The Ministry of Power and Energy is investigating a massive fraud to the State amounting to two hundred million rupees in coal purchases to the Lakvijaya Power Plant of the CEB from Liberty Commodities Ltd.

S.K.M. Malavisuriya the Chief Internal Auditor of the Ministry says in a report dated 16 June 2016, that the Lanka Coal Company Ltd. has overpaid a supplier Liberty Commodities Ltd through a series of  spot tender transactions that took place during 2015/16 shipping season.

According to the report the fraud has been committed by surreptitiously altering the quality parameters to give an advantage to the seller at the expense of the Ceylon Electricity Board and the Government of Sri Lanka.

As per the original tender document the ash and sulphur quality parameters were changed by as much as ninety per cent. This in turn enabled the seller to supply to deliver substandard coal at a higher price.  

The Power & Renewable Energy Ministry is now investigating the possibilities of this fraud extending to other supplies to the coal plant, and will hand over the investigation to authorities to unravel who was responsible for this loss.

The report says that the agreements signed between the Lanka Coal Company and the seller Liberty Commodities Ltd has not been vetted and cleared by the Attorney General’s Department which is a standard practice for all government contracts. Sources say that if this was done this fraud could have been detected and massive losses to the country avoided.

Since the agreement is signed and sealed say the sources; there would be issues in recovering these monies but nevertheless this is a serious lapse and the matter will have to be handed over to the FCID for further investigation.