The Hon. Ajith P. Perera

¶ 01 Hon. Deputy Chairperson, we support the regulations presented by the Government on resource sharing in the telecommunications sector and recognize their importance. However, a serious situation is emerging. There are concerns within Sri Lanka Telecom (SLT) that Dialog’s move to acquire SLT and its subsidiary Mobitel would create a monopoly. There is apprehension that through new appointments at SLT and the Government’s approach to digitalization, SLT is being shepherded under a private company. Competition is essential, but it must be on a level playing field. If a monopoly forms, or others operate under a dominant firm, consumers will ultimately suffer on price and quality. While supporting these regulations, I draw attention to this crisis, the lack of transparency in SLT appointments, and conflicts of interest in decision-making.

¶ 02 A more pressing issue exists today. I am glad the Minister of Energy, Hon. Kumara Jayakody, is present. People have formed their impression of him only recently; before this Government we hardly knew him. Over the past period, the public has evaluated his conduct, capacity, methods and policies. We discuss this here as well.

¶ 03 I have before me the Special Audit Report by the National Audit Office dated 20 September 2022 on the procurement process for coal for the Norochcholai Lakvijaya Coal Power Plant for 2022–2025, including recommendations and required procedures for such heavy procurements. One key eligibility criterion is that bidders must have supplied at least one million metric tons of coal with GCV of 5,900 kcal/kg or higher over the last 36 months. Such capable companies exist globally, with quality, stability, and ability to supply. But the current tender appears awarded to a newcomer claiming experience of only around 100,000 tons—questionable—by undercutting, enabling the supply of inferior coal. You boast that you called a tender. Indeed, tenders are necessary; in our time we designed clean processes for wind and solar tenders with no controversy. But if you fix a tender by removing factors that ensure competition, the winner will not be the right one. Price may be low, but quality and assured continuous supply are essential. Lakvijaya is our heart, supplying about 35 percent of energy needs. If it cannot run properly at rated capacity, the economy collapses. Because of sea conditions, enough coal for the year must be imported and stockpiled by around April annually.

¶ 04 Therefore, selections must be of trustworthy firms, with quality and experience—not those that default. It emerges that the selected firm had previously won a tender to supply rice to the Government and failed to supply to standard, becoming blacklisted. Yet that firm is given the annual coal tender, ignoring audit recommendations.

¶ 05 The Auditor General’s recommendations under 7.2 state that procurement must uphold the objectives in the Guidelines and ensure the financial strength, experience, quality of supply, quantity, and ethical commitments of suppliers. This is not my view; it is the Auditor General’s. The current Government’s duty is to correct the past mistakes, not repeat them. Today the first coal shipment was below the minimum 5,900 kcal/kg. The Minister says he does not accept the Lakvijaya lab and goes to an accredited Indian lab; that too says it is non-compliant.

¶ 06 Minister Nalinda Jayatissa, as Government Spokesman, has a difficult task and limited subject knowledge; he reads notes given. He says a USD 2.1 million penalty was imposed. The Cabinet had decided to go for emergency coal procurements. Under this Government, the chosen supplier’s quality keeps dropping—the first, third, and fourth ships have lower quality—while conflicting and unreliable reports are produced. We visited Norochcholai and spoke with engineers. They told us frankly that inferior coal increases stress on machinery, risks breakdowns, and leads to higher cost power from diesel and other sources to make up deficits—an enormous burden on the country. We also examined operational data at the control room; I hear instructions were later given not to show anyone. Such concealment is unacceptable.

¶ 07 Finally, a question: Will the Minister personally pay the billions in extra costs incurred due to inferior coal purchases arising from his policy errors and flawed selection process?

¶ 08 We also need LNG. For years we fought to procure LNG. We finally concluded a competitive tender. Yet newspapers say your Ministry Secretary claims you are going to cancel the LNG tender. Why? Without LNG, will Kelanitissa and Kerawalapitiya continue on heavy fuel and diesel? Is the diesel mafia controlling you? Please clarify the status of the LNG tender.