Sri Lanka is set to loose a huge some of money due to the faulty tender process adopted in purchasing railway coaches through the Indian Line of Credit, informed sources said.

Tenders were called in May this year for the purchase of 160 railway coaches from India through the Indian Line of Credit provided by the Exim Bank of India. Since it is an Indian Line of Credit, the coaches have to be bought from India. But there is no rule against competitive bidding among Indian companies.

The procurement notice was not gazetted and was not published in newspapers in Sri Lanka and in India, which kept several manufacturers in the dark.

Some manufacturers, anticipating the impending tender announcement, have informed the Sri Lankan government of their willingness to take part in the bidding. These manufacturers include a company attached to the Defence Ministry of India.

However, these manufacturers were left in the darkness as their has been no announcement made on the gazette or the newspapers.

In this event, only a supplier with ties to Indian government made a bid.

It is learned that the bid is for Sri Lankan Rs 80 million for one coach. However, the current price for one coach is around Rs 45 million. The absence of competitive bidding is likely to cause a huge loss to the Sri Lankan government, sources in the railway department said.

It is also learned that the Monetary Board of CBSL approved to obtain a loan of US $ 177 million from the Indian Line of Credit for the purchase.