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Mineral tender
bender
By
Frederica Jansz
The Sub Committee on Tenders led by Finance Minister K.
N. Choksy at the request of Environment
and Natural Resources Minister Rukman Senanayake has unearthed a
scandalous attempt by another government minister to favour two
companies when recommending the award of a tender for the selling of
mineral sands.
The
suspect minister together with the chairman and general manager
of a state owned institution have engaged
in a game of what appears to be wheeler dealing to
suit a local business magnate, depriving the state of millions of rupees
as they collectively used a natural resource in Sri Lanka for reasons
best known to themselves.
The minister in question, Rauf Hakeem,
on April 1 this year submitted a cabinet memorandum on the selling of
mineral sands by Lanka Mineral Sands Ltd. (LMSL) for local processing
and value addition.
Hakeem is minister for port
development, shipping as well as for eastern development and Muslim
religious affairs. Lanka Mineral Sands Limited
is governed by the Eastern Development and Muslim Religious
Affairs Ministry. LMSLis a
fully government owned company. The
functions of the company are to do mining, separation, refining and
preparation of mineral sands. The processing plant of the company is
located in Pulmuddai in the eastern coast.
Not
tendered
In his cabinet paper on April 1, Hakeem
introduced two companies, namely, Alchemy Heavy Metals Pvt. Ltd. (AHMPL)
and its sister company Alchemy Boulders Pvt. Ltd. (ABPL), the former of
which had not even tendered for the sale of 60,000 tonnes of crude
zircon.
In this cabinet memorandum, Hakeem also
stated that 60,000 metric tonnes of crude zircon is to be awarded to
Wheels Lanka Pvt. Ltd. (WLPL) in terms of the recommendations made by a
Cabinet Appointed Tender Board (CATB).
What is stupendously shocking in this
instance is that Hakeem has approved this award to the three companies
which have
one single individual as chairman — namely T. L. M. Nawash. We
repeat that one of Nawash’s companies — Alchemy Heavy Metals Ltd.
never even submitted a bid when this tender was called, but was yet
nominated by Hakeem to buy 90,000 metric tonnes
of crude zircon from LMSL.
Hakeem’s manoeuvre has been done in
association with a close friend and confidant, Muhammad Nassar, who was
appointed chairman, Lanka
Mineral Sands Limited by Hakeem.
Documentary evidence in the possession
of The Sunday Leader proves that Nassar has illegally sold 8000
metric tonnes of crude zircon sand to eight different companies — six
of which are international companies without following proper government
tender procedure. (See box
for details)
According to Nassar’s own admission
he did so with full Ministry approval.
Even in this instance, Nassar is
alleged to have influenced the Technical Evaluation Committee (TEC) to
favour Wheels Lanka, Alchemy Heavy Metals and its sister company Alchemy
Boulders.
There has been a rapid growth recently
in zircon demand as a component of glass used in television and computer
monitor tubes. Similarly, the use of zircon as a feedstock for the
production of zirconia and zirconium chemicals has also increased
rapidly, particularly in the last five years.
Rapid
growth
The use of zircon for glazes on ceramic
items such as floor and wall tiles, sanitary-ware and tableware,
accounts for almost 50% of total zircon consumption and has been the
most rapidly growing end-user over the last two decades.
If this tender is awarded, the sale of
the mineral sands to these three local companies will result in a multi
million rupee loss for the government.
Depending on the quality of the crude
zircon, international market prices for the mineral vary.
If 150,000 tonnes of crude zircon is sold at approximately US$ 87
per tonne to Nawash, Lanka Mineral Sands would earn only US$ 13.5
million. If on the other
hand this same quantity is sold for US$ 112 per tonne,
the earnings for Lanka Mineral Sands would be in the region of US
$ 16.8 million. The
difference in revenue is over US $ 3 million.
If, Lanka Mineral Sands and Rauf Hakeem
had the commitment to upgrade this crude zircon to a more refined
product they could earn for the state between US$ 350 to US$ 400 per
metric tonne of zircon. (See
box for international market prices)
An attempt by the previous regime to do
just this at Warakapola was stopped by Hakeem when he came into office.
Since then, no attempts have been made by this government to utilise
machinery and equipment owned by Lanka Mineral Sands at Pulmuddai which
can upgrade crude zircon to a more polished variety and thus, be sold at
world market prices.
