Sam I @samiddasl - Twitter Profile

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3 months ago

Here is a closer look at #SriLanka #coal procurement for the #CEB's Lakvijaya Power Plant: tender delays, emergency procedures, supplier selection, and disputed coal quality. This thread breaks down the timeline, decisions, and unanswered questions involving the Ceylon Electricity Board. Operational Context •The Lakvijaya Power Plant operates 3 × 300 MW units (total 900 MW installed capacity). •Coal procurement typically supports annual seasonal shipping (approx. Sept–April). •Annual requirement estimated at ~35–38 shipments •Coal quality thresholds defined by calorific value and ash content (Main factors out of 7 or 8) •Coal procurement handled through tenders under the #CEB. Tender Planning Period (Expected vs Actual) Expected timeline (standard practice) •Tender preparation: April •Tender closing: July •Supply begins: September Actual timeline stated •Tender expected April 2025 •Reminders raised in Parliament in June, July, August 🔴No actions were taken despite so many reminders inside parliament and outside of it. (Man made) Emergency Procurement Phase August — Emergency tender called •Classified as emergency procurement despite had been waiting for months delaying this process. •Bid submission period reduced from typical ~42 days to ~21 days 🔴This caused elimination of reputed large scale suppliers who could supply high quality coal. Tender Conditions and Eligibility Changes During procurement: 🔴Supplier experience requirement reduced (1 million tons → 100,000 tons). 🔴 Significant eligibility change; requires comparison with official tender documents. Minister Intervention 🔴Minister allegedly met a bidding company during evaluation period. •Big NO, NO considering this is one of the biggest government procurement deal Evaluation and approval stage •Technical review expected within 1–2 weeks as this was supposed to be an emergency requirement. 🔴However, Cabinet approval reportedly granted after ~7 weeks. 🔴This contrasts with “emergency” framing and has serious concern whether government wanted to have a “desired” supplier by allowing them to get registered and have the bond ready. Tender Award Phase Mid-November •Tender awarded to a company. Reported concerns about selected supplier: 🔴Prior blacklisting in another import case in year 2016. 🔴Alleged financial misconduct history of the owners. Earlier supply phases Context •Some shipments historically accepted with penalties when quality was marginally down •Such cases were rare in the past. Delivery schedule planned •December: 3 ships •January–March: 6 ships each month •April: 4 ships •Total planned: 25 ships 🔴 Lower than earlier stated annual requirement of 35–38 ships. Early Warning Stage (First Shipments of Current Contract) After first coal shipment used •Power plant officials reported low generation performance to ministry. •Performance concerns linked to coal quality 🔴 No actions were taken by Ministry but minister was in a hurry to defend the company in the Parliament After second shipment •A second report submitted stating quality did not meet standards 🔴Still No actions were taken by Ministry Interpretation noted in report 🔴Tender could have been potentially cancelled based on these findings after first two shipments. No such actions on warnings issued Supply Phase (Continuation) Actual delivery performance •December deliveries incomplete only 01 arrived on time. Second one was delayed. •Second shipment allegedly delayed beyond contractual interval. 🔴Contract could have been cancelled due to not meeting tender conditions at this time. Not done. Quality Dispute Testing and certification dispute 🔴Supplier relied on Indonesian lab testing instead of SGS port certification at the dispatching port ( which was easy to take than taking from elsewhere). 🔴Local testing reportedly found all 9 shipments below acceptable thresholds. Operational performance observation 🔴Plant performance analysis suggested low calorific value coal < 5900 level. Determined through basic reverse engineering mechanism. This matches with the local lab test results perfectly. 🔴All 9 shipments are below standard as per the calculations so far. 💲 Loss from 1st shipment: Rs. 595.1 million 💲 Loss from 2nd shipment: Rs. 288.5 million 💲 Loss from 3rd shipment: Rs. 1,047.4 million 💲 Loss from 4th shipment: Rs. 865.0 million 💲 Loss from 5th shipment: Rs. 1,144.2 million 💲 Loss from 6th shipment: Rs. 1,197.7 million 💲 Loss from 7th shipment: Rs. 974.9 million 💲 Loss from 8th shipment: Rs. 1,559.3 million #NPP #Corruption

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