Mineral sands and an indigenous administration


Mineral sands are the main known source of wealth the NorthEast contains that can be sold on the international market and turned into hard currency.  When it is charged that the Sinhalese South has been able to appropriate for itself "undisputed control over the country’s wealth," the ability to mine and sell these mineral sands is firm evidence of this control.  Reading the below article shows in concrete terms exactly why an indigenous administration for the benefit of the inhabitants of the Northeast is vital.

Not only that, external aid is much less necessary if an area has something to sell that the world wants. That is, unless this wealth is put into private pockets through corruption.  

Mining at Pulmoddai was impossible until the ceasefire.  Now it seems to be back to business as usual.  Note that the customer for the mineral sands in the deals discussed below, China, was also given fishing rights in the Northeast by the central government after the ceasefire. How does the the central government have the authority to make these decisions, which have such an impact on the well-being of the inhabitants of the NorthEast, without their approval? [ed.]


Mineral tender bender










The Sub Committee on Tenders led by Finance Minister K. N. Choksy at the request of  Environment and Natural Resources Minister Rukman Senanayake has unearthed a scandalous attempt by another government minister to favour two companies when recommending the award of a tender for the selling of mineral sands.

The suspect minister together with the chairman and general manager of a state owned institution have  engaged in a game of what appears to be wheeler dealing  to suit a local business magnate, depriving the state of millions of rupees as they collectively used a natural resource in Sri Lanka for reasons best known to themselves.

The minister in question, Rauf Hakeem, on April 1 this year submitted a cabinet memorandum on the selling of mineral sands by Lanka Mineral Sands Ltd. (LMSL) for local processing and value addition.

Hakeem is minister for port development, shipping as well as for eastern development and Muslim religious affairs.  Lanka Mineral Sands Limited  is governed by the Eastern Development and Muslim Religious Affairs Ministry.  LMSLis a fully government owned company.  The functions of the company are to do mining, separation, refining and preparation of mineral sands. The processing plant of the company is located in Pulmuddai in the eastern coast.

Not tendered

In his cabinet paper on April 1, Hakeem introduced two companies, namely, Alchemy Heavy Metals Pvt. Ltd. (AHMPL) and its sister company Alchemy Boulders Pvt. Ltd. (ABPL), the former of which had not even tendered for the sale of 60,000 tonnes of crude zircon.

In this cabinet memorandum, Hakeem also stated that 60,000 metric tonnes of crude zircon is to be awarded to Wheels Lanka Pvt. Ltd. (WLPL) in terms of the recommendations made by a Cabinet Appointed Tender Board (CATB).

What is stupendously shocking in this instance is that Hakeem has approved this award to the three companies which  have  one single individual as chairman — namely  T. L. M. Nawash.  We repeat that one of Nawash’s companies — Alchemy Heavy Metals Ltd. never even submitted a bid when this tender was called, but was yet nominated by Hakeem to buy 90,000 metric tonnes  of crude zircon from LMSL.

Hakeem's manoeuvre has been done in association with a close friend and confidant, Muhammad Nassar, who was appointed chairman,  Lanka Mineral Sands Limited by Hakeem.

Documentary evidence in the possession of The Sunday Leader proves that Nassar has illegally sold 8000 metric tonnes of crude zircon sand to eight different companies — six of which are international companies without following proper government tender procedure.  (See box for details)

According to Nassar’s own admission he did so with full Ministry approval.

Even in this instance, Nassar is alleged to have influenced the Technical Evaluation Committee (TEC) to favour Wheels Lanka, Alchemy Heavy Metals and its sister company Alchemy Boulders.

There has been a rapid growth recently in zircon demand as a component of glass used in television and computer monitor tubes. Similarly, the use of zircon as a feedstock for the production of zirconia and zirconium chemicals has also increased rapidly, particularly in the last five years.

Rapid growth

The use of zircon for glazes on ceramic items such as floor and wall tiles, sanitary-ware and tableware, accounts for almost 50% of total zircon consumption and has been the most rapidly growing end-user over the last two decades.

If this tender is awarded, the sale of the mineral sands to these three local companies will result in a multi million rupee loss for the government.

