• Rs. 2 bn left to be paid, funds awaited from CEB
• Late charge, demurrage likely to be added if not settled today  

With only a partial payment of Rs. 1.2 billion of the 70% payment due amounting to Rs. 3.2 billion having been settled by the Ceylon Electricity Board (CEB) for the 12th coal shipment which has reached Sri Lankan maritime waters, the Lanka Coal Company (LCC) has requested the relevant supplier as to whether the unloading process could commence without the full payment. 

When contacted by The Daily Morning yesterday (7), CEB Chairman N.S. Ilangakoon stated: “We have paid a part of the payment for the 12th vessel. Of the 70% or Rs. 3.2 billion due that we have to settle, we have paid about Rs. 1.2 billion.” The CEB is yet to settle an additional payment of Rs. 2 billion for the 12th coal shipment.

Meanwhile, Lanka Coal Company Chairman Shehan Sumanasekara, when contacted by The Daily Morning yesterday, noted that although the full payment of 70% had to be settled in order to commence the unloading process, the LCC had asked the supplier whether it is a possibility to commence unloading with a partial payment. 

“A total of 70% needs to be paid to commence the unloading process as those are the terms of the agreement between the supplier and the LCC. We have requested them to allow us to start unloading with the partial payment. Based on their response, unloading might happen or not. We still don’t know as it’s up to the supplier. The worst case scenario, if they do not agree, we hope that we can pay the balance tomorrow (8) and start unloading.”

Responding to a query, Sumanasekara stated that should the balance payment not be settled by today (8), a late payment fee and a demurrage may have to be paid.

“The CEB has said that they are trying their best to settle the balance tomorrow (8). Failing which, it will have to be on Thursday (9). Thursday is definitely late, because we might go into late payment fees, demurrages, etc. This might happen, but if we can pay it tomorrow, we might be able to salvage the situation.”

Speaking to The Daily Morning on Monday (6), Ilangakoon noted that a bank loan was one avenue that is being explored in order to secure the necessary funds required for this week’s coal shipments. “We are looking for a loan and have discussed the same with the Presidential Secretariat, the Treasury, and the Ministry of Power and Energy. We need funds for the coal shipments and we need a loan but due to the lack of cash inflows due to the delay in the electricity tariff increase, none of the banks have agreed to provide us with that. We have written to the Treasury and the Presidential Secretariat on a daily basis.”

This follows requests from the Lanka Coal Company for urgent funds for the procurement of coal for this week.

When inquired as to an alternative course of action if such a bank loan is not forthcoming, Ilangakoon stated that one other option was obtaining the necessary funds though consumer bill payments.

Speaking to The Daily Morning on Monday, Sumanasekara said that funds are required urgently in order to avoid a delay in the entire process of unloading as well as late payment fees and demurrages. “This is a complex process because we had different payment mechanisms and different terms agreed upon with the suppliers. There were two payments that were supposed to go on 2 and 3 February. One unloading vessel payment we were supposed to do today. We normally pay these one day before the vessel arrives so that there are no last minute issues. Hence, we requested the payment last week but couldn’t get it; so now, the vessel will be arriving. We still have a period of 12 hours before it gets into demurrages or late payment fees. I believe that from the conversations we had with the CEB, they are trying their best to make the payment on Tuesday (7). If that happens, we might not have a huge problem considering the time frame; but, if by chance the payment cannot be done tomorrow, we might get into late payment fees, etc., on the vessel which is scheduled to arrive.” 

Speaking at a media briefing held on 4 February, Sumanasekara raised concerns about the continuation of operations at the Lakvijaya Power Plant in Norochcholai if the required funds for coal purchases are not obtained. He stated that Rs. 15.3 billion is required immediately for the procurement of coal for this week, proposing that the Central Bank provide the required amount in United States dollars.