For example, if 150,000 tonnes of crude
zircon is upgraded by Lanka Mineral Sands they would be left with an
estimated 45,000 tonnes of processed sand. This could be sold for at
least US $ 350 per tonne.
After Hakeem presented his paper to
cabinet, the matter was placed before the Sub-Committee on Tenders and
Budgets. Rukman Senanayake
is a member of this committee as well, and voiced his suspicions
regarding this sale to Finance Minister K. N. Choksy.
Dr. R. M. K. Ratnayake, who is secretary to this
sub committee as well as additional secretary to the Fomamce
Ministry, was later
instructed by Choksy to initiate a full-scale inquiry at the behest of
Rukman Senanayake who suspected foul play.
In-depth
investigation
Dr. Ratnayake
on May 21, requested R. J. De Silva, who is
chairman, Geological Survey and Mines Bureau (GSMB) to conduct an
in-depth investigation.
De Silva’s investigation unearthed a
can of worms. He found that
members of the Technical Evaluation Committee had
fraudulently amended the tender documents without approval from
the CATB or cabinet.
Manipulation
Not just that, but the tender documents
never even carried specifications of the products on offer. It however
demanded that all offers must include an FOB and C & F price. It is
interesting to note how TEC manipulated this tender demand when one of
their favourites quoted without FOB.
In a scathing and very incriminating
report to Dr. Ratnayake handed over on May 27, the GSMB Chief has based
his findings on the file related to this tender that was handed over to
him by Director General , GSMB, Dr. N. P. Wijeynanda. The latter was
a member of the TEC for this sale of mineral sands.
Following his superior’s shocking
findings regarding the tender, Dr. Wijeynanda resigned from his post as
Director General at the bureau on
Friday, June 6.
A curious aspect with this whole sorry
scenario is that the Technical Evaluation Committee consisted of only
two individuals who are technically qualified to evaluate a tender of
this nature. They were Dr. Wijeynanda and General Manager,
Lanka Mineral Sands Ltd, S. A. Nandadeva.
The other two members on TEC were
Additional Secretary, Eastern
Development and Muslim Religious Affairs Ministry, A. C. M. Razik,
and Director, External Resources Department, P. H. Sugathadasa.
Razik was nominated as chairman of TEC despite him possessing no
technical knowledge on mineral sands. Sugathadasa also has no technical
knowledge in this department. Yet, they were both appointed to the TEC.
On November 26, 2002, Muhammad Nassar
in his capacity as Chairman, LMSL, wrote to Dr. Wijeynanda to provide
adequate publicity to the tender. A copy of the tender notice was
supposed to have been sent for circulation among “international tender
organisations.” This in effect means that this notice must be sent to
all embassies and missions abroad. That this was not done
is another serious omission on the part of Lanka Mineral Sands
Ltd. and the Eastern Development and Muslim Religious Affairs Ministry.
The tender advertised in January this
year was for the sale of 60,000 metric tonnes of crude zircon sand,
60,000 metric tonnes of illmenite sand and 1000 metric tonnes
of rutile sand. Ten
offers were received.
The original offer by Alchemy Boulders
Pvt. Ltd., for 60,000 tonnes of crude zircon sand was for US $ 95 FOB
per tonne. Wheels Lanka
Pvt. Ltd. offered for the same quantity US $ 135.12
C& F per tonne while
Shenyan Astron Mining Corporation of China offered US $ 108 FOB per
tonne. These three out of 10 companies offered this price for crude
zircon and illmenite sand. Note
that Wheels Lanka Pvt. Ltd. quoted
US $ 135 C & F for only 30,000 tonnes of crude zircon. This was later increased to 60,000 tonnes and the price
amended to suit Wheels Lanka at an FOB rate.
Breach
of tender procedure
On examination of the schedule there is
a hand written scribble by Dr. Wijeynanda to negotiate with Alchemy
Boulders. De Silva charges
that such negotiation could only include the price and this is a serious
breach of normal tender procedure.
A member of TEC has no authority to recommend to Lanka Mineral
Sands to negotiate prices.
De Silva asserts that both the CATB and
TEC in this instance were in breach of tender procedure by negotiating
with selected tenderers, leaving the other tenderers out. This was done
apparently on the pretext of value addition.
