Committee raises concerns over coal quality and unpaid penalties

Serious concerns have been raised over the quality and delayed delivery of coal supplied to the Lakvijaya Power Plant, with a parliamentary oversight committee questioning officials over quality standards, emergency shipments and outstanding penalties.

The matter was discussed at a meeting of the Sectoral Oversight Committee on Infrastructure and Strategic Development, chaired by S. M. Marikkar.

Officials informed the committee that all 19 coal shipments arrived late. They also confirmed that, contrary to previous arguments, the 19 shipments failed to meet the required 5,900-calorie standard based on the relevant inspection findings.

The Chairman also questioned the status of third-party “umpire” inspections conducted when suppliers challenged the initial quality reports. Officials confirmed that reports for the first and second shipments had been received, with recorded values including 5,426 and 5,607 calories.

Regarding emergency shipments, officials clarified that four of the five shipments originally tendered were received, while the final shipment was rejected. However, reports from the Lakvijaya Power Plant indicated that all four emergency shipments received met the 5,900-calorie standard.

The committee also questioned the failure to recover penalties for the delayed shipments. Officials stated that approximately US$496,390.14 in penalties or demurrage is due, but no payments have been received from suppliers to date.

At the same time, the government is reportedly withholding approximately US$3.4 million in payments in connection with the issues surrounding the coal supplies.

Chairman Marikkar directed officials to submit a comprehensive report to the committee within one week. The report must clearly explain the criteria used to calculate penalties for each shipment, including the applicable quality standards and the number of days each shipment was delayed.

The committee also requested that all 19 quality inspection reports, including third-party audit reports, be attached to the submission for further review.