Depending on the quality of the crude zircon, international market prices for the mineral vary.  If 150,000 tonnes of crude zircon is sold at approximately US$ 87 per tonne to Nawash, Lanka Mineral Sands would earn only US$ 13.5 million.  If on the other hand this same quantity is sold for US$ 112 per tonne,  the earnings for Lanka Mineral Sands would be in the region of US $ 16.8 million.  The difference in revenue is over US $ 3 million.

If, , Lanka Mineral Sands and Rauf Hakeem had the commitment to upgrade this crude zircon to a more refined product they could earn for the state between US$ 350 to US$ 400 per metric tonne of zircon.  (See  box for international market prices)

An attempt by the previous regime to do just this at Warakapola was stopped by Hakeem when he came into office. Since then, no attempts have been made by this government to utilise machinery and equipment owned by Lanka Mineral Sands at Pulmuddai which can upgrade crude zircon to a more polished variety and thus, be sold at world market prices.

For example, if 150,000 tonnes of crude zircon is upgraded by Lanka Mineral Sands they would be left with an estimated 45,000 tonnes of processed sand. This could be sold for at least US $ 350 per tonne.

After Hakeem presented his paper to cabinet, the matter was placed before the Sub-Committee on Tenders and Budgets.  Rukman Senanayake is a member of this committee as well, and voiced his suspicions regarding this sale to Finance Minister K. N. Choksy.  Dr. R. M. K. Ratnayake, who is secretary to this  sub committee as well as additional secretary to the Fomamce Ministry,  was later instructed by Choksy to initiate a full-scale inquiry at the behest of Rukman Senanayake who suspected foul play.

In-depth investigation

Dr. Ratnayake  on May 21, requested R. J. De Silva, who is  chairman, Geological Survey and Mines Bureau (GSMB) to conduct an in-depth investigation.

De Silva’s investigation unearthed a can of worms.  He found that members of the Technical Evaluation Committee had  fraudulently amended the tender documents without approval from the CATB or cabinet.


Not just that, but the tender documents never even carried specifications of the products on offer. It however demanded that all offers must include an FOB and C & F price. It is interesting to note how TEC manipulated this tender demand when one of their favourites quoted without FOB.

In a scathing and very incriminating report to Dr. Ratnayake handed over on May 27, the GSMB Chief has based his findings on the file related to this tender that was handed over to him by  Director General , GSMB, Dr. N. P. Wijeynanda. The latter was a member of the TEC for this sale of mineral sands.

Following his superior’s shocking findings regarding the tender, Dr. Wijeynanda resigned from his post as Director General at the bureau  on Friday,  June 6.

A curious aspect with this whole sorry scenario is that the Technical Evaluation Committee consisted of only two individuals who are technically qualified to evaluate a tender of this nature. They were Dr. Wijeynanda and General Manager,  Lanka Mineral Sands Ltd, S. A. Nandadeva.

The other two members on TEC were Additional Secretary,  Eastern Development and Muslim Religious Affairs Ministry, A. C. M. Razik,  and Director, External Resources Department, P. H. Sugathadasa. Razik was nominated as chairman of TEC despite him possessing no technical knowledge on mineral sands. Sugathadasa also has no technical knowledge in this department. Yet, they were both appointed to the TEC.

On November 26, 2002, Muhammad Nassar in his capacity as Chairman, LMSL, wrote to Dr. Wijeynanda to provide adequate publicity to the tender. A copy of the tender notice was supposed to have been sent for circulation among “international tender organisations.” This in effect means that this notice must be sent to all embassies and missions abroad. That this was not done  is another serious omission on the part of Lanka Mineral Sands Ltd. and the Eastern Development and Muslim Religious Affairs Ministry.

The tender advertised in January this year was for the sale of 60,000 metric tonnes of crude zircon sand, 60,000 metric tonnes of illmenite sand and 1000 metric tonnes  of  rutile sand. Ten offers were received.

The original offer by Alchemy Boulders Pvt. Ltd., for 60,000 tonnes of crude zircon sand was for US $ 95 FOB per tonne.  Wheels Lanka Pvt. Ltd. offered for the same quantity US $ 135.12  C& F per tonne  while Shenyan Astron Mining Corporation of China offered US $ 108 FOB per tonne.  These three out of 10 companies offered this price for crude zircon and illmenite sand.  Note that Wheels Lanka Pvt. Ltd.   quoted US $ 135 C & F for only 30,000 tonnes of crude zircon.  This was later increased to 60,000 tonnes and the price amended to suit Wheels Lanka at an FOB rate.