In a letter to the CATB on February 17,
2003, TEC has once more acted strangely by indicating that CATB should
negotiate with Wheels Lanka Pvt. Ltd., and get them to increase their
offer by an additional US $ 1. This
letter also states that if CATB fails to obtain this price they may then
negotiate the price with Shenyan Astron Mining Corporation.
It is pertinent to note here that TEC had by this time already
recommended negotiations with Alchemy Boulders first, whom had made a
lower offer than Shenyan but interestingly is a sister company of Lanka
Wheels.
A confusing aspect of these price
negotiations is that Wheels Lanka Pvt. Ltd. initially quoted US $ 135.12
per tonne, which was C & F. TEC
however determined that they should be told to quote US $ 111.12 FOB and
get them to increase this quote by an additional one dollar.
Wheels Lanka Pvt. Ltd. in their original bid never quoted a price
inclusive of FOB. Later TEC
recommended the award to Wheels Lanka at an undetermined ex factory
price — which in effect would bring down the selling price from US $
112 to maybe US $ 87 which had been the sellers price in the previous
tender. Since the price was
never determined by either TEC or the CATB it is not yet known for how
much Lanka Mineral Sands Ltd. would finally negotiate and sell a total
of 150,000 metric tonnes of crude zircon to Nawash and his conglomerate
of companies.
When we asked Dr. Wijeynanda why this
was done he said the parties concerned were allowed this very lucrative
benefit on the presumption by TEC that “if problems arose with the
LTTE — they (the buyers), would not be able to ship the sand out of
the country and would then need to process the sand in Sri Lanka.”
Processing
plant
Which, according to Dr. Wijeynanda, is
why ABPL and AHMPL were considered (despite the latter not even having
made a bid) due to a supposed processing plant to have been established
by the company at Dambulla.
On February 20, 2003, exactly three
days after TEC had made their recommendations to the CATB, Chairman,
Alchemy Boulders, T. L. M. Nawash, (the strongman behind the three
companies already favoured in this bid) wrote to the Chairman, CATB, P.
W. Seneviratne who is also Secretary, Irrigation Ministry.
In this letter, Nawash informed
Seneviratne that Alchemy has set up a plant and machinery to process
crude zircon and had already purchased 1179 tonnes from Lanka Mineral
Sands. His letter stated
that the plant is situated at Dambulla and that the processing of crude
zircon will be done in two stages.
Our investigation found that Nassar did
in fact sell 1179 tonnes of crude zircon to Nawash at a price of US $ 87
per tonne. All this without
adhering to any form of proper tender procedure.
Later, the General Manager, Sumitomo
Corporation on February 14, this year, in a letter to Nassar strongly
protested against this sale. He
pointed out that Sumitomo Corp. has also participated in this internal
tender (LMS/MKT/TDR/02/01) according to the conditions set forth by LMSL.
However they subsequently found out that Shenyan Astron of China had
been granted 1,628 metric tonnes of zircon instead of 814 metric tonnes,
shipped to Sumitomo and six other buyers.
The Sumitomo GM goes onto state in the
same letter, “we understand that a Sri Lankan trader named Alchemy
Boulders has been offering 1179 metric tonnes of zircon to Chinese
buyers with conditions completely different from the tender conditions.
We are of the opinion that such a contract between LMSL and Alchemy is
unfair and violates the ethics of the tender system.”
Highest
bid
When questioned on this aspect,
Muhammad Nassar said Shenyan had been favoured because they had offered
the highest bid in this instance and so were given a bonus of an
additional 814 metric tonnes. He added that none of the other bidders
including Alchemy Boulders had qualified for this internal tender, but
were granted 814 metric tonnes of crude zircon and in Alchemy’s case
1197 metric tonnes “in order to maintain good relationships.”
On March 4, 2003, S. Dissanayake,
Secretary, Eastern Development and Muslim Religious Affairs Ministry
also wrote a letter. His
letter was addressed to TEC and states that Alchemy Boulders had brought
to the notice of the CATB that they are in the process of establishing a
plant at Dambulla to purify and upgrade crude zircon to premium grade in
collaboration with a Chinese counterpart — namely, M/s Jiangxi Kingan
Hi-Tech Co. Ltd of China.
