News

Coal supply: Two bids for 4.5 m MT coal tender

By Maheesha Mudugamuwa

The Lanka Coal Company (LCC) has received only two bids for the supply of approximately 4.5 million MT of coal to the Lakvijaya Coal Power Plant (LVPP) in Norochcholai for three years on a long-term credit basis, The Sunday Morning learns.

It is learnt that the bids that have been submitted are for a six-month credit period as requested by the LCC and they are currently being evaluated by the Technical Evaluation Committee (TEC) and the Special Standing Cabinet Appointed Procurement Committee (SSCAPC).

On 12 July, the SSCAPC Chairman of the Ministry of Power and Energy, on behalf of the LCC, invited sealed bids to supply coal for the 900 MW LVPP from eligible coal suppliers registered with the LCC.

Seven companies – namely, Swiss Singapore Overseas Enterprises (Pte) Ltd., Suek AG, Adani Global (Pte) Ltd., HMS Bergbau AG, Mercuria Energy Trading (Pte) Ltd., Knowledge International Strategy Systems (Pte) Ltd., and Yongtai Energy (Pte) Ltd. – have been pre-qualified to bid for the coal tender.

The selected company is required to supply 4.5 million ±10% MT of coal during the agreement period on Cost and Freight (CFR)/Free on Board (FOB) Trimmed basis.

When contacted by The Sunday Morning, LCC Chairman Jagath Perera said: “We closed tenders on 10 August and tenders are being evaluated by the TEC and SSCAPC.”

He also said that they had received two bids which were currently being evaluated: “We received two bids, which are being evaluated. We have requested a six-month credit period this time, which means 150 days of credit. We have received credit, but until the evaluations are completed we have no idea of the terms and conditions.”

Cabinet Paper No/2022/PE on coal procurement submitted by Power and Energy Minister Kanchana Wijesekera earlier this month stated that the total coal requirement of LVPP for the 2022-’23 season was 2.42 million MT. 

Half of the requirement – around 1,140,000 MT – has already been secured from the last term tender and another 120,000 MT (two shipments) have been secured from the Spot 5 tender. The remaining quantities need to be procured through a suitable procurement method.