Breach of tender procedure

On examination of the schedule there is a hand written scribble by Dr. Wijeynanda to negotiate with Alchemy Boulders.  De Silva charges that such negotiation could only include the price and this is a serious breach of normal tender procedure.  A member of TEC has no authority to recommend to Lanka Mineral Sands to negotiate prices.

De Silva asserts that both the CATB and TEC in this instance were in breach of tender procedure by negotiating with selected tenderers, leaving the other tenderers out. This was done apparently on the pretext of value addition.

In a letter to the CATB on February 17, 2003, TEC has once more acted strangely by indicating that CATB should negotiate with Wheels Lanka Pvt. Ltd., and get them to increase their offer by an additional US $ 1.  This letter also states that if CATB fails to obtain this price they may then negotiate the price with Shenyan Astron Mining Corporation.  It is pertinent to note here that TEC had by this time already recommended negotiations with Alchemy Boulders first, whom had made a lower offer than Shenyan but interestingly is a sister company of Lanka Wheels.

A confusing aspect of these price negotiations is that Wheels Lanka Pvt. Ltd. initially quoted US $ 135.12 per tonne, which was C & F.  TEC however determined that they should be told to quote US $ 111.12 FOB and get them to increase this quote by an additional one dollar.  Wheels Lanka Pvt. Ltd. in their original bid never quoted a price inclusive of FOB.  Later TEC recommended the award to Wheels Lanka at an undetermined ex factory price — which in effect would bring down the selling price from US $ 112 to maybe US $ 87 which had been the sellers price in the previous tender.  Since the price was never determined by either TEC or the CATB it is not yet known for how much Lanka Mineral Sands Ltd. would finally negotiate and sell a total of 150,000 metric tonnes of crude zircon to Nawash and his conglomerate of companies.

When we asked Dr. Wijeynanda why this was done he said the parties concerned were allowed this very lucrative benefit on the presumption by TEC that “if problems arose with the LTTE — they (the buyers), would not be able to ship the sand out of the country and would then need to process the sand in Sri Lanka.

Processing plant

Which, according to Dr. Wijeynanda, is why ABPL and AHMPL were considered (despite the latter not even having made a bid) due to a supposed processing plant to have been established by the company at Dambulla.

On February 20, 2003, exactly three days after TEC had made their recommendations to the CATB, Chairman, Alchemy Boulders, T. L. M. Nawash, (the strongman behind the three companies already favoured in this bid) wrote to the Chairman, CATB, P. W. Seneviratne who is also Secretary, Irrigation Ministry.

In this letter, Nawash informed Seneviratne that Alchemy has set up a plant and machinery to process crude zircon and had already purchased 1179 tonnes from Lanka Mineral Sands.  His letter stated that the plant is situated at Dambulla and that the processing of crude zircon will be done in two stages.

Our investigation found that Nassar did in fact sell 1179 tonnes of crude zircon to Nawash at a price of US $ 87 per tonne.  All this without adhering to any form of proper tender procedure.

Later, the General Manager, Sumitomo Corporation on February 14, this year, in a letter to Nassar strongly protested against this sale.  He pointed out that Sumitomo Corp. has also participated in this internal tender (LMS/MKT/TDR/02/01) according to the conditions set forth by LMSL. However they subsequently found out that Shenyan Astron of China had been granted 1,628 metric tonnes of zircon instead of 814 metric tonnes, shipped to Sumitomo and six other buyers.

The Sumitomo GM goes onto state in the same letter, “we understand that a Sri Lankan trader named Alchemy Boulders has been offering 1179 metric tonnes of zircon to Chinese buyers with conditions completely different from the tender conditions. We are of the opinion that such a contract between LMSL and Alchemy is unfair and violates the ethics of the tender system.

Highest bid

When questioned on this aspect, Muhammad Nassar said Shenyan had been favoured because they had offered the highest bid in this instance and so were given a bonus of an additional 814 metric tonnes. He added that none of the other bidders including Alchemy Boulders had qualified for this internal tender, but were granted 814 metric tonnes of crude zircon and in Alchemy’s case 1197 metric tonnes “in order to maintain good relationships."

