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Lengthy power cuts to return, warn CEB engineers

14 Sep 2022

  • Claim no funds available to procure coal beyond September
BY Ruwani Fonseka   Lengthy power cuts will be experienced in the near future due to the lack of funds to procure coal for the Lakvijaya Coal Power Plant in Norochcholai, the Ceylon Electricity Board Engineers’ Union (CEBEU) claimed. Speaking to The Morning yesterday (14), CEBEU Representative Isuru Kasthurirathne revealed that tenders were called for and that a private coal company was selected from the bidding process, but that the payment to obtain the consignment has not been made.  “The company selected from the bid was the Black Sand Commodities Company in Ras Al Khaimah in the UAE. The tender was for the 2022-2023, 2023-2024, and 2024-2025 seasons, and the total cost was approximately $ 1.5 billion for 45 million metric tonnes (MT) of coal. Unfortunately, the funds have not been raised, and in the current state, we only have coal to last until the end of the month. By October, we need coal to run the Lakvijaya Power Plant or the country will have to face lengthy power cuts,” he said.  Kasthurirathne further noted that the payments were to be made to Black Sand Commodities Free Zone Establishment (FZE) through the Lanka Coal Company, which is a subsidiary of the CEB.  “Tenders were called for during the second quarter of this year and Minister of Power and Energy Kanchana Wijesekera had received Cabinet approval to obtain the coal from Black Sand Commodities, but local banks are not willing to release the funds due to the credit period requested. Initially, a credit period of six months was requested, but then the credit period was extended to two years. So far, banks are unwilling to release a large amount of funds, as there is no assurance that the funds can be repaid due to the current state that the country is in,” he added.  He also stated that if the Lakvijaya Power Plant does shut down, power cuts are imminent and that while some power generation is possible temporarily through the country’s hydropower plants and wind power plants, that too would, however, come to a halt by November when the monsoon rains end and the wind speed reduces.  “Either way, coal is required to ensure continued power supply to the country. Without this, lengthy power cuts will have to be faced by the country, and we must therefore provide the country with whatever we have,” he further said.  Minister Wijesekera was unavailable for comment on the matter.  Additionally, it has been learnt that Black Sands Commodities has refused to provide letters of credit with the performance bond due to a pending legal matter with regard to an unsolicited proposal submitted by Browns Investments on 12 August, past the due date for bids, but matching the prices that had been originally approved by Cabinet for Black Sands Commodities, along with an extended credit period of five years.  “We have received information that the Attorney General’s Department has intervened and is currently advising the court to expedite the case, as it is a matter of national importance and cannot be delayed,” he added.  

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