• Unregistered suppliers allowed into bids
• Revoked lab certified all 12 shipments
• 40-day procumbent apse triggers emergency buy
• Rs. 2.3 b recoverable from supplier  

The National Audit Office has exposed a series of deep-seated irregularities in the coal procurement process for the Lakvijaya Power Plant, highlighting a breakdown in basic oversight and quality control.

These findings are recorded in a Special Audit Report on the coal purchase process for the 2025/2026 season, released on 2 April 2026. The probe was launched following a request by the Parliamentary Committee on Public Enterprises (COPE) after concerns were raised about the quality of coal at the Norochcholai plant.

The audit revealed that the supplier, Trident Chemphar Limited, had not actually completed its registration when bids were called. Although tender rules explicitly restricted the process to fully registered suppliers, three unregistered entities were allowed to participate.

Further concerns involve the quality assurance process. While coal is meant to be tested at both ends of its journey, the audit found that the Indonesian laboratory used at the loading port, PT Mitra SK Analisa Testama Samarinda, had its licence revoked on 29 December 2025. There was no evidence the licence was renewed by the end of March 2026, yet twelve shipments were certified through this arrangement. Discrepancies were also found between the laboratory reports and the actual performance data at the plant, but the Lanka Coal Company failed to use its available systems to verify these inconsistencies.

Procurement planning was also found to be lacking. No shipments were secured during a vital 40-day window between 13 November and 30 December 2025, a period when imports should be maximised. This led to an emergency purchase in March 2026 from Taranjot Resources (Private) Limited, a supplier that had previously failed to meet quality standards within the last three years.

These lapses have led to significant financial consequences. A key finding is the Rs. 2,237.7 million loss incurred due to the overconsumption of substandard coal supplied by Trident Chemphar Limited during the 2025/2026 season. The coal, which fell below the required Gross Calorific Value of 6,150 kcal/kg, recorded levels as low as 5,520 kcal/kg, forcing the Lakvijaya Power Plant to burn significantly higher quantities to generate electricity.

The losses were recorded across nine shipments between December 2025 and February 2026, including Rs. 163.5 million from Shipment 456, Rs. 310.7 million from Shipment 458, and the highest losses of Rs. 396.6 million and Rs. 392.5 million from Shipments 464 and 463 respectively.

Beyond the direct financial losses, the substandard coal also reduced the plant’s generation capacity from its optimal 300 MW to around 270 MW or lower. This shortfall required additional electricity generation from alternative sources, amounting to an estimated 114.5 million kWh under continuous operation, further straining the national grid and increasing costs.

Crucially, the audit notes that a sum of Rs. 2,332.5 million is recoverable from the supplier as penalties for failing to meet agreed quality standards. These penalties relate to deviations in key parameters including Gross Calorific Value, sulphur content, ash levels and grain size. For instance, penalties of Rs. 644.7 million and Rs. 678.5 million were attributed to Shipments 456 and 464, respectively. Addressing Parliament on 7 April 2026, President Anura Kumara Dissanayake noted that coal issues are a primary driver of the current energy crisis, with total losses potentially reaching Rs. 7 billion. He confirmed that the government has started withholding payments to suppliers to recover these funds. The President stated the financial burden would not be passed to consumers, and that costs for alternative power generation would be recovered from the responsible companies, with legal action pending for those who do not pay.