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Sri Lanka minister calls for Presidential Commission on SOE coal deals

ECONOMYNEXT – A cabinet minister has called for a Presidential Commission of Inquiry into alleged scams in coal deals in Sri Lanka running in to hundreds of millions of dollars by a state firm, on which questions have already been raised by the Auditor General.

"I am asking the President to appoint a commission of inquiry to go into coal procurements from 2009 to 2016," Minister of Megapolis Patali Ranawaka, who was an ex-minister of power said in Colombo.

"A number of people had benefited from these deals, like the bondscam. The auditor general had already issued a report.

"How were many tenders systematically cancelled for the benefit of one party?

"It should also inquire into the role played by official and unofficial representatives in elections."

The call comes amid allegations that Perpetual Treasuries, a firm involved in what is touted as Sri Lanka’s largest securities fraud, had paid off many members of the elected ruling class.

Sri Lanka’s Auditor General had issued a report going into a series of coal procurement contracts by Lanka Coal Company, a state firm incorporated not as a corporation by an act of parliament but as a private company under the company’s act to buy coal as supply the Ceylon Electricity Board.

In recent years the practice of setting up state firms willy-nilly had become ‘normalized’ critics have said.

The Auditor General said "Lanka Coal Company arrogated to itself certain functions assigned to other Public Institutions by Parliamentary Acts, in its objectives thus covering a scope much wider than the objectives of the establishment of the Company."

The AG questioned the very requirement of operating such a company.





"It is concluded that the Lanka Coal Company Ltd., related to the purchase of coal was not proved as an essential institution that should act to ensure the least cost and least risk to the Government and as such the relevant parties should carry out an extensive study as to whether this institutions should be maintained any longer," the AG said.

The state auditor said Lanka Coal had entered into agreements without getting legal clearance with the Attorney General.

The Auditor General said bidding documents had been modified a number of times but bidders were sometimes not informed in time.

"A file of data on the Bidders who obtain Bidding Documents and the confirmation of the acknowledgement of the modifications to the Bidding Documents and others dispatched / communicated to the parties concerned should be obtained," he said.

Coal transport had meanwhile been given to Ceylon Shipping Corporation another state company. Coal had also been bought from the state company without tendering at time. (Colombo/June14/2018)

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