The Samagi Jana Balawegaya has exposed both inside and outside Parliament that the coal imported by the Lanka Coal Company for the year 2026 does not meet required quality standards.
From the very beginning of the procurement process for coal imports, a large number of frauds, corruption, and irregularities have taken place. Under standard procedures, a period of 42 days must be allocated for the coal procurement process. However, this period has been reduced to less than 21 days. By reducing the procurement period from 42 days to under 21 days, many companies are unable to participate in the coal procurement tender process.
Furthermore, to qualify for participation in the coal procurement process, a company must have imported 500,000 metric tons of coal during the past three years. Out of this, at least 100,000 metric tons must have had a calorific value of 5,900 kilocalories or more. Additionally, the company must have earned an income of USD 150 million over the past three years. These qualifications are mandatory for eligibility in the coal procurement process. However, the fundamental requirement of importing 500,000 metric tons of coal over the past three years has been altered. The government has taken steps to change this basic qualification in order to allow smaller companies to participate in the procurement process.
By reducing the number of procurement days and lowering the requirement of importing 500,000 metric tons to 100,000 metric tons, a pathway has been created for corruption.
In order to meet the country’s electricity demand, all three units of the Norochcholai Lakvijaya Power Plant must be operational. It is also not possible to import coal throughout the entire year. Therefore, the total annual coal requirement must be imported within a six-month period. Additionally, Sri Lanka must receive a quality assurance report on the coal before the coal vessel arrives in the country. However, even by the time the first coal ship arrived at the Colombo Port, the relevant quality report had not been received. Despite this, the coal was fed into the boilers of the power plant.
The Samagi Jana Balawegaya revealed that the first shipment of coal did not meet the required calorific value of 5,900 kilocalories. However, without a proper report, the Minister of Power and Energy declared that the coal shipment met quality standards. Eventually, based on reports received from India, it had to be accepted that the coal shipment did not contain the required calorific value.
When the Samagi Jana Balawegaya pointed out that there was a quality issue with the coal, the Ministry of Power issued a statement at the time the second coal vessel arrived and the coal consignment was released, stating that a penalty would be imposed on the relevant company.
However, an assessment must be conducted on the losses incurred by importing substandard coal. Secondly, the damage caused to the power plant equipment after substandard coal was fed into the boilers must be calculated. Furthermore, electricity generation capacity is reduced, making it impossible to generate 300 megawatts. If the shortfall is met through diesel power plants, the cost incurred for this must be assessed. Additionally, the volume of ash produced by this coal and the environmental damage caused must also be evaluated. Despite this, the current Minister of Power and Energy is defending the substandard coal import mafia and attempting to conceal the losses incurred by the country.
According to the agreement, if any two out of 25 coal shipments are rejected due to substandard quality, the coal contract must be canceled. However, the Minister of Power and Energy states that penalties will be imposed on the company that imported substandard coal. Accordingly, the Lanka Coal Company announced that a penalty of USD 2.1 million had been imposed for the first shipment. However, there is no explanation as to how this penalty was calculated. Was the damage caused to power plant machinery due to the use of substandard coal taken into account? Was the additional cost of purchasing electricity from diesel power plants calculated? The Minister has not clearly answered these questions.
A third coal vessel has also arrived in Sri Lanka. However, unloading has been delayed due to an issue at the port jetty. Whether this is true or not remains unclear. Nevertheless, reports indicate that the quality of coal in the third vessel is even worse than that of the first vessel.
If the quality report of the third coal shipment is received promptly, it will become necessary to cancel the coal tender, as the coal in the first and second shipments is substandard. Therefore, the government is deliberately delaying the unloading of the third coal shipment while swiftly collecting penalties. If the coal in the third shipment is also found to be substandard, the government will be able to claim in advance that a penalty had already been imposed for the first shipment. Who is the government trying to protect in this manner? Who is responsible for this large-scale fraud?
If substandard coal shipments continue to arrive in Sri Lanka, power cuts will become unavoidable after March. Due to reduced generation capacity from substandard coal, electricity will have to be purchased from diesel power plants. This situation is highly likely to lead to power cuts.
The government that came to power claiming to change the system is now involved in a coal tender fraud larger than the Central Bank bond scam. Reports also indicate that the government is preparing to purchase coal at higher prices through a spot tender. The government may even argue that coal must be purchased at higher prices to prevent power cuts.
If there has been no fraud or corruption in coal procurement, the government has the ability to cancel the current procurement process and import quality coal. Instead, the government’s readiness to call a spot tender clearly indicates preparation for another large-scale fraud. The true nature of the National People’s Power government, which claimed not to steal even a single rupee, has now become clearly evident.
