Rs. 15 billion worth imported rice procured sans tender process

By Lanka Sathosa during previous govt.

by Suresh Perera

In a shocking revelation, Lanka Sathosa – the state-run venture now in the red – had imported 261,474 metric tons of four slow-moving varieties of rice worth more than Rs. 15 billion mostly on regular instructions of the Treasury during the tail end of the previous regime, without calling for open tenders, trade officials said last week.

Under credit facilities from the People’s Bank and Bank of Ceylon, 236,000 metric tons had been procured from United Food of India, Trident Champer (India), OMVISHKAR (India), ACP Industries (India) and G2G Bangladesh from September to November 2014.

In addition, another 25,474 metric tons had also been purchased directly from many other Indian companies on another credit facility during this specific period, the officials said.

What defies belief is that stocks valued at Rs. 15.38 billion had been procured without adhering to the accepted tender procedure, they noted. "There had been no market survey done either to ascertain whether imported rice was the need of the hour at that point of time".

Substantial unsold stocks of white, ponni, parboiled and nadu rice are being stacked in warehouses for which millions of rupees have to be paid as rent, the officials said.

"This was a severe drain on the resources of Lanka Sathosa, which is now facing a critical financial crisis with outstanding debts amounting to Rs. 10 billion to the two state banks", they said.

No inquiry has been initiated so far to ascertain why such enormous consignments of rice were imported at tremendous cost when such wasteful expenditure was one of the key reasons Lanka Sathosa is now buckling under the weight of its mounting debts, they asserted.

Scores of suppliers are also still waiting for their outstanding payments as the possibility of the government infusing funds to bail out the institution, which has 3,000 plus employees, is being pursued, they noted.