On March 4, 2003, S. Dissanayake, Secretary, Eastern Development and Muslim Religious Affairs Ministry also wrote a letter.  His letter was addressed to TEC and states that Alchemy Boulders had brought to the notice of the CATB that they are in the process of establishing a plant at Dambulla to purify and upgrade crude zircon to premium grade in collaboration with a Chinese counterpart — namely, M/s Jiangxi Kingan Hi-Tech Co. Ltd of China.

In what appears to be double quick time following this letter, the very next day on March 5, a committee comprising of K. Shanmugalingam, who is additional secretary to Hakeem’s Ministry, Dr. Wijeynanda and S. Nandadeva, GM for Lanka Mineral Sands, visited the Alchemy site at Dambulla. Their visit revealed that the site had yet to receive the required machinery and processing equipment. We learn that even as late as May this year, the Dambulla plant belonging to Nawash remained empty of any upgrading and processing equipment.

On March 19, members of the CATB and TEC invited Nawash who is chairman of all three companies and one M. S. M. Ali, who is a director at Alchemy Boulders and discussed the sale. Nawash had agreed to the TEC price of US $ 112.12 FOB.  However the committee also confirmed to Nawash that the purchase of crude zircon was to be at an ex-factory price at Pulmuddai which as we have already pointed out would mean the selling price is much lower. This was not even determined but left for Lanka Mineral Sands Ltd. to negotiate after the tender is awarded. And this, Rauf Hakeem, approved in writing.

Needless to say, that the CATB did not negotiate or determine the ex-factory price is a blatant violation of normal tender procedure.

The Geological Survey and Mines Bureau Chairman has stated in writing thus; “I am of the view that TEC has in a very dubious manner manipulated this tender and got Wheels Lanka to purchase 60,000 tonnes of crude zircon from their original offer of 30,000 tonnes at an adjusted price of US $ 112.12 per tonne.  This is a very serious matter and the entire Technical Evaluation Committee should be called for their explanation by the authorities concerned."

Meanwhile, paragraph seven of Hakeem’s cabinet paper states that “The Cabinet Appointed Tender Board (CATB)  negotiating with the highest bidder as per TEC recommendation has decided to award 60,000 tonnes of crude zircon to M/s Wheels Lanka (Pvt) Ltd., at US $ 112.15 FOB per tonne converted to ex factory price."

We have already pointed out how TEC manipulated the earlier price quoted by Wheels Lanka to reflect an FOB price of US $ 112.11 per tonne and had also got the tenderer to increase the quantity of crude zircon from the initial quotation of 30,000 tonnes to 60,000 tonnes.

Para 10 of Hakeem’s cabinet paper states that in October, 2002 Alchemy Boulders were awarded a quantity of 1190 tonnes of crude zircon.  It is also stated that the consignment of zircon was removed by the company and is now at the plant site at Dambulla. However, there are no records at the Geological Survey and Mines Bureau that transport permits were obtained.

On this occasion, Lanka Mineral Sands Ltd. sold the zircon to Alchemy for a mere US $ 87 per tonne which is far below market price — estimated at US $ 140 per tonne.  The difference between the FOB price and ex factory price per tonne of crude zircon is US $ 25.12.

Hakeem's argument for favouring Alchemy appears to be based on the fact that Alchemy promised to upgrade the raw mineral to premium and ceramic grades. De Silva maintains that merely on the cover of value addition companies should not be treated in a preferential manner. He asserts that if Alchemy was genuinely interested in upgrading crude zircon to premium and ceramic grades, a well structured project proposal should have been prepared.

Hakeem's cabinet paper is in fact inconsistent with the sequence of events that followed since this tender was called

Hakeem's camp is now accusing Nawaz Hadjiyar a close confidant of Rukman Senanayake of trying to cancel the tender in order to award it to a favoured party.

False allegations — Wijeynanda 

Director General, Geological Survey and Mines Bureau,  Dr. N. P. Wijeynanda confirmed that he has resigned from his post as a result of his superior’s damning report on this issue.

“The allegations in my chairman’s report are totally false,” he said, adding, “I was merely the technical man on this committee and did my job to the best of my ability.”

