Rs. 200 mn misappropriated in Tamil Nadu ‘humanitarian aid’ rice transport?

Although the stock of 40,000 metric tonnes (MT) of rice given to Sri Lanka by the Government of Tamil Nadu as humanitarian aid in June 2022 could have been transported to the relevant districts at a price of about Rs. 6 per kg, the Food Commissioner’s Department has paid a price of about Rs. 12 per kg to transport the said stock, which has resulted in the misappropriation of about Rs. 200 million, The Morning learnt.

In view of the economic crisis in the country, the Tamil Nadu Government had arranged to provide humanitarian assistance to Sri Lanka, which included 40,000 MT of rice, 500 MT of milk powder, and pharmaceutical drugs. The 40,000 MT of rice were received in several portions and were then distributed to 25 districts through the said department.

The department had called for tenders in June 2022, to select transport service providers to deliver the rice to the relevant districts and three suppliers had submitted quotations in response to the said tender. One supplier had submitted rates of Rs. 43.90 and Rs. 50.90 per MT per km to transport rice in lorries with capacities of 20 MT and 30 MT, respectively, while the other two suppliers had submitted rates of Rs. 35 per MT per km to transport the rice in lorries with the capacities of 20 MT and 30 MT, respectively. The latter two suppliers had been selected according to the said department.  

The response from the said department to a Right to Information (RTI) request made by The Morning revealed that rice received from India was transported to each district in 50 kg bags. A total of 53,153 such bags have been transported to the Colombo District, 49,452 to the Gampaha District, 67,171 to the Kalutara District, 60,766 to the Kandy District, 23,550 to the Matale District, 44,885 to the Nuwara Eliya District, 18,767 to the Galle District, 21,540 to the Matara District, 16,309 to the Hambantota District, 33,487 to the Jaffna District, 9,334 to the Mannar District, 6,175 to the Vavuniya District, 8,350 to the Mullaitivu District, 10,629 to the Kilinochchi District, 26,434 to the Batticaloa District, 25,323 to the Ampara District, 21,945 to the Trincomalee District, 41,375 to the Kurunegala District, 22,023 to the Puttalam District, 39,610 to the Anuradhapura District, 19,545 to the Polonnaruwa District, 43,661 to the Badulla District, 29,087 to the Monaragala District, 64,059 to the Ratnapura District, and 37,268 to the Kegalle District.

According to the said rates, a sum of Rs. 700 per km has been paid to transport 20 MT (one MT is equivalent to 1,000 kg) of rice from Colombo to Ampara. As the distance from Colombo to Ampara is about 350 km, the amount paid for one journey was approximately Rs. 245,000. When the relevant calculations are done, an amount of Rs. 12.25 has been paid for one kg of rice. However, when contacted by The Morning, several transport service providers confirmed that even under current circumstances the charges should amount to a sum between Rs. 100,000 and Rs. 125,000 to transport 20 MT of rice from Colombo to Ampara, which makes the rate per kg between Rs. 5 and Rs. 6. 

Sources who spoke with The Morning alleged that the entire stock of rice has been transported to the respective districts in 2,000 lorry journeys and that a sum of approximately Rs. 100,000 above market prices which prevailed at that time has been paid for one journey through which a sum of around Rs. 200 million has been misappropriated. It is noteworthy that the said department has paid such high prices to transport this rice stock received as a donation despite the ability to transport it in lorries belonging to the Government and semi-Government institutions such as the Army and Lanka Sathosa.

When contacted by The Morning, Food Commissioner’s Department Chief Accountant E.M.N.R. Bandara said that the rice had been transported at the relevant rates after following the prescribed tender procedure. He said that the transport contract was awarded to the two suppliers who submitted the lowest rates in the call for tenders.

However, while commenting on this to The Morning, United Rice Producers’ Association Chairman Kusumitha Mudith Perera said that the then-Commissioner of the Food Commissioner’s Department and the said Department’s Chief Accountant had committed a huge financial fraud by transporting rice after paying double the price in the market, under the guise of calling for tenders. He said that the department had distributed the rice received as a donation in the guise of a business by hiring private suppliers instead of using Government-owned vehicles to distribute the same. 

“It is not acceptable to agree to any rate that is offered as a tender. According to the logic of the said department, if a rate of more than Rs. 35 per km was offered in the relevant tender call as the lowest rate, will they pay that rate too? Is it their responsibility to pay for contractors at any rate which has been submitted in calls for tenders? They should study the prices in the market and pay the prices accordingly. And nowadays, most frauds are done under the guise of tenders. Therefore, it is not possible to say that there was no fraud in the relevant transaction just because tenders were called,” he added.