Coal secured to avoid extended power cuts | Sunday Observer

Coal secured to avoid extended power cuts

2 October, 2022

There will be no eight-to-ten-hour power cuts due to a lack of coal, Lanka Coal Company (LCC) Chairman Jagath Perera told the Sunday Observer yesterday.

“We have secured coal for the continuity of power generation and prevention of coal–induced power outages,” Perera said.

He said that although some political elements, trade unionists, and some interested parties have floated the idea that the country would face extended power outages due to a coal crisis, it would not happen.

When asked how it could be done, given that a tender-awardee coal supplier to Sri Lanka had ceased operations, citing legal concerns and payment guarantee risks, Andrew Navamani, spokesman for the Ceylon Electricity Board said, a Dubai-based coal supplier, Black Sand, stopped supplying coal to the country due to a court case filed by Ven. Omalpe Sobhitha Thera.

The company had stopped coal supplies because it was unsure it could get approval from the Government and the funds for its coal supplies.

“As a result, we have lost valuable credit facilities that the company had provided us on a long-term basis,” he said.

Lanka Coal Chairman Perera said, “We discussed coal procurement issues with President Ranil Wickremesinghe and Central Bank officials before the President left the country.

The President resolved that matter so that there would be enough coal in the country to meet the immediate requirement of power generation.”

“The public need not fear a power crisis due to the lack of coal because we have secured necessary quantities of coal. We have taken steps to manage the funding part with the help of the Central Bank,” he said.

Two coal shipments are currently inbound, which will be enough to meet the electricity requirements until November 20, 2022.

“There is no question about receiving inbound coal shipments, except that we have to pay them in US dollars,” he said.

“But that matter was settled with the Central Bank Governor promising to release the funds to pay for coal shipments.”

He said Ceylon Electricity Board officials also took part in the meeting with the President.

When asked why some CEB engineers had warned of a possible eight to ten-hour power cuts if they did not receive coal quantities before October, Perera said they had arranged to get eight coal shipments to the country this month.

“Some of these shipments are expected to arrive within days, which will obviate any chance of extended power cuts being imposed on the public,” he said.

He said that 25 shipments of coal would be inbound to Sri Lanka provided that Sri Lanka can get the funds.

“Central Bank officials promised to release the funds for eight shipments. These shipments are due within five to six days.

Asked whether the coal shipments must be paid for in advance, Perera said, “Not necessarily. When the ships arrive, we will make the payment.”

“We have floated one tender for 300,000 metric tons by asking for a 180-day credit facility. We are going to float another tender by asking for a 180-day credit.

“The Lanka Coal Company will advertise a new International Open Competitive Tender for more coal shipments on a long-term credit basis,” he said.

“If someone participates in the tender for a long-term credit facility, we will go for it as it would be the better option. It will be more comfortable for the country to get credit facilities considering its current financial situation,” he said.

“It will be hard to get the funds, but we will manage and prevail,” he said.

The Power and Energy Ministry yesterday advertised a Spot Tender calling for International Competitive Bids to supply coal to the Norochcholai power plant for three months, from October to December.

The Ministry has advertised a spot tender for 300,000 MT of coal from local or international coal suppliers to supply the Lakvijaya Power Plant.