Global Economy

Sri Lankan state-owned company blocks USD 4.9 million payment to Chinese company

Sri Lankan government-owned Ceylon Fertilizer Company has blocked a payment of USD 4.9 million to China-based Qingdao Seawin Biotech over the shipment of contaminated fertilzer containing harmful bacteria. Ceylon Fertilizer has obtained a Commercial High Court order to block the payment.

”The enjoining order has prevented the People’s Bank from making any payment under a Letter of Credit opened in favour of the Chinese company, Qingdao Seawin Biotech Group Co.,” a statement from the President’s Office read. The Colombo Commerical High Court had issued the order on October 22 against Qingdao Seawin Biotech, and its local agent the People’s Bank. The order stated that the Chinese firm was supposed to ship sterile organic fertilizer as per the tender it had won but its shipping document read that the consignment may contain micro-organisms. The ship was not allowed to unload its cargo. ”

“The National Plant Quarantine Services had tested the sample sent to them and had confirmed the presence of organisms, including certain types of harmful bacteria,” the statement said. “The consignment is a partial shipment worth more than Rs 100 crore (USD 4.9 million) that was procured through a tender process initiated by the Ministry of Agriculture,” the President Office read.

The Chinese Embassy here had disputed the government’s claim earlier this month. Meanwhile, the President’s Secretary PB Jayasundera on Saturday asked the police to investigate an alleged fraud in procuring Nano Nitrogen liquid fertilizer from India.

The fertilizer issue has triggered farmer protests due to non-availability of chemical fertilizers. President Gotabaya Rajapaksa in May ordered a halt to importing chemical fertilizers to turn the island nation’s agriculture sector to 100 per cent organic.


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