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Chinese fertiliser shipment : Govt. moots chemical fertiliser compensation

7 months ago

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  • Agriculture Ministry holds discussions with Chinese company
  • Aminopeptide chemical fertiliser sought from Qingdao Seawin
  By Maheesha Mudugamuwa   Sri Lanka is exploring the possibility of obtaining chemical fertiliser as compensation for the losses incurred by the State due to the controversial organic fertiliser deal with a Chinese company last year, The Sunday Morning learns. It is learnt that discussions are underway between China’s Qingdao Seawin Biotech Group Co., Ltd. and Sri Lanka’s Agriculture Ministry to obtain aminopeptide chemical fertiliser to compensate for the loss of $ 6.9 million from the deal that went awry. Speaking to The Sunday Morning, Agriculture Ministry Secretary Rohana Pushpakumara said the advice from the Attorney General’s (AG’s) Department had been to act as per the instructions of the Cabinet, and that therefore the Ministry had already forwarded a Cabinet paper to obtain its advice. Secretary Pushpakumara confirmed that discussions were being held with the Chinese fertiliser company. “Earlier, they agreed to provide us chemical fertiliser for part of the transaction, but we are trying to obtain the chemical fertiliser they have for the full amount,” he said, adding that there would be no issues regarding the quality of the fertiliser as the product was not an organic fertiliser. “We have already communicated this to the Cabinet,” Pushpakumara said. He added that even though the Ministry could act upon the settlement agreement, it had sought instructions from the Cabinet to avoid any issues in the future. Last week, Opposition Leader Sajith Premadasa also called on the Government to enact the recommendation made by the AG’s Department on the matter.  In November 2021, the Sri Lankan Government rejected a consignment of organic fertiliser from China’s Qingdao Seawin Biotech Group Co., Ltd. citing quality issues – a claim the firm disputed – demanding third-party tests. Thereafter, the Government paid $ 6.9 million to the Chinese fertiliser company. However, the Agriculture Minister informed Parliament last week that the AG had advised on recovering the losses from the organic chemical fertiliser procurement. He said that a committee headed by the Secretary to the Ministry and that the Attorney General had also advised on a course of action. The Minister further said that efforts to obtain a refund or a consignment of chemical fertiliser in place of the money had proved futile. Nevertheless, the Ministry Secretary stressed that there had been no committee appointed for the purpose but that a Cabinet paper had been submitted. The shipment was rejected by Sri Lanka while en route to the island following claims of quality issues. Sri Lanka’s National Plant Quarantine Service (NPQS) had claimed that samples of the fertiliser contained harmful bacteria, prompting the Chinese company to demand $ 8 million from the agency in early November. The Chinese company subsequently sought arbitration in Singapore and Sri Lanka later decided to settle the matter by paying $ 6.9 million to the fertiliser company, on terms purportedly agreeable to both parties. Sri Lanka’s State-run People’s Bank made the payment through a Letter of Credit it had issued, after a Court Order barring the lender had been removed. Meanwhile, when The Sunday Morning sought a response from the Chinese Embassy in Colombo, the spokesperson declined to comment, saying that he was not in a position to do so, adding: “It’s a commercial dispute between a private Chinese company with a high qualification on the Sri Lankan side. They’re negotiating according to the contracts and international business practices.”  

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