Tender bender in coal deal

Coal spot tender prices skyrocket to USD 64.7:

By Rukshana Rizwie

Despite damning revelations arising from the three-member committee report on the controversial coal deal alleging that the tender board may have overlooked environmental impacts during the procedure, Secretary to the Ministry of Power and Renewable Energy Dr. Suren Batagoda revealed to the Sunday Observer that owing to a ruckus, spot tender prices have increased to a staggering USD 64.7.

“USD 64.77 is the lowest among four of the bids we received this week, with the highest being USD 77. We are by default paying USD 15 more than we should, which is a huge loss,” he said.

Dr Batagoda also refuted allegation that the size factor was dropped by the tender board so that the deal would be favourable to a single bidder saying that the size criterion was unclear from the inception.

“The criteria was not specifically mentioned in the bidding documents, but suppliers went ahead and submitted bids. There were glaring errors in the equation, instead of size, documents said weight. Since it was a grey area, we decided not to discriminate,” he said adding that the Lak Vijaya Power Plant did not have the facility to gauge the size which made it difficult to keep to measurements. One of the recommendations of the three-member expert panel was for Sri Lanka to study best practices regarding size. “We also examined the quality of coal and found based on empirical evidence that the 2 million s of coal supplied last year was much superior than the average quality of coal supplied during the last five years put together,” he said. He added that Cabinet would take up the matter next week.

“We have handed over the report to Cabinet along with the advice which we sought from the Attorney General’s Department. They are to take it up next week,” he said.

He also added that despite the fact that many were crying foul over this tender, he alleged that the previous supplier who supplied coal during the last five years had defaulted payments, which caused the government to incur losses amounting to billions. “When world prices increased, the bidder stopped supplying which forced us to buy 11 times from other contractors to keep the Norochcholai Power Plant running. This was revealed to Cabinet in writing but it fell on deaf ears.”