Sri Lanka to call fresh tenders for coal: Minister

ECONOMYNEXT – Sri Lanka will call fresh tenders for to buy coal for electricity generation, as the first awardee had refused to proceed following a controversy, Power and Energy Minister Kanchana Wijesekera said.

“The company that was awarded the tender is not willing to implement it,” Minister Wijesekera said. “Now we have to go to a new tender. The opinion that was created in society, the proposals, the accusations, the company had declined to proceed.”

Cabinet approval will be sought next Thursday to call fresh tenders, he said.

Sri Lanka was hoping to get coal to generate electricity by October 2022 but now the purchase will be advertised again.

All companies who are willing to supply can then respond, he said.

Sri Lanka had originally awarded the tender to a company called Black Sands Commodities FZ LLC based in the UAE which was to supply 4.5 million tonnes of coal from Vanino Port, Russia.

It was supposed to supply coal at a base rate of 295.22 US dollars and 33 dollars a tonne for freight.

The deal was supposed to be for seasons 2022-2023, 2023-2024 and 2024-2025.

The firm had agreed to give six months credit. Minister Wijesekera defended the deal in parliament saying the supplier was the lowest responsive tender.

“On July 21 we called for the tenders,” he told parliament on August 08. “And on Aug 10 we closed it. Two companies responded to the tender. One company said they will give one ton for 328 US dollars.”

Another consortium called CMEC-Browns had offered coal at 554 dollars per tonne. The firm had asked payment 50 percent in US dollars and 50 percent in rupees or yuan. There was another proposal for 526 dollar a tonne.

After the tender closed the party had sent another proposal offering coal at 285-290 US dollars, he said.

Sri Lanka’s power regulator and Ceylon Electricity Board engineers had warned of extended power cuts if coal supplies do not come. (Colombo/Sep20/2022)

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