In what appears to be double quick time
following this letter, the very next day on March 5, a committee
comprising of K. Shanmugalingam, who is additional secretary to
Hakeem’s Ministry, Dr. Wijeynanda and S. Nandadeva, GM for Lanka
Mineral Sands, visited the Alchemy site at Dambulla. Their visit
revealed that the site had yet to receive the required machinery and
processing equipment. We learn that even as late as May this year, the
Dambulla plant belonging to Nawash remained empty of any upgrading and
processing equipment.
On March 19, members of the CATB and
TEC invited Nawash who is chairman of all three companies and one M. S.
M. Ali, who is a director at Alchemy Boulders and discussed the sale.
Nawash had agreed to the TEC price of US $ 112.12 FOB.
However the committee also confirmed to Nawash that the purchase
of crude zircon was to be at an ex-factory price at Pulmuddai which as
we have already pointed out would mean the selling price is much lower.
This was not even determined but left for Lanka Mineral Sands Ltd. to
negotiate after the tender is awarded. And this, Rauf Hakeem, approved
in writing.
Needless to say, that the CATB did not
negotiate or determine the ex-factory price is a blatant violation of
normal tender procedure.
The Geological Survey and Mines Bureau
Chairman has stated in writing thus; “I am of the view that TEC has in
a very dubious manner manipulated this tender and got Wheels Lanka to
purchase 60,000 tonnes of crude zircon from their original offer of
30,000 tonnes at an adjusted price of US $ 112.12 per tonne.
This is a very serious matter and the entire Technical Evaluation
Committee should be called for their explanation by the authorities
concerned.”
Meanwhile, paragraph seven of
Hakeem’s cabinet paper states that “The Cabinet Appointed Tender
Board (CATB) negotiating with the highest bidder as per TEC recommendation
has decided to award 60,000 tonnes of crude zircon to M/s Wheels Lanka
(Pvt) Ltd., at US $ 112.15 FOB per tonne converted to ex factory
price.”
We have already pointed out how TEC
manipulated the earlier price quoted by Wheels Lanka to reflect an FOB
price of US $ 112.11 per tonne and had also got the tenderer to increase
the quantity of crude zircon from the initial quotation of 30,000 tonnes
to 60,000 tonnes.
Para 10 of Hakeem’s cabinet paper
states that in October, 2002 Alchemy Boulders were awarded a quantity of
1190 tonnes of crude zircon. It
is also stated that the consignment of zircon was removed by the company
and is now at the plant site at Dambulla. However, there are no records
at the Geological Survey and Mines Bureau that transport permits were
obtained.
Inconsistent
On this occasion, Lanka Mineral Sands
Ltd. sold the zircon to Alchemy for a mere US $ 87 per tonne which is
far below market price — estimated at US $ 140 per tonne.
The difference between the FOB price and ex factory price per
tonne of crude zircon is US $ 25.12.
Hakeem’s argument for favouring
Alchemy appears to be based on the fact that Alchemy promised to upgrade
the raw mineral to premium and ceramic grades. De Silva maintains that
merely on the cover of value addition companies should not be treated in
a preferential manner. He asserts that if Alchemy was genuinely
interested in upgrading crude zircon to premium and ceramic grades, a
well structured project proposal should have been prepared.
Hakeem’s
cabinet paper is in fact inconsistent with the sequence of events that
followed since this tender was called.
Hakeem’s camp is accusing Nawaz
Hadjiyar a close confidant of Rukman Senanayake of trying to cancel the
tender in order to award it to a favoured party.
Hakeem’s
camp is now accusing Nawaz Hadjiyar, a close confidante of Minister
Rukman Senanayake of trying to cancel this tender in order to have it
awarded to another favoured party.
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False allegations — Wijeynanda
Director General,
Geological Survey and Mines Bureau,
Dr. N. P. Wijeynanda confirmed that he has resigned from
his post as a result of his superior’s damning report on this
issue.
“The allegations in my
chairman’s report are totally false,” he said, adding, “I
was merely the technical man on this committee and did my job to
the best of my ability.”
Wijeynanda denied he had been under
any pressure to recommend this award to two of Nawash’s
companies — namely, Wheels Lanka and Alchemy Boulders.
Wijeynanda maintained that Wheels
Lanka has made the highest offer and were thus considered.
He reiterated that an ex-factory price was determined
“because we were not sure they would be able to ship the sand
out of Sri Lanka as a result of the LTTE threat in Pulmuddai.”
