Monday, 23 June 2014 00:00
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The Sri Lanka Ports Authority recently announced its intention to commence supply of bunker fuel to international vessels out of its tank storage terminal at Magampura Mahinda Rajapaksa Port in Hambantota.
Towards this end, a company styled Magampura Port Management Company Ltd. recently imported a cargo of bunker fuel of approximately 25,000 tons comprising fuel oil grades IFO 380 cst and IFO 180 cst. The approximate value of the cargo was almost $ 16 million, which is in excess of Rs. 2 billion.
It is learn that this consignment, already discharged into the storage tanks at Hambantota, is contaminated and therefore unfit for sale and use as bunker fuel to vessels unless otherwise correction is made, which is going to cost the port company additional money.
In a strange twist that adds to the complication, the entire consignment was accepted by the management company from the supplier and the vessel delivering the cargo was permitted to depart notwithstanding the fact that all parties (including a specialist consultant supplied to the SLPA by a private sector organisation in bunkering business) were fully aware that the consignment was contaminated, out of specification and should thereby have been rejected. Given the substantial volume/quantity involved of almost 25,000 tons, rectification is only possible at a considerable cost to SLPA, which is going to be impossible to recover considering the fact that they will have to sell these products at competitive rates compared to regional pricing.
Questions are being raised as to what process was followed in the selection of trader and the supplier, was a global tender published in accordance with industry norms and in keeping with financial regulations for Government-owned businesses, was the CPC consulted in the evaluation process or has the trader/supplier been selected based on previous track record of supply to the CPC.
Other questions include was the trader/supplier already paid for this consignment, who is bearing the additional cost of correcting the cargo at extra cost, were there any local parties or commission agents involved in this transaction and does the SLPA or management company have the required expertise to engage in this business.
Analysts were unsure whether SLPA had corrected the full consignment or part of it ahead of the ceremonial commissioning of the bunkering facilities on 22 June.
