The Sunday Leader

Ukrainian ‘Controversial Co.’ Selected Again To Supply Army Equipment

by Nirmala Kannangara

  • The selected bidder, the Ukrinmash, is now under investigation
  • It is alleged that Udayanga Weeratunge had obtained commissions from Ukrinmash to offer the tender
  • There wasn’t any urgency to give a short bidding period as this has never happened before

The bidding document that says that the bidder should possess higher standard of ethics and The bidding document that says that the equipment should be delivered within one month from signing the agreement

Despite of the ongoing investigations by the Financial Crimes Investigation Division (FCID) against the MiG 27 aircraft deal, questions have been raised as to why Lanka Logistics and Technologies Limited had selected the same Ukrainian Company that was involved in the controversial deal to supply armoured personnel carriers, spare parts to overhaul existing armoured vehicles and demining and explosive disposal equipment to the Sri Lanka Army.

The role of Lanka Logistics and Technologies, in which the Defence Secretary is a prominent member, is to call for tenders to purchase defence items for the Armed Force and the Police Department with the approval of the relevant Ministries. Although proper procurement guidelines have to be followed by Lanka Logistics and Technologies Limited when purchasing these defence items, controversy surrounds the move by Lanka Logistics and Sri Lanka Army to award the tender to Ukrinmash to supply BTR 80 Armed Personnel Carriers (APC), spare parts to overhaul the existing BTR 80 APCs and demining and explosive disposal equipment to Sri Lanka Army.

According to the bidding documents, the purchaser – Sri Lanka Army – requires the bidders/ suppliers/ contractors/ consultants to observe the highest standard of ethics during the procurement and execution of such contracts. It is a disqualification for the bidder to offer, give, receive or solicit, directly or indirectly of anything of value to influence the action of a public official in the procurement process.

However the selected bidder, the Ukrinmash is now under investigation into their alleged involvement with the former Sri Lankan Ambassador to Russia, Udayanga Weeratunge, in the MiG 27 deal. It is also alleged that the latter is now in Ukraine absconding the Interpol, and is still working hand in glove with Ukrinmash and is having a hand to the latest tender as well. In such circumstances, it is questionable as to why Lanka Logistics and Technologies Limited (LLTL) and Sri Lanka Army (SLA) want to award the tender to Ukrinmash although the company does not have the highest standard of ethics.

It is learnt that only Ukrinmash and BSVT Limited had sent their quotations for the said tender but not any other international competitive bidders, believed to be because of lack of bidding time period. It is understood that the latter had submitted quotations only for a few items hence he had been rejected.

“It is alleged that Udayanga Weeratunge had obtained commissions from Ukrinmash to offer the tender to supply MiG 27 aircraft to SLA. In such a background what made SLA and LLTL to select Ukrinmash to award the tender although the bidder does not have the highest standard of ethics the purchaser is looking out for in the budding document,” highly reliable LLTL sources said.

The sources, who wished to remain anonymous, further accused LLTL and SLA for not giving enough time to other international competitive bidders to bid for the same tender. “It is the general practice to give either 45 days or more than that for the international competitive bidders to send their bids. Bypassing the normal procurement guidelines, the LLTL gave only 21 days for the bidders to bid to supply 14 BTR 80 APCs, spare parts to overhaul the existing BTR APCs and demining and explosive ordinance disposal equipment. How can international competitive bidders send their quotations within such a short period as they need time to make the non refundable payment from their respective countries and send the payment slip to LLTL, obtain the tender documents and do the necessity within 21 days? We believe, LLTL and SLA had kept Ukrinmash informed of the tender, well before tenders were called, for them to get ready to send their quotations,” sources alleged.

Tenders for these supplies had been called on September 12, 2016 and was closed on October 3, 2016 giving only a 21-day bidding time for the international competitive bidders.

According to the tender document, the items have to be supplied to SLA within 30 days from signing the contract which is impossible unless the party that got the contract has made all arrangements to ship the consignment by the time the contract was signed.

According to the sources, there wasn’t any urgency to give a short bidding period as this has never happened even during the war and accused LLTL and SLA officials for their alleged plan to prevent other international bidders from bidding other than the ‘notorious dealer’ Ukrinmash.

“These vehicles are manufactured in Russia and they too would have sent their bids had they were given enough time. Although LLTL and SLA is making all attempts to offer the tender to Ukrinmash, they will not be able to get the manufacturer authorization certificate which is from Russia, as specified in the bidding document. Russia has imposed an embargo towards Ukraine and because of the existing embargo, Ukrinmash is considering supplying BTR APCs from Hungary to which Russia will come forward and block the deal,” sources added.

The sources further queried as to why attempts are made to award the tender to a Ukrainian company when there is a Russian credit line worth US $ 400 million, which could have been used to purchase the BTR 80 APSs, spare parts for armoured APCs (Russian origin) and demining and explosive disposal equipment for the combat convoy battalion to be deployed in Mali.

