The Sunday Leader

Billion-Rupee Rice Racket Revealed

by Hafsa Sabry

Rice stocks stored at Veyangoda were unsuitable for human consumption

Ceylinco Insurance has refused to sanction compensation for the loss incurred by Lanka Sathosa in the importation of 100,000 metric tons of rice. The said stock is under scrutiny as it is believed to be part of a racket in connection with the ongoing probe into 300 containers of rice gone missing and found unsuitable for human consumption.

It was revealed that one of the state institutions of Sri Lanka that deals with the public funds had allegedly used Rs. 15 billion in violation of the cabinet papers.

The visit to the Colombo Port by the officers of the Presidential Commission of Inquiry into Large Scale Acts of Fraud and Corruption recently has exposed certain incidents that had taken place at Lanka Sathosa. The visit had revealed that nearly 100,000 metric tons of rice was stored carelessly causing losses amounting to millions of rupees to the government.

During the probe on the alleged racket on rice importation, the Commission officials had found that rice stocks stored at Veyangoda were unsuitable for human consumption as they were rotten and had been stored at the Colombo Port and unsuitable warehouses for a longer period without a proper management.

Lanka Sathosa had received approval to import only 60,000 metric tons of rice, but the authority with no consideration to the approval and the cabinet paper had imported 250,000 metric tons of ‘Ponni’ and ‘Nadu’ rice. “Now, this has caused another loss of destroying the rotten stock”, said the Secretary to the Presidential Commission of Inquiry into Large Scale Corruption and Fraud, Lacille de Silva.  In addition to the violation of the clauses in the cabinet paper, the stock of rice was imported in violation of the government tender procedures. Without adhering to proper procedures, the tender was awarded to ACD Enterprises India as a special supplier. Reports also revealed that after getting port clearance, some of the stock of rice were stored in a private warehouse belonging to Liverpool Navigation Ltd, and not at the Lanka Sathosa warehouses while, 99% of the transportation was also carried out by the same private sector in violation to the tender procedures. Rs. 15 billion had been paid for the transportation by Lak Sathosa to the private sector.

The reasons why the Ceylinco Insurance refused to pay compensation for the rotten stock of rice was due to the alleged mismanagement of Lanka Sathosa, but the conditions on why Ceylinco refused is yet to be revealed as the relevant authorities denied to respond to queries by The Sunday Leader.

Lanka Sathosa said they are not competent enough to answer any questions on this issue as the Ministry of Industry and Commerce had the authority to deal with it. Reliable sources from the Lanka Sathosa said since the political influence is involved in the rice importation and the ongoing probe, they would not comment on the issue.

The Secretary to the Ministry of Industry and Commerce, T. M. B. K. Tennakoon said information on the issue will be revealed in a press conference which will be held if necessary, and the media should talk to Lanka Sathosa if there is an issue with their management and not the ministry.

The Sunday Leader contacted Ceylinco Insurance to question as to why they had refused to pay the compensation. Responding they said they had already informed the Lanka Sathosa of the conditions why the claim was rejected hence the media should refer to the letter that was sent to the authority. “Since it is a rejected claim we are unable to answer any of the questions”, added Ceylinco Insurance.

Meanwhile, Secretary to the Presidential Commission told The Sunday Leader that a large amount of public money is being allegedly wasted by the Lanka Sathosa officials. Some of the officials from the management had already been transferred and removed from the top positions and some others who are allegedly involved in the corruption will also be discharged without delay.

Lanka Sathosa had the approval to import only 60,000 metric tons of rice but they had allegedly imported 250,000 metric tons which were completely forgotten and laid at the port and some of the warehouses causing a huge loss to the government and a waste of public funds, he said.

When the authorities were questioned over the irregularities and the alleged misuse of public funds, they refused to respond, but tried to engage in a blame game. The stock however was claimed to be left in the port without storing them in a proper warehouse of Lanka Sathosa.

Nevertheless, the letter of credit issued during the final stages of the Rajapaksa regime to import 100,000 metric tons expired and was made valid by the present government on February 25, 2015. About 800 container-loads that had been imported without basis had remained at the Colombo Port for nine months, from February 29, 2015 to January 2016. By the time the rice was cleared, the entire consignment had become unfit for consumption.


1 Comment for “Billion-Rupee Rice Racket Revealed”

  1. Bhathiya

    It is the inefficiency of Minister Ranathunga who could not clear the stock on time. Now he can give the contract to Sirisena family.

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