• LCC awaits Load Port Certificate, acknowledges allegations made regarding coal stock in question
• Low calorific value in SA coal

The Lanka Coal Company (LCC) is awaiting the Discharge Port Certificate before making payment for the first 60,000 MT coal shipment from a new supplier that imports coal from South Africa, following allegations that the shipment is of low quality.

The Indian supplier is contracted to deliver a total of 25 consignments, following a tender that was finalised at the end of last year after months of delays, as reliably learnt by The Sunday Morning.

It is learnt that the Load Port Certificate for the shipment has indicated a low calorific value, raising concerns over electricity generation efficiency and potential financial losses.

A source within the Ceylon Electricity Board (CEB) alleged that around 117 MT of newly supplied coal is expected to generate only around 285 MW of electricity, compared with previous Russian coal stocks of 107–109 MT, which produced approximately 300 MW.

This discrepancy, the source claims, highlights a drop in operational efficiency, as a larger quantity of coal is required to generate the same amount of power.

While the cost comparison between the previous and current suppliers shows no major difference, sources noted that the South African coal costs only $ 1.50 per tonne less than that of the Russian supplier.

Sources allege that the lower quality of the coal could constitute a failure on the part of the supplier, potentially resulting in financial consequences for the country.

This shipment forms part of a series of 25 consignments scheduled to be supplied from South Africa. Sources expressed concern that if similar quality issues continue in future deliveries, it could have far-reaching effects on Sri Lanka’s electricity production and pricing.

Sources also emphasised that coal quality, particularly calorific value, is a critical factor in power generation efficiency. A lower-than-expected calorific value reduces electricity output and increases the volume of coal required, placing additional strain on both operational and financial resources.

Towards the end of 2025, the LCC finalised its long-term coal procurement for the upcoming season, with bonds deposited by the Indian supplier Trident Chemphar Ltd. 

The Standing High-Level Procurement Committee (SHLPC), acting on behalf of the LCC, invited sealed bids from registered suppliers for the supply of 1.5 million ±10% MT of coal for the period spanning December 2025 to April 2026. Bids were submitted by 10 a.m. on 8 September 2025 and opened later the same day at the LCC office in Kohuwala, Dehiwala.

Despite these arrangements, sources indicated that by November 2025, remaining coal stocks were projected to last only until January 2026, even with 15 pending shipments from the previous long-term contract. 

Following months of inactivity, Cabinet approval to appoint a tender committee was only granted in October 2025. Since then, the LCC has resumed its procurement process, with a new tender for approximately 2.25 million MT of coal expected to cover two unloading seasons.

However, the tender process has come under scrutiny amid allegations of corruption. In September 2025, the Frontline Socialist Party (FSP) claimed that Sri Lanka’s latest coal import tender was marred by irregularities. The FSP alleged that procurement rules had been altered to favour Trident Chemphar, including a 90% reduction in the minimum coal reserve requirement.

The FSP also cited past allegations against the company and its owners, including procurement violations, money laundering, and match-fixing. It argued that Government authorities had manipulated regulations governing essential services to benefit private interests, undermining public welfare. 

Furthermore, the FSP described the coal tender controversy as part of a broader network of corruption involving politicians, Government officials, and business entities.

When contacted, LCC General Manager Namal Hewage acknowledged that allegations had been raised regarding the coal stock in question, but said the company could only verify the situation after receiving the Discharge Port Certificate.

He confirmed that payment for the shipment had not been settled yet. “If there are any quality failures, the agreement contains appropriate conditions, and the supplier will have to pay the relevant penalty. However, as of yet, we have not received any proof of any such quality failure,” he stressed.

When asked whether the specifications mentioned in the Load Port Certificate indicated any issues, Hewage denied such concerns, stating that no problems had been identified at this stage.

Ministry of Energy Secretary and CEB Chairman Prof. Udayanga Hemapala also told The Sunday Morning that the LCC would take necessary action based on the agreement with the supplier.

The Norochcholai Coal Power Plant generates nearly 40% of Sri Lanka’s electricity.