The Cabinet has approved a Rs. 566 million tender to supply tyres to the Sri Lanka Transport Board (SLTB) despite a technical evaluation committee (TEC) finding that the product sold by the winning bidder had deviated from a multitude of fixed, predetermined specifications.
The order, equivalent to the SLTB’s four-month requirement for tyres, has been granted to M/s Ferentino Tyre Corporation (Pvt) Ltd, according to official documents seen by the Sunday Times.
The company is owned by controversial businessman Nandana Lokuwithana. In 2017, he secured a sweetheart deal from the Yahapalana Government to set up his factory, including a massive discount on the lease premium on 100 acres of land in Horana and sweeping tax concessions.
Ferentino’s competitor for the bid, M/s CEAT Kelani International Tyres (Pvt) Ltd, was rejected as its price package was around 15 per cent higher and because it did not comply with two technical requirements to meet the SLTB’s expectations. The latter is related to the “minimum load capacity” of one type of tyre; and the “minimum expected guaranteed mileage” of all four tyre sizes.
CEAT subsequently went to the Procurement Appeals Board (PAB) countering that the successful bidder, Ferentino, had secured the tender based on “untested/unproven mileage” and that this was “totally against the bid evaluation procedure and good governance practices”. It urged the PAB to reassess the evaluation process.
The PAB, however, rejected CEAT’s appeal and upheld the Highways Ministry Secretary’s decision to award the tender to Ferentino. It maintained that, where CEAT had failed, the selected bidder offered a tyre type that met the SLTB’s requirements on load capacity and minimum guaranteed mileage. CEAT had offered less guaranteed mileage on all four tyre sizes in contrast to Ferentino, it also said.
The Cabinet subsequently approved Ferentino’s bid. But there are now concerns in transport circles about a number of crucial technical specifications that the winning bidder had itself departed from–and the possibility that this could impact negatively on public safety.
For instance, the three-member TEC has found the Ferentino’s tyre of size 7.50 x 16 deviated from the required overall diameters ordered by SLTB.
In samples provided by Ferentino, the “load capacity double” of this tyre also fell below the weight required by SLTB. (“Load capacity double” refers to how much weight one tyre is rated to carry when paired with another).
The groove depths of these tyres were several millimetres lower than the SLTB specifications. More critically, in one out of the three Ferentino tyre samples that engineering staff inspected, the tyre number–which is indicative of the date of manufacture and must be stamped on the date the product is made–was “unclear”.
“We, therefore, recommend that the stock of 7.50 x 16 tyres do not conform to the Sri Lanka Transport Board specifications as per the samples we have tested,” the TEC holds.
In tyre size 8.25 x 20, the SLTB ordered an outer diameter of the tyres to be 988mm. The three inspected samples had outer diameters of 970, 962 and 968mm each, the TEC observes, adding that this stock of tyres also did not conform to SLTB requirements.
The tyre size 9.00 x 20 had a more serious problem, the TEC holds, indicating that the manufacturing date had been tampered with.
“While the tyre numbers of these tyres are very clearly marked, it is clear that after the production of the tyre, rubber has been applied on the spot and the number marked on top of it,” its report says. “The tyre number should be recorded during the production process. The production year and week of production of a tyre can be known through this number. If the number is printed later, there is a problem in determining the age of the tyre.” This stock is also deemed by the TEC to be outside of SLTB specifications.
In tyre size 1000 x 20, the tyre numbers of two out of three samples were unclear and the outer diameters as well as depth of the tyre treads were lower than ordered. The stock is held to have deviated from SLTB requirements.
Despite these issues, SLTB Chairman S.M.D.L.K.D. Alwis in July defended the tender award to Ferentino and revealed that the company had already started supplying the tyres. He admits in a letter seen by the Sunday Times that engineers who inspected the products had highlighted the shortcomings.
“But considering the current tyre crisis in SLTB and the need to speedily put 175 buses on the road under the project of rehabilitating 400 buses, I give approval to accept 1,032 tyres while notifying the relevant company to correct the minor defects in the parameters indicated by the technical reports and to re-manufacture the tyres,” he states.