The company that was awarded the tender to supply crude oil to Sri Lanka for a period of four months has failed to supply the consignment as contracted.
However, it has moved to supply crude oil through a third party without any permission whatsoever, and the Ceylon Petroleum Corporation, with no covering approval, has unloaded the stock, allegedly violating all accepted guidelines.
The unloading of this stock has been carried out despite objections raised by the Attorney General and the Cabinet-appointed procurement committee.
In the meantime, the Ministry of Energy is making an attempt to change the procurement agreement and has sought the approval of the Cabinet of Ministers to change the original agreement to a tripartite agreement.
Highly placed sources disclosed that, on December 19, 2022, the Cabinet approved three shipments of Russian crude oil to Coral Energy DMCC of the United Arab Emirates for a period of 4 months from January 1, 2023, to April 30, 2023.
Accordingly, the first crude oil shipment was scheduled to arrive on March 6 and 7, as per the agreement, but the ship apparently delayed the arrival till March 25, deviating from the original date as per the agreement.
However, the crude oil consignment was not provided by the company to which the tender was awarded but by another company called Pontus Trading in Dubai.
The company in question has no legal authority to supply petroleum to Sri Lanka, and the authorities have pointed out that it was illegal to obtain crude oil supply from a third party outside the original agreement, but the recipient, Ceylon Petroleum Corporation, highlighting the needs such as the shortage of oil in the Sapugaskanda oil refinery and an imminent fuel crisis in the country, has directed the consignment of oil to its storage tanks.
However, two or three days before the arrival of the ship, Coral Energy Company, which secured the tender to supply crude oil stock, requested that the relevant authorities approve the supply of crude oil by Pontus Company. However, this has not been approved so far due to possible legal snags in the process.
The procurement committee appointed by the Cabinet has vehemently objected to the supply of crude oil by a company other than Coral Energy Company of the United Arab Emirates, the bidder who won the tender.
The Attorney General has also opined that the procurement committee does not have any authority to grant approval for such shipments.
Accordingly, the Special Procurement Committee appointed by the Cabinet has emphasized that it cannot approve the purchase of supplies from other parties unrelated to the tender apart from the original company approved by it.
Also, it is reported that this Special Standing Procurement Committee has emphasized to the Petroleum Corporation that it has to adhere to the norms and exercise extreme caution in the management of procurement contracts, and utmost care should be taken in drafting the tender conditions so as to avoid operational disruption in contract management.
In the present circumstances, the petroleum corporation has requested the approval of the Cabinet of Ministers to sign a tripartite agreement with the company that supplied the crude oil to Sri Lanka and the company that was initially awarded the tender, subject to the opinion of the Attorney General.
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