Controversy has erupted in Sri Lanka following the shocking revelation by the Auditor General’s Department of an astounding million-dollar loss attributed to the puzzling absence of substantial evidence provided by the Sri Lanka Air Force (SLAF) during its crisis management of the MV X-Press Pearl ship from 21 May to 19 August 2021.
The latest available audit report conducted by the National Audit Office (NAO) of the Auditor General’s Department on the SLAF has further revealed that a compensation of approximately $ 2.8 million dollars, earmarked for the significant role played by the SLAF in mitigating the X-Press Pearl ship crisis from 21 May to 19 August 2021, is yet to be reimbursed.
This substantial sum also includes an additional risk allowance of around $ 1.1 million, which remains unpaid due to a lack of sufficient evidence provided by the Air Force, the report revealed.
As further revealed by the NAO, the failure to provide the necessary evidence has resulted in the refusal of the parties responsible for compensation to make the much-needed payment. Consequently, the entire amount has been lost to the Sri Lankan Government.
“Compensation of $ 2,875,136.55 should have been reimbursed for the contribution made by the Sri Lanka Air Force for suppressing the threat of the X-Press Pearl ship from 21 May to 19 August 2021. Moreover, further evidence required for obtaining the risk allowance of $ 1,149,500 included therein had not been given by the Air Force. As the parties paying compensation had refused to make the payment, the said total sum had been lost to the Government,” the audit report stated.
The report further revealed that the Attorney General’s Department had been briefed on numerous occasions regarding the invaluable contribution made by the Sri Lanka Air Force in extinguishing the fire on the ill-fated X-Press Pearl and in cleaning up the polluted coastal areas in the aftermath of the accident. As a result, a request was made on behalf of the Sri Lanka Air Force for a sum of approximately $ 3.4 million.
However, the relevant shipping insurance company had expressed reluctance to fulfil the Air Force’s request for the risk allowance. This reluctance stems from the failure to substantiate the claim with adequate evidence, it is revealed.
“A large amount of money is lost to the Government due to failure in giving proper evidence for claiming the risk allowance relating to granting of compensation. As such, the Sri Lanka Air Force should give proper evidence,” the report stated.
In response to these allegations, when contacted by The Sunday Morning, SLAF Spokesman Group Captain Dushan Wijesinghe acknowledged that the amount was still pending but clarified that the expenses should be returned to the Treasury, not to the SLAF.
He further explained that the recovery of expenses was handled by the Marine Environment Protection Authority (MEPA) and the expenses incurred by the SLAF during fire extinguishing and other related work had been included in the overall compensation package of the country.
The Government has taken legal action in Singapore to address this matter and the case is currently pending. Once the case concludes, depending on the outcome, the SLAF expenses will also be returned to the Treasury, the SLAF Spokesman explained.
There have been several complaints from several parties including Government ministers regarding the manner in which the MEPA carried out post-incident inquiries and legal action.
Sri Lanka filed a lawsuit against the owners of the X-Press Pearl in Singapore on 25 April.
The litigation of the X-Press Pearl incident is being handled by a Singaporean legal firm, appointed and retained with the approval of the Cabinet of Ministers, to represent the interests of the Government.
On 20 May 2021, the Singapore-flagged vessel caught fire and sank off the west coast of Sri Lanka. It carried 1,488 containers, including 81 with dangerous goods, 25 tonnes of nitric acid, 348 tonnes of oil, and up to 75 billion small plastic pellets known as nurdles (used to make plastic products).
As ascertained by Sri Lankan experts, the total loss of $ 6.4 billion is only for environmental damages. According to the MEPA, legal action will be instituted to claim the environmental damages.
Sri Lanka has so far received a total of $ 7.85 million from the ship’s insurer in three tranches. In July 2021, the country received the very first payment of $ 3.6 million and another $ 1.75 million in January this year. Then again, it received $ 2.5 million this month.
Nevertheless, the authorities claimed that the total claim received so far was very low when compared to the interim damage claim of $ 40 million sought by them in June 2021.