 03, 2022, and the suppliers were notified on August 05, about six days prior to the opening of the bids, of the new conditions included in the tender document.
In the circumstances, the audit office points out that there was hardly any time for bidders to submit their bids to create healthy competition.
However, the said procurement was cancelled by the Cabinet of Ministers on September 22, 2022, as the aforesaid supplier had not been able to submit a performance bond.
