Shipment company

Committee Named on Money Paid for Expedition – The Island

ECONOMYNEXTThe Department of Agriculture has appointed a committee to determine what action to take An estimated US$6.9 million the cash-strapped nation was forced to pay a Chinese fertilizer company last year for a deal gone wrong. Agriculture Minister Mahinda Amaraweera told parliament on Thursday (01) that the committee is headed by the ministry secretary and the attorney general has also given his opinion on a course of action.

Amaraweera said that so far efforts to get a refund or a shipment of chemical fertilizer instead of cash have been unsuccessful.

“Action must be taken quickly,” he said, responding to opposition lawmakers.

In December 2021, at a time of Sri Lanka’s misguided foray into 100% organic farming, the government decided to pay $6.9 million to China’s Qingdao Seawin Biotech Group Co Ltd, whose organic fertilizer has been rejected by the island nation.

Sri Lanka’s National Plant Quarantine Service (NPQS) had claimed that fertilizer samples contained harmful bacteria, prompting the Chinese company to demand US$8 million from the agency in early November. The shipment was rejected by Sri Lanka while en route to the island. , with authorities denying access to what opposition lawmakers and other critics had called a ship of excrement.

Sri Lanka’s scientific findings have been categorically rejected by Chinese society, with the Chinese Embassy in Colombo going so far as to blacklist the state-run People’s Bank for failing to make the payment due to the society. The Chinese company then filed for arbitration in Singapore, and Sri Lanka later decided to settle the case by paying the fertilizer company $6.9 million, on terms allegedly acceptable to both parties.

The state-run People’s Bank of Sri Lanka made the payment on a letter of credit it had issued after the removal of a court order barring the lender. The botched deal, analysts say, has soured China’s relations with Sri Lanka.