Await for a Black Sand blackout!
Black Sand Commodities who was awarded the controversial 4.5 million metric tons coal tender worth of 1500 million USD failed in submitting the performance bond before the due date, which was 7th September 22. Accordingly, the award will be annulled and LCC will have to claim the bid bond. Tender document specifically states that “Failure of the successful bidder to comply with the requirement of submitting performance security constitutes sufficient grounds for the annulment of the award and forfeiture of the bid security”. The value of the bid security was 2 million USD.
“The whole process of this coal procurement started two months ago, with Power and Energy Minister submitting a cabinet memorandum on 1st July to procure 4.5 million metric tons of coal through solicited, unsolicited and G to G proposals. We have wasted two months of valuable time by going behind a mirage and now the whole country will have to pay for this mistake. “Why didn’t they do an in-depth analysis of the capabilities and background of the bidder before awarding this big contract?” an industry analyst questions. “A full blown investigation must be made to find where and what went wrong in the process”, he further said.
As per internal sources at CEB and LCC, the country has sufficient coal only up to the end of October and the plant will have to shut down if the country does not secure sufficient supply prior to that. “If not the country will go through Black Sand blackout”.
The controversial Black Sand, came into biding through a last minute amendment made to the tender document. Black Sand, which was said to be representing a registered supplier of LCC, Suek AG, did not even give a bid bond in its name. The Bid bond was given in the name of Suek AG, even though the bid was given in the name of Black Sand. “We are waiting to see how LCC is going to claim Suek AG bid bond, because of the failure of Black Sand to give the performance bond. This will be another legal issue now. These people should have thought about these things before riding on this wrong horse.“
Black Sand representatives in Colombo, had tried till the last minute to persuade bankers in Colombo to issue the performance bond. Various stories and promises had gone up and down, but bankers were requesting them to provide tangible security and/or a cash deposit against the bond, a source said. “37 million USD is big money and no bank in Sri Lanka will take the risk of issuing a performance bond for that value and besides for a two year contract like this. They should have first secured the banking facility before participating for a contract like this. Only fly by nights will participate for a contract for such a big value without banking lines in place and without even having the ability to issue a performance bond” a banker from a reputed government bank stated.
The 7th September was the deadline for providing the performance bond and having realized that it’s not going to work the way they thought it would and with Black Sand failing to even obtain a performance bond, both LCC and the Energy Ministry got to panic mode. They had no other excuses for the blunder they had made, rather than blame on legal cases and bad publicity, against the deal. On the 7th, Minister of Power and Energy issued a letter to MP Harsha de Silva to investigate into the accusations made against the deal, claiming that those accusations were false. And on the 8th, in a parliament speech, he tried his level best to hide the truth of failure of Black Sand to give a performance bond but instead stated that the coal supplier is not going to come forward because of a legal case filed by Sobitha Thero and actions of other unsolicited bidders. The Energy Ministry and LCC higher ups, who defended the award of the deal to Black Sand with lots of misrepresenting facts, know very well the mistake they made by promoting a dummy company to be offered the deal and are currently doing their level best to conceal the fact by making a big hue and cry about the legal cases and the resistance this muddy deal got.
Politicians and officers will always play games to save their camps. But finally the public and the country will suffer as a result of their bad motives and wrong decisions. If the country has to go through a black out due to Black Sand, there must be a full and impartial investigation into the thing. What is Black Sands and who is behind it has to be fully investigated. See how they have rushed through the process. Has there been proper diligence given to the process without swallowing up the Black Sand rope tossed and dragging the whole country to a mess?
The cronies behind this whole saga must understand and realize one important lesson. This is not the same country you played around with years ago to your tunes. It’s a different country, different playing ground and different rules! There are lots of spectators watching you play. Be careful!
A special correspondent