Underhand gas deals cost govt. additional Rs 1.138 bn

A state audit has revealed Sri Lanka had to bear an additional cost of Rs. 1,139 bn last year due to cancellation of the term tender and importing Liquefied Petroleum Gas (LPG) at higher rates.

The Auditor General’s report dealt with the procurement of LPG by the government supplier Litro Gas Lanka Ltd for 2022 and 2023.

The report has pointed out that in spite of having cabinet approval to procure LPG from the lowest bidder namely the Singapore-based Siam Gas Trading Pte Ltd., authorities launched a fresh procurement process meant to buy LPG at a higher rate.

The government offered the tender to a higher bidder regardless of the Technical Evaluation Committee (TEC) and the Procurement Committee on April 26, 2022 and April 28, 2022, respectively having picked Siam Gas Trading.

This issue was also taken up at the Committee on Public Enterprises (COPE).

However, despite the approvals so given, it had been decided to commence a new procurement process following the Cabinet decision dated June 13, 2022.

The report revealed that the term procurement had been cancelled despite Siam Gas Trading having being selected, and, as gas had been purchased from OQ Trading Ltd. at a higher price, the government had incurred an additional expenditure of USD 3,145,960 (equivalent to Rs. 1,138,837,430 in total) amidst the economic crisis.