Chinese Organic Fertilizer (Qingdao Seawin) Contaminated Cargo Settlement
Ceylon Fertilizer Co. Ltd & Colombo Commercial Fertilizers Ltd•Gotabaya Rajapaksa Administration (2019–2022)
What Happened?
Strictly neutral, evidence-based factual reconstruction from state audit, parliamentary and court records.
Emergency procurement of 99,000 metric tonnes of organic fertilizer from Qingdao Seawin Biotech Group Co., Ltd. following the sudden government ban on chemical fertilizers in April 2021.
99,000 MT of organic fertilizer valued at US$ 63.6 Million.
To import pathogen-free organic fertilizer to support paddy and crop cultivation under the President's 100% organic agriculture transition policy.
National Plant Quarantine Service lab tests in September 2021 detected harmful plant pathogens, specifically Erwinia bacteria, in sample batches. The Department of Agriculture rejected the shipment. In response to commercial arbitration and legal pressure from the Chinese supplier in Colombo Commercial High Court, the government agreed to deposit US$ 6.7 million (approx Rs. 1.38 Billion) to settle supplier claims for cargo already on board the vessel Hippo Spirit.
US$ 6.7 million (Rs. 1,382 Million) was paid out from state bank funds via People's Bank letters of credit to the Chinese supplier. The fertilizer ship was turned away and Sri Lanka received zero fertilizer in return for the compensation paid.
The Auditor General confirmed that procurement guidelines had been violated in the fast-tracked tender, pre-shipment tests were neglected, and US$ 6.7 million in public funds was expended with zero economic return to farmers or the state.
The Original Deal
2021-08-11Irrevocable Letter of Credit issued through People's Bank.
Immediate replacement of chemical fertilizer following nationwide chemical import ban.
The Actual Cost
SourcedDocumented Financial Consequence
Direct documented financial loss representing the court-settled payout of US$ 6.7 million (Rs. 1,382 million) for a rejected consignment with zero goods delivered.
Follow the Money: Chinese Organic Fertilizer (Qingdao Seawin) Contaminated Cargo Settlement
Ministry of Agriculture & State Fertilizer Companies
Executes emergency tender for organic fertilizer following Presidential decree.
Audit Report
Procurement Process & Approvals
NON COMPLIANT"Special audit found deviations from national procurement guidelines for fertilizer importation."
Auditor General Observations
DAMAGE OR_LOSS"NON-COMPLIANCE & FINANCIAL LOSS: Payment of US$ 6.7 million was made under a commercial settlement for contaminated organic fertilizer that was rejected by statutory quarantine authorities and never landed in Sri Lanka, resulting in a direct unrecovered loss to public enterprise finances."
Hold responsible procurement officials accountable and establish mandatory pre-shipment inspection protocols for all agricultural imports.
COPE Inquiry into Ceylon Fertilizer Company Settlement Payout
Committee questioned the legal basis of releasing US$ 6.7M in public funds to a foreign supplier after the cargo had been officially condemned as bio-hazardous.
No court cases filed for this record.
No corruption charges documented.
Governance Context & Decision Authorities
Government officials are documented for historical record. No personal financial benefit is inferred without independent judicial findings.
Approved settlement of supplier claims to prevent international trade dispute escalation.
Disbursed through commercial letter of credit.
No documented beneficiaries established in official judicial findings.
Sourced Chronological Timeline
Every milestone and date is indexed to verified state or judicial documentation.
Contract Awarded to Qingdao Seawin
Agreement signed for 99,000 MT of organic fertilizer.
NPQS Rejects Samples for Bacterial Contamination
Lab tests identify Erwinia plant pathogens.
US$ 6.7 Million Released Pursuant to Court Settlement
Payment released following lifting of enjoining order in Colombo Commercial High Court.