Wijeynanda denied he had been under any pressure to recommend this award to two of Nawash’s companies — namely, Wheels Lanka and Alchemy Boulders.

Wijeynanda maintained that Wheels Lanka has made the highest offer and were thus considered.  He reiterated that an ex-factory price was determined “because we were not sure they would be able to ship the sand out of Sri Lanka as a result of the LTTE threat in Pulmuddai.”

He said TEC never negotiated any prices but only made the necessary recommendations to the CATB.

“To my knowledge it was a perfect tender — everything was done to the letter.” Wijeynanda said.

He maintained that his chairman’s observations have been submitted on his (Wijeynanda’s) file which as a mere TEC member “is incomplete.”

Wijeynanda added that unfortunately he has been made “the scapegoat” for an issue “totally out of my purview and control.”

* * *

The glaring discrepancies

There were only two companies recommended by TEC for the sale of 60,000 metric tonnes of crude zircon sand.  Subsequently, these two companies have been offered 150,000 tonnes at an ex-factory price (which is less than US $ 112.11) to be negotiated later by Lanka Mineral Sands Ltd.

The companies, Wheels Lanka Ltd., and Alchemy Heavy Metals Pvt. Ltd. (a sister company of Alchemy Boulders) have been offered the total quantity of 150,000 tonnes of crude zircon.

Documentary evidence proves that T. L. M. Nawash is chairman of all these three companies. Alchemy Boulders and Wheels Lanka had initially bid separately for 60,000 tonnes and 30,000 tonnes respectively.  However, Rauf Hakeem’s cabinet paper reveals that Alchemy Heavy Metals ( Pvt) Ltd., which was not a party to this tender has been recommended for the sale of 90,000 metric tonnes which was not earlier available on this tender.

Refined zircon in the international market is sold from US $ 350 to US $ 450 per tonne.  This demand is expected to increase over the next five years mainly due to the expanding ceramic industry in China. 

Shockingly, documentary evidence proves that Derby & Co. which tendered for 1000 tonnes of rutile on the same invitation had quoted US$ 315 per tonne FOB from Pulmuddai.  The company was the highest bidder but not awarded the tender.  In a letter dated January 31, 2003 by chairman of Derby & Co. to Nassar, the company has strongly protested charging that the entire tender procedure in this instance was both morally and commercially unacceptable.

      Despite being informed of the offer by De- rby who later increased their bid to US $ 400 per tonne for 1200 metric tonnes of rutile, neither TEC nor the CATB did anything about their offer.

De Silva points out that “it is quite clear from the sequence of events that have followed since the calling of this tender, two parties have been favoured on the pretext of value addition at a plant supposed to be commissioned at Dambulla which is yet to be furnished with machinery and equipment.”

Also, that Hakeem has incorrectly stated in his cabinet paper in para 17, the Eastern Development and Muslim Religious Affairs Ministry and the Geological Survey and Mines Bureau will monitor the purification process at Dambulla and ensure that only the value added products are exported by Alchemy Heavy Metals Pvt. Ltd. 

Chairman GSMB, R. J. de Silva states that neither he nor the board of directors of the GSMB nor the general manager are aware of any such agreement with Rauf Hakeem’s Ministry.

* * *

Zircon prices on the rise

The zircon market has seen a reversal of fortunes over the past two years. Declining consumption in 1997 and 1998 following the Asian economic crisis saw prices fall to under $300/t by mid-1999, their lowest level since 1995.

The fall in price was due to competition between suppliers, which offset improvements in demand. There has been a marked increase in zircon consumption from 1999 to 2000. The resultant tightness in zircon supply provided the impetus for significant price increases, and some precautionary purchases by consumers added to the shortages of supply.

Virtually all zircon output is a result of the production of titanium minerals and most producers have little flexibility to control production levels to match market demand. Consequently, zircon has had a relatively turbulent price history. It is now expected that future prices for zircon will stabilise in the range of US$340-350/t FOB for bulk material.

More than 80% of zircon consumption is now estimated to be in applications for which there are few, if any, cost-effective substitutes for zircon at current price levels, a situation which provides a significant stabilising influence on the price of zircon.

