The Hon. Arkam Ilyas - Deputy Minister of Power

¶ 01 Hon. Presiding Member, thank you for the opportunity to clarify several points on coal quality following the recent Auditor General’s Report and ensuing debate.

¶ 02 First, the allegation that the tender was given to an unregistered entity. It is said that on 18 August 2025, when bids were called, the company had not fully paid the USD 5,000 registration fee. In fact, on 18 August 2025 they paid USD 5,000; USD 20 was deducted in transit/charges. That USD 20 was received on 22 August, and the receipt issued then. More importantly, the Standing High-level Procurement Committee minutes, item 5.7, state that eligibility requires USD 5,000 to be paid before bid submission, not before issuing bidding documents. Therefore, payment any day before bid submission (up to mid-September) was compliant. I table the SHLPC minutes.

¶ 03 Second, the claim that umpire samples were not checked at load or discharge ports. At the load port, for the 13th and 14th vessels, samples were tested through Bureau Veritas in South Africa (an accredited lab). At the discharge port, nine umpire samples have already been sent to Bureau Veritas in Australia, including from the 1st, 9th and 12th vessels, and three among the first six vessels. Thus, the assertion that umpire samples were not checked is false; results will guide our decisions.

¶ 04 Third, accreditation of labs. Mitra SK South Africa holds accreditation, from 2025 to 2030, for all parameters relevant to our penalties—GCV, sulphur, fixed carbon, size and ash percentage. They lacked only accreditation for ash composition analysis, which is generally not a penalty-determining parameter in Sri Lanka. For that, they used Mitra SK Indonesia, which had valid accreditation at contract award, valid until 29 December 2025; it subsequently expired. In this field, renewals take time as assessors visit; renewed certificates are often backdated to continuity. The lab has informed us in writing that the renewal process is underway and will be completed soon. I table the accreditation documents.

¶ 05 Fourth, supplier registration criteria. Since 2023, we have not changed the registration criteria. The company that won the special (emergency) tender was registered in 2023, not under our Government. According to my information, registration was done with High-level Procurement Committee approval at that time.

¶ 06 We acknowledge that certain clauses of the tender agreement should be updated to close gaps. For 2025–2027 we have made many changes. The Auditor General noted three-year rolling registration allowed 2023 registrants to bid in 2026 without review; we accept that observation. For the 2026–2027 tender, we have strengthened criteria:

¶ 07 - Define both load and discharge port labs to be selected by us, not the supplier. - Increase working capital requirement from USD 15 million to USD 30 million. - Increase turnover requirement from USD 150 million to USD 300 million. - Raise performance thresholds: supply volumes over the past three years and higher GCV (≥ 5,900 kcal/kg) with demonstrated shipments above one million tonnes; total three-year supply over two million tonnes. - Introduce a multi-supplier allocation with reverse bidding: the first-ranked gets 50%, and 2nd/3rd are invited to match; if matched, we split across two or three suppliers, reducing dependence on a single supplier.

¶ 08 On the point that the Agreement was signed before Attorney General’s clearance: officials informed me the Agreement was signed on 19 November, subject to the AG’s concurrence; I table the document.

¶ 09 We will continue to fix any remaining gaps.