Supply of coal to Lakvijaya: SC grants leave to proceed in petition filed by aggrieved bidder

Former Cabinet’s decision deviates from evaluation procedures; Supreme Court okays Singaporean Company’s plea

By S. S. Selvanayagam

The Supreme Court yesterday granted leave to proceed with the rights petition filed by an aggrieved bidder challenging the decision of the Cabinet for the alleged departure from evaluation procedure in awarding the contract for the supply of coal to the tune of Rs. 90 Billion for the Lakvijaya Coal Power Plant of Puttalam.

The Bench comprising Chief Justice K. Sripavan, Justices Priyantha Jayawardane and Anil Gooneratne granted leave to proceed with the petition of Singapore based company Noble Resources International Ltd for the alleged infringement of its fundamental rights to equality and to the freedom to engage in lawful trade and business.

The Court took into cognizance to consider granting of adequate compensation to the Petitioner Company if the contract has been awarded unlawfully.The matter is fixed for hearing on December 15.

Petitioner cited Power and Renewable Energy Minister Ranjith Siyambalapitiya, Lanka Coal Company Ltd, Ceylon Electricity Board Members of Standing Cabinet Appointed Procurement Committee (SCAPC), Technical Evaluation Committee, Lanka Coal Company, BOI, Procurement Appeals Board, the beneficiary Company Swiss Singapore Overseas Enterprises Ltd, Members of the Cabinet, Attorney General and others as Respondents.

Romesh de Silva PC with Maithri Wickramasinghe PC, Sugath Caldera and Surane de Silva appeared for the Petitioner. Sanjeewa Jayawardene PC with Rajiva Amarsuriya appeared for Lanka Coal Company Ltd, Ronald Perera PC appeared for Swiss Singapore Overseas Enterprises Ltd, Additional Solicitor General Sanjay Rajaratnam appeared for the Attorney General.

The Petitioner claims that the Lanka Coal Company (LCCL) Ltd is an empowered Company to procure coal to meet coal requirements of all coal fired power plants in Sri Lanka.

It claims it has for over four years supplied coal of the quality required at the best possible price in the market to LCCL and other entities of the government repeatedly waived conditions of contract to assist having reduced price, shipped without letter of credit or guarantees, shipped without payment of freight, released bills without receiving full payment etc.

The then Cabinet of Ministers decided to award the contract to the transport of coal to LCCL. The Power and Renewable Energy Minister in terms of the Cabinet Memorandum recommended the award of the tender to the beneficiary Company Swiss Singapore Overseas Enterprises Ltd.

Petitioner maintains the Technical Evaluation Committee (TEC) arrived at decision that the petitioner was the lowest responsive tender and recommended the grant of contract to it.

It laments the Company Swiss Singapore Overseas Enterprises Ltd whose tender was approximately US $ 91.55 million higher than that of the Petitioner had been awarded the contract by removal of two criteria on the recommendation of the Standing Cabinet Appointed Procurement Committee (SCAPC) increasing the cost to the government by 1.62 Billion Rupees, even compared to spot purchases made by the Petitioner LCCL.

The Petitioner complains the SCAPC acted ultra vires in directing the TEC to evaluate the tender based on different criteria in effecting by deleting two of the criteria which changed the evaluation basis of the tender.