The Government had to bear an additional cost of Rs. 1.139 billion (Bn) amidst the economic crisis last year (2023) due to the cancellation of the term tender and importing liquefied petroleum gas (LPG) at a higher rate, the Auditor General’s (AG) Department revealed.
This was mentioned in a special audit report compiled on the procurement of LPG by Litro Gas Lanka Limited for the years 2022 and 2023.
The report indicates that despite having obtained the approval of the Cabinet of Ministers to grant the LPG tender to the lowest bidder, the Singapore-based Siam Gas Trading Pte. Ltd., steps had been taken to commence a new procurement process to buy gas at a higher rate. Accordingly, the Government had to pay a higher rate for the purchase of LPG, even in the face of an economic crisis, the AG’s Department alleged.
The Technical Evaluation Committee had recommended on 26 April 2022 that Siam Gas Trading should be the supplier qualified for the 2022-2023 period. The Procurement Committee also approved this on 28 April 2022. Later, on 4 May 2022, the Cabinet gave the nod to select Siam Gas Trading as the LPG supplier for the aforementioned period.
The report says that the Board of Appeal, having considered the appeal made by the previous supplier OQ Trading Ltd. against the selection, had given its consent to award the procurement to Siam Gas Trading. However, despite the approvals so given, it had been decided to commence a new procurement process following the cabinet decision dated 13 June 2022, whilst LPG was being purchased from OQ Trading Ltd. at a price exceeding that of Siam Gas Trading (the Saudi Aramco contract price plus United States dollars [$] 96) irrespective of the lack of a formal methodology for Sri Lanka to purchase LPG since March 2022.
The report revealed that the term procurement had been cancelled despite Siam Gas Trading having being selected, and as LPG had been purchased from OQ Trading Ltd. at a higher price, the Government had incurred an additional expenditure of US $ 3,145,960 (equivalent to Rs. 1,138,837,430) amidst the economic crisis.