The Hon. (Dr.) Nalinda Jayatissa - Minister of Health and Mass Media and Chief Government Whip

¶ 01 Hon. Speaker, this debate should become a significant one in parliamentary history. We are ready not only to answer by numbers but to reveal clearly what happened. I listened to the two principal Opposition speakers who stabilized and presented this NCM. They have been the main voices on coal for months. But from their speeches, it seems this debate will not go beyond “the aunt’s account at Homagama People’s Bank.”

¶ 02 First, coal procurement did not begin under our government. For 15 years coal has been supplied to Lakvijaya. As per the Auditor General, from July 2010 to March 2026, 462 coal vessels have arrived, about 60,000 MT per ship, roughly $4–6 million per cargo—over $2.5 billion spent historically. Only now are we institutionalizing proper procurement and testing. What happened in the past 15 years? Even when those now bringing this NCM were in government, coal was supplied. But no proper testing or tendering systems were established.

¶ 03 From 2010 to 2015 there was no tender process; some procurement steps started but were stopped, and Cabinet awarded supplies. Even when tenders were called and closed, Cabinet overrode and gave supplies. In that era, Load Port/Discharge Port reports were not even relevant. This process was so egregious that in SCFR/394/2015, the Supreme Court noted a transaction that shocked the conscience of the court, and nullified that tender.

¶ 04 Later, tenders (term and spot) were introduced, but irregularities persisted. There is a $1.5 million fraud case still before courts concerning 18 vessels. Against that background, we placed procurement on a proper footing. We registered 26 suppliers; 11 bid. We allowed 28 days—extended from 21 with NPA approval at the supplier’s request. This was a 4.5 million MT, three-year tender; in another context, for a similar 4.5 million MT over three years, only 35 days were allowed without extension. We extended ours to 28. Anyone with an issue could go to the Appeals Board. No one did.

¶ 05 Hon. S.M. Marikkar falsely said we changed prequalification. The change reducing recent supply and GCV thresholds was made in 2023, before us, and continued thereafter. We did not alter it. Of the 26 registered, 11 bid, and we awarded to the lowest evaluated.

¶ 06 The real issue raised is Load Port vs Discharge Port Reports. No one can allege ministerial interference in selecting the company. If anyone claims the subject Minister intervened to give the tender to a company, prove it. After tender close, there was time to appeal to the Procurement Appeals Board regarding a $400–500 million transaction. No one went. Previously, if their preferred party did not get the tender, Cabinet intervened. Not now. We conducted procurement correctly and chose the lowest price.

¶ 07 Why was the calling delayed? The final cargo of the previous tender was unloaded on 08 December. The delay did not affect the tender. On quality testing: we are now using both Load Port and Discharge Port reports from accredited labs and reconciling differences. Historically, up to 2019, payments were made solely on Load Port Reports—the lab chosen by the supplier “with the buyer’s concurrence.” Did LCC truly concur? We do not know. But during 2015–2018 when Hon. Ajith P. Perera was State Minister of Power and Renewable Energy, they paid only on Load Port Reports. If we did the same now, we could have paid for all 13 vessels without issue because all had passing Load Port Reports. The Discharge Port Reports were simply not taken. Post-2019 this gradually changed, but inconsistently.

¶ 08 We now insist on both accredited Load and Discharge reports. Yes, there are discrepancies—e.g., 6,150 kcal/kg at Load, 5,700–5,800 at Discharge. We must investigate why; we are doing so through accredited mechanisms.

¶ 09 Our priorities: (1) ensure proper procurement; (2) ensure proper quality testing; (3) secure supply and minimize delays. Deviations in GCV, ash, sulphur, and moisture lead to penalties—that is why we are now proceeding to recover about $17 million in penalties. We have retained about $15 million and will, if needed, pursue legal action to recover losses. We will not burden the public; there will be no tariff increase because of this issue. Recent CEB cost submissions show lower coal generation costs this year’s second quarter than last year’s, and PUCSL’s tariff work predates this issue.

¶ 10 This is a 15-year-old broken system we are fixing. In the past, coal was bought at $98.5 but also at $134 and even close to $280 per MT in some periods. We are moving to competitive procurement and proper testing. Those who benefited earlier must now compete by offering lower prices and proper reports.

¶ 11 They tried to pin other allegations such as “container 323”; note the President himself appointed a committee, and our MPs called for COPE inquiries. We welcome scrutiny. In fact, by the end of this debate, we will propose a Parliamentary Committee to examine all 462 vessels since 2010—examine who was paid based on only Load Port Reports, who deviated, who benefited; and take action, including legal, for past wrongs. We are fixing the system going forward and will probe past misdeeds. We do not protect wrongdoers.

¶ 12 Therefore, we assure: we will not pass this burden onto the public; there will be no power cuts due to this; we will ensure uninterrupted supply while addressing reservoir shortfalls and higher global oil prices. Attempts to paste corruption labels on these Ministers will fail unless you bring evidence—otherwise you need a rocket to the moon to land a charge. Bring your facts. As for the claim about shortened bid periods—there was NPA-approved extension to 28 days. We are instituting the very systems that were absent for 15 years, and we will correct technical gaps.

¶ 13 This Special Audit Report is important; it covers 2010–2015 and 2020–2022 and how institutions behaved. We will investigate, correct the system, and proceed. If you can, bring details beyond the “aunt’s bank account” today.

¶ 14 We are a government elected on an anti-corruption mandate; those now opposing were rejected for their corruption. We will act accordingly, fix the system, and face down the cartels in coal, oil, and pharmaceuticals. Thank you for the time, Hon. Speaker.