Meanwhile it is learnt how Ukrinmash had got their defence supply office established in Borella at the same address where their local agent Senka Aero International Pvt. Limited is housed at No. 16, (upper floor) Elliot Place, Borella, Colombo 8.

“When Ukrinmash applied to open their defence supply office in Colombo and wanted to register it under Registrar of Companies, the latter had referred the application for clarification from the Sri Lankan Ambassador to Russia who was overlooking the Ukraine affairs from Moscow, whether it can be registered as a trading company in Sri Lanka. The Ambassador had advised the Company Registrar not to register it in Sri Lanka as it is a Ukraine defence supply company. Later when the Ambassador to Turkey was appointed to overlook Ukraine affairs, the Company Registrar has once again had forwarded the rejected application to the Sri Lankan Ambassador to Turkey to which the clearance had been given. As a result, Ukrinmash Defence Supplies Office was established in Borella alleged to be without the Defence Ministry approval.

Meanwhile, highly reliable sources from Defence authorities said that a certain high ranking official had queried as to why there is a plan to award the tender to Ukrinmash that was involved in the MiG 27 deal, although the decision taken to offer the tender to overhaul three Antonov aircraft at Sri Lanka Air Force had been stopped and another tender had been recalled to invite prospective bidders. “In addition, on the request of the higher official, Sri Lanka Air Force has stopped their proposed plan to award the tender to Ukrinmash to overhaul three MI 24 helicopter gunships and to sell the unserviceable helicopters to the same company. Although Sri Lanka Air Force abided by the instructions, it is surprising as to why LLTL and SLA are yet to abide by the higher authority instructions,” sources added.

According to the bidding document for the procurement of spares for APCs the bidder has to supply spare parts to refurbish ten BTR 80/ 80A  APCs, one BREM-K (Recovery vehicle), maintenance spare parts for ten BTR 80/80A and one BREM-K (for 18 months), buffer stocks for ten BTR 80/80A and one BREM-K, communication maintenance spare parts to refurbish eleven BTR 80/80 A BREM-K APCs, communication maintenance spare parts (buffer stocks) for eleven APCs and requirement of Vehicle Mounted GPS.

For the procurement of demining and explosive ordinance disposal equipment, SLA was to purchase ten hand held Ground Penetrating Radars (GPR), five hand held cable detectors, three large loop detectors, five comprehensive hook and line kits, seven spotting scopes, five digital camera sets, twelve handheld metal detectors, three search tool kits, five Explosive Tool Boxes (ETB), one remote control bomb disposal equipment, three portable handheld searchlights, three forensic evidence collection kits, three EOD suit and helmets, three EOD suit gloves, three EOD communication systems, three cooling systems (Bomb Suit), three vehicle access kits, one light weight Improvised Explosive Device Disposal (IEDD) tripod, one real time portable x-ray system, one medium disruptor including stand and ammo 200 rounds, one large disrupter/disarmer including stand and ammo 200 rounds, one needle (small) disrupter with stand and ammo 200 rounds, two firing cables 300m on Reel (500m), one mine/metal detector, two cable locators, one explosive identification kit, one fibre scope kit and one ranging binoculars.

Meanwhile when contacted Defence Secretary Karunasena Hettiarachchi to find out as to why LLTL had selected Ukrinmash as the successful bidder when there is an impending query in the MiG deal, the Defence Secretary said that the tenders have not been offered to any party as yet.

“Yes we called tenders to supply certain defence items to the armed forces but since we want a financial support we have not yet offered the tender.

When asked whether Ukrinmash had sent their quotations and if so whether they will be awarded the tender, Hettiarachchi said that they are not happy with Ukrinmash as the quality of the goods they are supplying is not up to the standard.

When contacted Army Commander Lt. Gen Chrishantha de Silva as to why Ukrinmash was selected to award the tender, the Army Commander wanted this newspaper to speak to Lanka Logistics and Technologies Limited to get the details. “I cannot make any comment as making a statement is beyond my authority. You have to contact either LLTL or the Ministry of Defence to get a comment on this matter,” the Army Commander said.

However, Chief Executive Officer LLTL, Lalith Liyanage said that the matter is under evaluation and cannot make any comment as it is highly confidential. “These are highly confidential matters and I cannot make any comment. At the moment I am at a meeting and call me in one hour’s time,” Liyanage said.

When asked as to why a shorter bidding time frame was given and whether it was a pre-planned decision, Liyanage said that there was an urgency to send them to Mali in Africa for the combat convoy battalion to be deployed. “We got all the approvals from all respective departments to call tenders giving a shorter bidding time,” Liyanage claimed.

All attempts taken thereafter to contact Lalith Liyanage to get more details into tender were not successful as Liyanage did not answer his mobile phone.

1 Comment for “Ukrainian ‘Controversial Co.’ Selected Again To Supply Army Equipment”

  1. gamarala

    Ukrinmash provides best ‘palm oil’ hence the selection.

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