The Hon. Kumara Jayakody - Minister of Energy

¶ 01 Hon. Speaker, the answers are as follows:

¶ 02 1. No. For coal supply for 2025–2026 (procurement LCC/25/TT/1), bids were invited from registered, prequalified coal suppliers of Lanka Coal Company using the Limited Competitive Bidding method under Guideline 3.1.3. Registration of suppliers was done through International Competitive Bidding as per Guideline 3.4. There was no technical fault, risk to public funds, or impact on energy security. Therefore, I do not accept that it was a governance failure. No bidder has appealed to the Procurement Appeals Board.

¶ 03 2. Yes, the tender period was reduced to 21 days with the consent of the National Procurement Commission (NPC) and subsequent approval of the Standing High Level Procurement Committee. The NPC consent letter and SHLPC approval are annexed (Annex 01). Upon bidders’ requests, the period was further extended by seven days; a total of 28 days was given.

¶ 04 For clarity, from 2023 up to this tender there was no valid tender called; supplies were made through a highly irregular, corrupt process by the previous Government—via a Cabinet approval to a single supplier with no qualifications, to supply via Russia in an unlawful manner. This House should recall it. The main proponent of this topic is not here today. A company with regime and family links was previously allowed to supply without any tender, using a counter-offer after seeing tender prices elsewhere and getting Cabinet Papers approved. They had supplied nowhere else and lacked basic qualifications; they used another company’s qualifications to obtain Cabinet approval.

¶ 05 3. The last tender prior to this (LCC/24/TT/1) had the same technical qualifications as now; nothing was amended. The same applies to financial criteria—key among them are technical suitability and calorific value.

¶ 06 Minimum experience considered: within the last 36 months, supply of at least 100,000 metric tons with GCV ≥ 5,900 kcal/kg, and cumulative supply of 500,000 metric tons. I emphasize to the Hon. Opposition Leader: the contracts consider Gross Calorific Value (GCV), not NCV. GCV is tested and considered.

¶ 07 Additionally, the financial criterion requires a minimum turnover of USD 150 million in the last three years. No conditions were changed, relaxed, or removed. Documents can be tabled.

¶ 08 4. Ten bids were received. The bid evaluation report is submitted as Annex 03. This was the most competitive coal procurement in our history by number of bidders.

¶ 09 5. Yes. As per registration—only suppliers qualified to supply to Norochcholai are registered—this supplier has the required experience, supported by documents at registration. The company does not generate electricity in Sri Lanka; it is contracted only to supply 1.5 million metric tons up to April 2026.

¶ 10 6. The requirement is not NCV 5,900. Typically, among other specifications, the GCV is in the range of 5,900–6,150 kcal/kg or higher; if the specification is not met, penalties are levied. As per the contract, the Load Port Report confirms conformity at loading. At discharge, the first shipment’s GCV was 5520 kcal/kg per the independent Discharge Port Report. Under Clause 5.6, double penalties apply—about USD 2 million will be levied. The cargo was brought by “M.V. Ceylon Breeze” of Ceylon Shipping Corporation; penalties of USD 2,079,749.93 will be recovered, and a 10% performance bond on 1.5 million tons is also held.

¶ 11 The second shipment’s GCV was 6017 kcal/kg—within specifications. The third shipment has arrived and is being unloaded.

¶ 12 Coal was charged to boilers based on conforming Load Port Reports; cargoes with rejected values are not accepted under the contract.

¶ 13 7. There is no accredited coal-testing laboratory in Sri Lanka. I have initiated steps with the SLSI to establish one this year. Meanwhile, samples were sent to Intertek Inspection India on 06.01.2026 and 13.01.2026. Reports were received on 19.01.2026 and are tabled as Annex 04. Delays in reporting attract penalties and demerit points under the service contract. Previously, services were also procured from other Indian labs.

¶ 14 In 2020–2022, South African supplies showed variations and penalties were imposed accordingly. The contract contains standard formulas for penalties on GCV shortfalls or freight increases. There will be no financial loss to the country or the utility.

¶ 15 8. No. It is incorrect to label the coal as “inferior” when it conformed at Load Port. Of nine quality parameters, only three were at rejectable levels in the first shipment; the second shipment met all parameters. Electricity generation with these consignments will not cause economic loss.

¶ 16 9. No. A year-long forecast cannot be made from a single cargo. There is no significant risk of boiler damage or reduction in plant life. There is no risk of early stock depletion. As of now, we have coal until end-February, and with units restored, there is no risk at least until June. We currently hold about 450,000 MT in Norochcholai stockpiles, with a further 1,380,000 MT due. Any deviations in the first cargo are being addressed strictly under contract. These are standard in international procurements.