* * *

TEC and CATB jointly responsible         Chairman GSMB

Chairman, Geological Survey and Mines Bureau, R. J. De Silva  said, “I don’t know what the decision of cabinet with regard to this tender will be.  I was asked to give my observations and I did so in a report to Dr. Ratnayake who is Secretary of the Sub Committee on Tenders and Budgets.”

De Silva confirmed that his report was based on the file submitted to him by Dr. Wijeynanda.  He said Minister Rauf Hakeem may not have been aware of the serious connotations surrounding this tender and merely “signed in good faith” documents presented “by his Ministry officials.”

        De Silva said he does not know if his Director General, Dr. Wijeynanda was under any kind of pressure with regard to this tender but said, “If what I have stated in my report is found to be correct, I suppose everyone has to take joint responsibility. By everyone, I mean all members of the TEC and the CATB.”

* * *

Rauf Hakeem says...

Shipping, Eastern Development and Muslim Religious Affairs Minister Rauf Hakeem said his cabinet colleague Rukman Senanayake “is making an unnecessary fuss over this.”

“This has nothing to do with him — he is just angry with Dr. Wijeynanda and as a result is jeopardising this whole tender. If Rukman is objecting to the Geological Survey and Mines Bureau (GSMB) monitoring the value addition process of the crude zircon sand together with my Ministry, it is preposterous,” Hakeem said.

He added that the GSMB is there for this purpose “and if I can’t use it — then what’s the use?” With regard to the cabinet paper, which seriously incriminates Hakeem, having introduced a company that never ever made a bid, he said, “I don’t know about this — I only saw the name Alchemy and signed the paper.

He claimed that the cabinet paper was prepared by his Ministry Secretary, D. Dissanayake. “I trust Dissanayake implicitly. He is a senior public servant — and I am not going to disclaim any responsibility for signing this paper — I satisfied myself that everything was in order, before doing so,” Hakeem said. Asked why then he approved the sale of 90,000 metric tonnes of crude zircon to a company that never made a bid to this effect he said, “I only put my rubber stamp in good faith — I am only a vehicle of submission — this aspect has to be looked into.”

He meanwhile reiterated strongly that he has got the best possible price for the crude zircon sand at US $ 112.12 per tonne. Hakeem maintained that he realised the internal tender board procedure adopted by Chairman, Lanka Mineral Sands Limited, Muhammad Nasser “was all wrong” which is “why I changed it and insisted on a Cabinet Appointed Tender Board (CATB) which opened the market to international buyers and a better selling price.”

Asked why the TEC and CATB recommendation has been left at a yet to be determined ex-factory price, Hakeem stated, “this maybe because current transport rates have to be included….” He asserted that what both TEC and the CATB have taken into consideration is that Nawash’s three companies have pledged to export the minerals after upgrading the sand. None of the companies that made a bid had made this offer, he explained.

Hakeem maintained that Nawash has a fully quipped factory at Dambulla, which can adequately deal with upgrading the crude zircon sand. Referring to the GSMB Chairman’s  report, Hakeem said, “he does not understand. De Silva is just unnecessarily wanting to confuse this whole thing.” Hakeem finally conceded, “let the Cabinet Sub-Committee on Economic Affairs determine these things.

“I am not going to grudge them their judgement on this matter….” He added that aspersions are being cast by some of those who lost the tender, “there are vested interests who are out to destabilise this whole process…” he accused, charging that he is being unfairly blamed. “I stand by my statement. I have done everything regarding this tender in perfectly good faith and there is no foul play.

“The entire process was very transparent every step of the way…” Hakeem reiterated. He said he was unaware of attempts by the previous regime to establish an upgrading plant at Warakapola…. But, said he is trying to put up one at Yanoya in the Eastern Province — due to extensive availability of fresh water in the area. Hakeem maintained that it is impossible to upgrade the plant at Pulmuddai due to the recurring problems with the LTTE.

With regard to the TEC members Hakeem asserted that “it was a very good mix,” and “all the officers were duly qualified to evaluate the tender under review.”

* * *

Tender procedure violated

The Sunday Leader has proof that Chairman, Lanka Mineral Sands Limited, Muhammad Nassar has personally written to prospective buyers telling them how much they should quote for one metric tonne of crude zircon. Upon receiving a reply he has approved letters of award.

