COPE directs Auditor General to probe Litro tenders

The Parliamentary Committee on Public Enterprises (COPE) Chairman MP, Prof. Charitha Herath told the Auditor General’s (AG’s) Department to probe how the Litro Gas company deviated to purchase 100,000 MT of gas from an Oman Company at a cost of USD 129 per metric tonne by cancelling the Cabinet Approved Term Tender to purchase gas from Singapore’s Siam Gas Trading Pte Limited at a cost of US$ 96 per metric tonne.

This was informed when the heads and officials of the Litro Gas Lanka Limited, Litro Gas Terminal Lanka and the Sri Lanka Insurance Corporation (SLIC) which is the parent company of the Litro Gas Lanka Limited were present before the COPE for the second time on Tuesday (5).

It was revealed before the Committee that tenders had been called to import 280,000 metric tonnes of gas somewhere in February this year and three bidders including these two companies had presented bids. Accordingly, the Cabinet had approved to offer the tender to the Siam Company which had presented the lowest bid.

However, the Litro representatives had stated to the COPE that the offer could not be executed due to the failure of the local banks to issue a Standby Letter of Credit (SBLC) amidst the present economic crisis.

The representatives had also pointed out that the discussions on emergency purchase of 15,000 MT of gas from the same company as a temporary solution to address the gas shortage was also not successful. Accordingly, it was later agreed to cancel the offer given to the Singaporean Company and purchase 100, 000 MT of gas at a cost of US$ 129 each from the Oman bidder within a period of four months. The Cabinet of Ministers has approved this move, they said.

A total of US$ 90 million with the contribution of US$ 70 million from the World Bank and US$ 20 million by the Litro Company itself will be spent to purchase gas from this Oman Company.

Accordingly, the COPE Chief informed the AG’s Department to conduct an investigation into this matter and reveal if the funds given by the World Bank were used effectively.

The COPE also paid its attention to the failure of the Litro Company to utilize the amount of US$ 160 million under the Indian Credit Line dedicated to purchase gas. The Chairman also recommended the Finance Ministry Secretary to look into the matter and report facts immediately within two weeks.

Meanwhile, the COPE also recommended the Finance Ministry Secretary to take steps to include the representatives of the parent company to the Board of Directors of the Litro Gas Lanka Limited of which the full membership is five.

Deputy Secretary to the Treasury Saman Fernando for the Secretary to the Ministry of Finance, former Litro Chairman and present SLIC Chairman Vijitha Herath, Litro Chairman Muditha Peiris and the officials had been convened before the COPE on Tuesday while former Litro Chairman Theshara Jayawardena joined the meeting online.

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