Deputy Energy Minister Arkam Ilyas said that more than Rs 10 billion is currently being withheld as penalties and performance-related recoveries from suppliers linked to the substandard coal imports controversy, and that the funds could be utilised to offset losses caused to the State.

Speaking to the media yesterday (11), he said that 18 coal shipments had arrived so far, with 16 shipments supplied by the first supplier and two by the second supplier.

According to him, around US$ 22 million had already been withheld as penalties, amounting to nearly Rs. six billion. “We have already withheld that amount. In addition, there is a $ 15 million performance bond. Altogether, more than Rs. 10 billion has been withheld. These can be utilised to recover the loss,” he said.

The issue emerged amid the alleged import of substandard coal for the 900 megawatt Norochcholai Lakvijaya Power Plant earlier this year (2026). According to a report prepared by the Public Utilities Commission, the use of substandard coal led to operational disruptions, machinery shutdowns, environmental concerns and major financial losses to the State. The Government including President Anura Kumara Dissanayake has acknowledged that although the due tender process had been followed, the supplier had failed to deliver coal meeting the required quality standards.