He said TEC never negotiated any
prices but only made the necessary recommendations to the CATB.
“To my knowledge it was a perfect
tender — everything was done to the letter.” Wijeynanda said.
He maintained that his chairman’s
observations have been submitted on his (Wijeynanda’s) file
which as a mere TEC member “is incomplete.”
Wijeynanda added that unfortunately he has been made “the
scapegoat” for an issue “totally out of my purview and
control.” |
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The glaring
discrepancies
There were only two companies recommended by TEC for the sale of
60,000 metric tonnes of crude zircon sand.
Subsequently, these two companies have been offered 150,000
tonnes at an ex-factory price (which is less than US $ 112.11) to
be negotiated later by Lanka Mineral Sands Ltd.
The
companies, Wheels Lanka Ltd., and Alchemy Heavy Metals Pvt. Ltd.
(a sister company of Alchemy Boulders) have been offered the total
quantity of 150,000 tonnes of crude zircon.
Documentary
evidence proves that T. L. M. Nawash is chairman of all these
three companies. Alchemy Boulders and Wheels Lanka had initially
bid separately for 60,000 tonnes and 30,000 tonnes respectively.
However, Rauf Hakeem’s cabinet paper reveals that Alchemy
Heavy Metals ( Pvt) Ltd., which was not a party to this tender has
been recommended for the sale of 90,000 metric tonnes which was
not earlier available on this tender.
Refined
zircon in the international market is sold from US $ 350 to US $
450 per tonne. This
demand is expected to increase over the next five years mainly due
to the expanding ceramic industry in China.
Shockingly,
documentary evidence proves that Derby & Co. which tendered
for 1000 tonnes of rutile on the same invitation had quoted US$
315 per tonne FOB from Pulmuddai.
The company was the highest bidder but not awarded the
tender. In a letter
dated January 31, 2003 by chairman of Derby & Co. to Nassar,
the company has strongly protested charging that the entire tender
procedure in this instance was both morally and commercially
unacceptable.
Despite being informed of the offer by De-
rby who later increased their bid to US $ 400 per tonne for
1200 metric tonnes of rutile, neither TEC nor the CATB did
anything about their offer.
De
Silva points out that “it is quite clear from the sequence of
events that have followed since the calling of this tender, two
parties have been favoured on the pretext of value addition at a
plant supposed to be commissioned at Dambulla which is yet to be
furnished with machinery and equipment.”
Also,
that Hakeem has incorrectly stated in his cabinet paper in para
17, the Eastern Development and Muslim Religious Affairs Ministry
and the Geological Survey and Mines Bureau will monitor the
purification process at Dambulla and ensure that only the value
added products are exported by Alchemy Heavy Metals Pvt. Ltd.
Chairman GSMB, R. J. de Silva states that neither he nor the
board of directors of the GSMB nor the general manager are aware
of any such agreement with Rauf Hakeem’s Ministry. |
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Zircon
prices on the rise
The zircon
market has seen a reversal of fortunes over the past two years.
Declining consumption in 1997 and 1998 following the Asian
economic crisis saw prices fall to under $300/t by mid-1999, their
lowest level since 1995.
The fall in price was due to
competition between suppliers, which offset improvements in
demand. There has been a marked increase in zircon consumption
from 1999 to 2000. The resultant tightness in zircon supply
provided the impetus for significant price increases, and some
precautionary purchases by consumers added to the shortages of
supply.
Virtually all zircon output is a
result of the production of titanium minerals and most producers
have little flexibility to control production levels to match
market demand. Consequently, zircon has had a relatively turbulent
price history. It is now expected that future prices for zircon
will stabilise in the range of US$340-350/t FOB for bulk material.
More than 80% of zircon consumption
is now estimated to be in applications for which there are few, if
any, cost-effective substitutes for zircon at current price
levels, a situation which provides a significant stabilising
influence on the price of zircon. |
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TEC and CATB jointly
responsible
—
Chairman GSMB
Chairman,
Geological Survey and Mines Bureau, R. J. De Silva said, “I don’t know what the decision of cabinet with
regard to this tender will be.
I was asked to give my observations and I did so in a
report to Dr. Ratnayake who is Secretary of the Sub Committee on
Tenders and Budgets.”
De Silva confirmed that his report
was based on the file submitted to him by Dr. Wijeynanda.
