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Coal stocks: Concerns over procurement process?

24 Jul 2022

  • Stocks to run out by 20 Sep.
  • SL needs $ 650 m to buy coal
  • Tenders to close on 10 Aug.
By Maheesha Mudugamuwa The Public Utilities Commission of Sri Lanka (PUCSL) has raised concerns over the steps taken by Lanka Coal Company (LCC) to seek coal supplies on a long-term credit basis for the country’s only coal power plant in Norochcholai. The utilities regulator claimed that it was uncertain whether any supplier would come forward to help the country on long-term credit, given the current economic situation in Sri Lanka. Speaking to The Sunday Morning, PUCSL Chairman Janaka Ratnayake said it was very important to find a coal supplier and the required funds as soon as possible to bring down coal as the country’s electricity generation was completely dependent on 900 MW of ‘firm power’ produced by the coal power plant. “Unless we obtain the required coal stocks, the country will plunge into a severe power crisis, where it will have to impose at least 15-hour-long power cuts per day at the end of this year,” Ratnayake stressed. Commenting on the steps taken by LCC, Ratnayake said it was doubtful whether any supplier would come forward to supply coal to Sri Lanka on a long-term basis in such a crisis situation. According to the PUCSL Chairman, Sri Lanka needs to source at least around $ 650 million to purchase sufficient stocks for the next season. When The Sunday Morning contacted LCC Chairman Jagath Perera, he said the existing coal stocks in the country would be sufficient until 20 September and that it had already secured 50% of the coal requirement of the next season via the tenders which were awarded last season. According to Perera, LCC has 50% of awarded tenders in hand. “We have awarded tenders for coal supply and 50% of that was supplied last season; the balance 50% will be supplied for this season,” Perera said, adding that the normal annual requirement of coal was 2.25 million MT and this time it had been calculated as 2.4 million MT. Meanwhile, Ceylon Electricity Board (CEB) Chairman N.S. Ilangakoon said the tender for the supply of coal had been opened and would close on 10 August.    


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