The Auditor General’s Department disclosed that the government faced an additional cost of Rs. 1,139 billion during the economic crisis last year due to the cancellation of a term tender and the import of Liquefied Petroleum Gas (LPG) at elevated rates. This information was revealed in a special audit report focused on the procurement of liquefied petroleum gas by Litro Gas Lanka Ltd for the years 2022 and 2023.
The report highlights that despite obtaining Cabinet of Ministers’ approval to award the LP gas tender to the lowest bidder, Singapore-based Siam Gas Trading Pte Ltd., subsequent actions led to initiating a new procurement process at a higher rate.
The government, therefore, ended up paying a premium for the purchase of liquefied petroleum gas, even amid an economic crisis, according to the Auditor General’s Department.
The Technical Evaluation Committee recommended on April 26, 2022, that Siam Gas Trading, the lowest bidder, should be the qualified supplier for the 2022-2023 period. The Procurement Committee also approved this recommendation on April 28, 2022.
On May 04, 2022, the Cabinet of Ministers sanctioned the selection of Siam Gas Trading as the LP gas supplier for the specified period.
Despite the Board of Appeal’s consent to award the procurement to Siam Gas Trading following an appeal by the previous supplier OQ Trading Ltd., a new procurement process was initiated per the Cabinet Decision on June 13, 2022. During this period, gas was purchased from OQ Trading Ltd. at a price exceeding that of Siam Gas Trading (CP+ $96), even though there was no formal methodology for Sri Lanka to purchase gas since March 2022.
The report revealed that despite selecting Siam Gas Trading, the term procurement was canceled, and the government incurred an additional expenditure of USD 3,145,960 (equivalent to Rs. 1,138,837,430 in total) due to the purchase of gas from OQ Trading Ltd. at a higher price, amid the economic crisis.