One such international company is Central Hong Kong, Nassar wrote to on November 7, last year.  In this letter he stated that the internal tender board of Lanka Mineral Sands Limited of which he is chairman, has decided on a minimum price of US $ 127 C & F per metric ton of crude zircon from Pulmuddai. This figure was subject to certain conditions of the product on sale.

Giving a personal fax number, he requested eight companies to confirm their offers to him or to S. A. Nandadeva, who was chairman of the company’s Technical Evaluation Committee.

His offer was duly accepted and Nassar in this manner sold an approximate 8000 metric tonnes of crude zircon to eight different buyers at a quantity of 814 metric tonnes each.

Such sales exceeded Rs.10 million, which is the cut off point for which Nassar has the authority to negotiate prices and sell the mineral sand.

* * *

Denies allegations

Chairman, Lanka Mineral Sands Limited,  Muhammad Nassar denied any attempts to manipulate this tender. “This was done totally by the CATB and concluded. We still don’t have a decision — and have been waiting for one to get rid of our accumulated stocks,” he said.

Nassar stated that this particular tender was given wide publicity and evaluated “by completely unknown persons.”  When told his own General Manager, S. Nandadeva was on the Technical Evaluation Committee, Nassar admitted this was so, but claimed, “he never kept me informed on the status of this tender.”

He maintained that the entire tender had been monitored exclusively by the Eastern Development and Muslim Religious Affairs Ministry.

For someone who claimed to know nothing of the evaluation process, Nassar insisted the sale had gone to the highest bid, which he says was Wheels Lanka. He claimed he did not know that Shenyan Astron in fact was higher in their original offer inclusive of FOB.

“I was however astonished that a local company could offer US$ 135 C & F” he said, referring to the original offer made by Wheels Lanka.

Asked why LMSL cannot upgrade the crude zircon sand themselves and thereby negotiate a much higher price, he said Pulmuddai has been a totally disturbed plant as a result of the war — “we are not doing any production — we don’t have enough fresh water to process and upgrade the sand.”

Asked why a proposed upgrading plant at Warakapola by the previous regime has been abandoned, Nassar said, “I stopped work at this site as they were depending for water on a stream that brings the town’s sewage.  The site was not at all feasible.”  He asserted he stopped any further construction after having informed his Minister, Rauf Hakeem.

* * *

Rukman Senanayake says…

Environment and Natural Resources Minister, Rukman Senanayake when questioned said “I am in the sub committee for tenders. If it is proved that this tender has been mishandled and we simply won’t permit an award.”

Senanayake claimed he has not yet seen the report by R. J. de Silva since it has been handed over directly to Dr. Ratnayake.  “After Dr. Ratnayake studies this report he will place the necessary recommendations for further action by us,” Senanayake said.

Senanayake asserted that he requested an inquiry on this matter after learning that the Geological Survey and Mines Bureau together with the Eastern Development and Muslim Religious Affairs Ministry would jointly monitor the purification process of crude zircon. 

“Dr. Wijeynanda had no right to lend any such assurances to Hakeem’s Ministry in this regard without ensuring he had my approval as well as that of the GSMB board of directors,” Senanayake pointed out, explaining that such a monitoring process would require finances to be released from his Ministry.

The Minister added that the Sub Committee on tenders cannot find fault with or reprimand individuals found guilty of manipulating a tender for personal gain but can only cancel the tender in question.

* * *

The Sunday Leader findings confirmed

Finance Manager, Wheels Lanka (Pvt.) Ltd., Mohammed Ali also contacted The Sunday Leader on Friday regarding this matter. Asked how he knew this story was being worked on, he said, “someone for Lanka Mineral Sands called my managing director and told him.”

This alone proves the complicity between the sellers and the buyers, the latter who are yet to be awarded this tender, and confirms the allegations the investigation by The Sunday Leader revealed. Ali meantime went onto say that Wheels Lanka had offered the highest price for this tender but maintained “it is now being dragged because I think the Environmental Ministry has some vested interest.” 

* * *

Choksy says….

Finance Minister, K. N. Choksy, said that when this matter came before the Sub Committee on Tenders, “Rukman Senanayake raised certain objections and wanted an inquiry report prepared.”

Speaking to The Sunday Leader from Tokyo, Japan, Choksy said he has not yet seen the report but is certain “it will be made available for me upon my return to Colombo.”