He said Minister Rauf Hakeem may not have been aware of the
serious connotations surrounding this tender and merely “signed
in good faith” documents presented “by his Ministry
officials.”
—
De Silva said he does not know if his Director General, Dr.
Wijeynanda was under any kind of pressure with regard to this
tender but said, “If what I have stated in my report is found to
be correct, I suppose everyone has to take joint responsibility.
By everyone, I mean all members of the TEC and the CATB.” |
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Rauf
Hakeem says...
Shipping,
Eastern Development and Muslim Religious Affairs Minister Rauf Hakeem said his cabinet colleague Rukman Senanayake “is
making an unnecessary fuss over this.”
“This
has nothing to do with him — he is just angry with Dr.
Wijeynanda and as a result is jeopardising this whole tender. If
Rukman is objecting to the Geological Survey and Mines Bureau (GSMB)
monitoring the value addition process of the crude zircon sand
together with my Ministry, it is preposterous,” Hakeem said.
He
added that the GSMB is there for this purpose “and if I can’t
use it — then what’s the use?” With regard to the cabinet
paper, which seriously incriminates Hakeem, having introduced a
company that never ever made a bid, he said, “I don’t know
about this — I only saw the name Alchemy and signed the paper.
He
claimed that the cabinet paper was prepared by his Ministry
Secretary, D. Dissanayake. “I trust Dissanayake implicitly. He
is a senior public servant — and I am not going to disclaim any
responsibility for signing this paper — I satisfied myself that
everything was in order, before doing so,” Hakeem said. Asked
why then he approved the sale of 90,000 metric tonnes of crude
zircon to a company that never made a bid to this effect he said,
“I only put my rubber stamp in good faith — I am only a
vehicle of submission — this aspect has to be looked into.”
He meanwhile
reiterated strongly that he has got the best possible price for
the crude zircon sand at US $ 112.12 per tonne. Hakeem maintained
that he realised the internal tender board procedure adopted by
Chairman, Lanka Mineral Sands Limited, Muhammad Nasser “was all
wrong” which is “why I changed it and insisted on a Cabinet
Appointed Tender Board (CATB) which opened the market to
international buyers and a better selling price.”
Asked
why the TEC and CATB recommendation has been left at a yet to be
determined ex-factory price, Hakeem stated, “this maybe because
current transport rates have to be included….” He asserted
that what both TEC and the CATB have taken into consideration is
that Nawash’s three companies have pledged to export the
minerals after upgrading the sand. None of the companies that made
a bid had made this offer, he explained.
Hakeem
maintained that Nawash has a fully quipped factory at Dambulla,
which can adequately deal with upgrading the crude zircon sand.
Referring to the GSMB Chairman’s report, Hakeem said, “he does not understand. De Silva is
just unnecessarily wanting to confuse this whole thing.” Hakeem
finally conceded, “let the Cabinet Sub-Committee on Economic
Affairs determine these things.
“I
am not going to grudge them their judgement on this matter….”
He added that aspersions are being cast by some of those who lost
the tender, “there are vested interests who are out to
destabilise this whole process…” he accused, charging that he
is being unfairly blamed. “I stand by my statement. I have done
everything regarding this tender in perfectly good faith and there
is no foul play.
“The
entire process was very transparent every step of the way…”
Hakeem reiterated. He said he was unaware of attempts by the
previous regime to establish an upgrading plant at Warakapola….
But, said he is trying to put up one at Yanoya in the Eastern
Province — due to extensive availability of fresh water in the
area. Hakeem maintained that it is impossible to upgrade the plant
at Pulmuddai due to the recurring problems with the LTTE.
With
regard to the TEC members Hakeem asserted that “it was a very
good mix,” and “all the officers were duly qualified to
evaluate the tender under review.”
|
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|
Tender
procedure violated
The
Sunday
Leader has
proof that Chairman, Lanka Mineral Sands Limited, Muhammad Nassar
has personally written to prospective buyers telling them how much
they should quote for one metric tonne of crude zircon. Upon
receiving a reply he has approved letters of award.
One
such international company is Central Hong Kong, Nassar wrote to
on November 7, last year. In
this letter he stated that the internal tender board of Lanka
Mineral Sands Limited of which he is chairman, has decided on a
minimum price of US $ 127 C & F per metric ton of crude zircon
from Pulmuddai. This figure was subject to certain conditions of
the product on sale.
