News

Ex-Litro Chair defends 2020 tender award

  • Claims allegation of Rs. 10 b loss only in current Chair’s imagination
  • Selected firm deemed lowest evaluated, substantially responsive bidder
  • High-level Litro officials note mysterious ‘massive jump’ in price in 2020 from previous years

BY Pamodi Waravita

Former Litro Gas Lanka Ltd. Chairman Anil Koswatte has stated that a stringent liquefied petroleum gas (LPG) procurement process was followed during his time and that claims of a Rs. 10 billion loss in that period, as alleged by current Litro Gas Lanka Chairman Theshara Jayasinghe, are only in the latter’s “mind”.

“The clearly set protocols don’t allow for any manoeuvring or strong arm tactics as alleged by Jayasinghe. The Rs. 10 billion loss he refers to, mentioning an imaginary ‘mafia-styled’ operation, seems to exist only in his mind and that of those trying to bring disrepute to Litro,” said Koswatte.

Koswatte said this in a letter to Ministry of Finance and Treasury Secretary S.R. Attygalle, requesting that an investigation be conducted into the aforementioned allegations.

The cabinet memorandum dated 31 January 2020, attached to Koswatte’s letter, notes that during the procurement process that was held, 10 companies had collected bidding documents, from which four (Vitol Asia PTE Ltd., Slogal Energy DMCC, Iwon International FZE, and Oman Trading International Ltd.) had submitted them.

However, the first three companies had been disqualified due to three respective reasons, which had led to the tender being granted to Oman Trading International. The justification states that Oman Trading International is the “lowest evaluated, substantially responsive bidder”.

Current Chairman Jayasinghe, on 5 November, claimed that the “gas mafia” only allows one supplier to bid to supply to the local market. Jayasinghe said: “There are many types of mafias that operate in this country. There is a mafia that is controlling the gas market. They don’t allow others to enter our market; only one supplier is allowed to bid. Over the last 10 years, you can see that only one supplier has been allowed to supply to the local market. These thieves don’t allow anyone else to enter the market.

“From 28 October to 1 November 2021, we could not supply LPG to the local market; we had to close our plant on 28 October because we didn’t have any gas to sell. The reason was that the vessel carrying LPG from the supplier refused to unload and threatened that they wouldn’t supply LPG if we didn’t extend the existing contract for another two years. The public should be made aware of this.”

Jayasinghe claimed that parties with vested interests wanted Litro Gas Lanka to extend its supplier contract from 2022 to 2024, adding: “If we extend this contract, the country will lose approximately Rs. 10 billion.”

Meanwhile, high-ranking officials at Litro Gas Lanka told The Morning yesterday (8) that the “contract price plus value”, which accounts for insurance and premium charges, faced a “massive jump” in 2020 to a value of $ 106 when it was just $ 68 in 2019. “Why was the price raised so high? In 2005, it was only $ 45. And since 2005, they have always been one-year contracts,” noted an official.

The Sunday Morning reported on Sunday (7) that a new tender will be floated this month for the supply of LPG in 2020.