Allegations fly over coal procurement as Norochcholai stocks run down

With Sri Lanka threatened with 10-hour power cuts from end October unless required coal supplies are procured to power the Norochcholai plant, widespread allegations are being made about an alleged attempt by the Lanka Coal Company Private Ltd. to obtain supplies at USD 355 per MT despite a cheaper offer of UD 320 by Browns Investments PLC.

In a Stock Exchange filing on Sept. 21, Browns disclosed “our reasonable expectation to enter into negotiations with relevant authorities to secure the supply of the required volume of coal to the country based on our unsolicited proposal of Aug. 12, 2022 and the clarification made to the Exchange on Sept. 20, 2022.”

It further said that they were now made to understand that subsequent to the failure of the selected bidder to proceed with the award made, the authorities were contemplating new new spot and term tenders to secure the required coal.

“We as a consortium have not taken a conclusive decision yet to whether we will participate in such tenders to be called, since we have already submitted an unsolicited proposal on the above terms (set out in the filing)”

Copies of a letter from Lanka Coal to the Ministry of Power and Energy setting out problems including a fundamental rights petition regarding the procurement pending in the Supreme Court and time frames and required dollars and rupees for the purchases have also been published over social media.