Coal crisis looms over multibillion tender row

A multibillion rupee tender to procure coal for the Lakvijaya power plant in Norochcholai has run into controversy for a third time, raising fears of a delay in replenishing stocks.

The Ceylon Electricity Board (CEB) has coal only till mid- September, authoritative sources said. Based on a recommendation by the Ministry of Power and Energy, the Lanka Coal Company (LCC) called for tenders in April 2015 to procure a record 6,750,000 tons of coal on a three-year contract. It is one of the biggest tenders in recent times, running into at least Rs. 50 billion.

Till now, only one-year contracts were awarded for far lower quantities of coal. It was on a Cabinet decision that this was amended to a three-year contract. The LCC is a Government-owned company, set up to procure and supply coal for coal fired thermal plants.

Seven bidders were shortlisted by a Technical Evaluation Committee (TEC) which was appointed by the Standing Cabinet Appointed Procurement Committee (SCAPC). One was disqualified. Of the remaining six, Noble Resources International Pte Ltd, a Hong Kong-based company listed in Singapore, was identified as meeting tender requirements at the lowest price.

Despite this, the SCAPC awarded the contract to M/s Swiss Singapore Overseas Enterprises Pte Ltd. Now, four of the shortlisted bidders have gone to the Procurement Appeal Board (PAB) against the selection. They are Noble, Suek AG, Adani Global Pte Ltd and Liberty Commodities Ltd. The PAB, based at the Presidential Secretariat, is yet to arrive at a decision even two weeks after the appeal period ended.