Giving
a personal fax number, he requested eight companies to confirm
their offers to him or to S. A. Nandadeva, who was chairman of the
company’s Technical Evaluation Committee.
His
offer was duly accepted and Nassar in this manner sold an
approximate 8000 metric tonnes of crude zircon to eight different
buyers at a quantity of 814 metric tonnes each.
Such
sales exceeded Rs.10 million, which is the cut off point for which
Nassar has the authority to negotiate prices and sell the mineral
sand. |
*
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|
Denies
allegations
Chairman,
Lanka Mineral Sands Limited,
Muhammad Nassar denied any attempts to manipulate this
tender. “This was done totally by the CATB and concluded. We
still don’t have a decision — and have been waiting for one to
get rid of our accumulated stocks,” he said.
Nassar stated that this particular
tender was given wide publicity and evaluated “by completely
unknown persons.” When
told his own General Manager, S. Nandadeva was on the Technical
Evaluation Committee, Nassar admitted this was so, but claimed,
“he never kept me informed on the status of this tender.”
He maintained that the entire tender
had been monitored exclusively by the Eastern Development and
Muslim Religious Affairs Ministry.
For someone who claimed to know
nothing of the evaluation process, Nassar insisted the sale had
gone to the highest bid, which he says was Wheels Lanka. He
claimed he did not know that Shenyan Astron in fact was higher in
their original offer inclusive of FOB.
“I was however astonished that a
local company could offer US$ 135 C & F” he said, referring
to the original offer made by Wheels Lanka.
Asked why LMSL cannot upgrade the
crude zircon sand themselves and thereby negotiate a much higher
price, he said Pulmuddai has been a totally disturbed plant as a
result of the war — “we are not doing any production — we
don’t have enough fresh water to process and upgrade the
sand.”
Asked why a proposed upgrading plant
at Warakapola by the previous regime has been abandoned, Nassar
said, “I stopped work at this site as they were depending for
water on a stream that brings the town’s sewage.
The site was not at all feasible.”
He asserted he stopped any further construction after
having informed his Minister, Rauf Hakeem. |
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Rukman
Senanayake says…
Environment
and
Natural Resources Minister, Rukman Senanayake when questioned said
“I am in the sub committee for tenders. If it is proved that
this tender has been mishandled and we simply won’t permit an
award.”
Senanayake claimed he has not yet
seen the report by R. J. de Silva since it has been handed over
directly to Dr. Ratnayake. “After
Dr. Ratnayake studies this report he will place the necessary
recommendations for further action by us,” Senanayake said.
Senanayake asserted that he
requested an inquiry on this matter after learning that the
Geological Survey and Mines Bureau together with the Eastern
Development and Muslim Religious Affairs Ministry would jointly
monitor the purification process of crude zircon.
“Dr. Wijeynanda had no right to
lend any such assurances to Hakeem’s Ministry in this regard
without ensuring he had my approval as well as that of the GSMB
board of directors,” Senanayake pointed out, explaining that
such a monitoring process would require finances to be released
from his Ministry.
The Minister added that the Sub
Committee on tenders cannot find fault with or reprimand
individuals found guilty of manipulating a tender for personal
gain but can only cancel the tender in question. |
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The Sunday
Leader findings confirmed
Finance Manager, Wheels Lanka (Pvt.)
Ltd., Mohammed
Ali also contacted The Sunday Leader on Friday
regarding this matter. Asked how he knew this story was being
worked on, he said, “someone for Lanka Mineral Sands called my
managing director and told him.”
This alone proves the complicity
between the sellers and the buyers, the latter who are yet to be
awarded this tender, and confirms the allegations the
investigation by The Sunday Leader revealed. Ali meantime
went onto say that Wheels Lanka had offered the highest price for
this tender but maintained “it is now being dragged because I
think the Environmental Ministry has some vested
interest.” |
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|
Choksy says….
Finance Minister,
K. N. Choksy, said that when this matter came before the Sub
Committee on Tenders, “Rukman Senanayake raised certain
objections and wanted an inquiry report prepared.”
Speaking to The Sunday Leader
from Tokyo, Japan, Choksy said he has not yet seen the report but
is certain “it will be made available for me upon my return to
Colombo.” |
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