Saturday, 23 January 2021 08:58

Lanka Coal denies price fixing

The Lanka Coal Company yesterday rejected opposition accusations that it was procuring coal outside of the tender process at higher prices and denied any irregularities in purchases for the country’s only coal power plant.

Issuing a lengthy statement the company said they were following policies set by the previous Government in 2015 when it was decided that half of the 2.25 million metric tonnes required for the Lakvijeya power plant should be purchased through a term tender while the rest procured through spot tenders.

Accordingly, the company said it had taken steps to purchase 1.2 million metric tonnes from a term tender awarded on 8 November while the remainder was to be bought via six spot tenders.

Lanka Coal said five of those spot tenders have already been awarded and four of them were given to the lowest bidder.

Only two tenders had to be rejected, the statement said. The first, after the bidder wished to change the port the coal was being shipped from, and the second, after it was found that the bidder’s price was $ 7 higher than global prices.

“The Lanka Coal Company follows internationally accepted indices when evaluating prices of tenders, and during the last few months, coal was purchased for prices as low as $ 53.94, $ 58.11 and $ 59.50. It is an accepted fact that coal prices are at their highest during December and January, resulting in annual purchases made during this time being customarily higher,” the statement said.

The company said in January 2018, coal was purchased at $ 100.35 per metric tonnes and in 2019, for $ 91.40 per metric tonne, which was higher than the $ 90.20 per metric tonne in January 2021.

“We categorically reject the statement that the payment for coal in 2021 is the highest ever. Procurement decisions are made with input from the technical evaluation committee appointed by the Finance Ministry as well as a committee of experts appointed by the Power Ministry. This ensures transparency and adherence to global prices.”

Lanka Coal also said that there was only a seven-month window from September to April every year within which the Government could procure the coal needed to run the power plant and transport it as the monsoon season prevents delivery during other times of the year.


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