Sri Lanka-China fertilizer kerfuffle: Committee appointed on money paid for shipment | Sinhala News

Sri lanka News – Sri Lanka’s ministry of agriculture has appointed a committee to determine steps to be taken about 6.9 million US dollars the cash-strapped nation was compelled to a pay Chinese fertilizer company last year over a deal that had gone awry.

Agriculture Minister Mahinda Amaraweera told parliament on Thursday September 01 that the committee is headed by the secretary to the ministry and that the Attorney General has also advised on a course of action.

Amaraweera said that, so far, efforts to obtain a refund or a consignment of chemical fertilizer in place of the money have turned futile.

“Action has to be taken soon,” he said, responding to opposition lawmakers.

In December 2021, at a time when Sri Lanka’s ill-advised foray into 100-percent organic farming, the government decided to pay 6.9 million dollars to China’s Qingdao Seawin Biotech Group Co Ltd, whose organic fertilizer was rejected by the island nation.

Sri Lanka’s National Plant Quarantine Service (NPQS) had claimed that samples of the fertilizer contained harmful bacteria, prompting the Chinese company to demand 8 million US dollars from the agency in early November.

Related: Chinese fertilizer firm demands US$8mn in damages from Sri Lanka testing agency

The shipment was rejected by Sri Lanka while en route to the island, with the authorities denying entry to what opposition lawmakers and other critics had called a ship of faeces.

Sri Lanka’s scientific findings were roundly rejected by the Chinese company, with the Chinese embassy in Colombo going as far as to blacklist the state-run People’s Bank for not making the payment owed to the company.

The Chinese company subsequently sought arbitration in Singapore, and Sri Lanka later decided to settle the matter by paying 6.9 million dollars to the fertilizer company, on terms purportedly agreeable to both parties.

Sri Lanka’s state-run People’s Bank made the payment on an letter of credit it had issued after a court order barring the lender, was removed.

The botched deal, analysts say, soured China’s relations Sri Lanka.

The Indian Ocean country is now going through the worst currency crisis in its central bank’s history. (Colombo/Sep01/2022)

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