{"id":87566,"date":"2026-03-29T18:00:33","date_gmt":"2026-03-29T22:00:33","guid":{"rendered":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=87566"},"modified":"2026-03-29T21:27:53","modified_gmt":"2026-03-30T01:27:53","slug":"87566","status":"publish","type":"post","link":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=87566","title":{"rendered":"Coal for Norachcholay Plant From Indian Supplier Trident Chemiphar: Questions Raised in power and energy circles about whose interests the government is protecting?"},"content":{"rendered":"

By Namini Wijedasa<\/strong> <\/p>\n

A third coal shipment from South Africa\u2014bought via the Indian supplier Trident Chemphar\u2014has failed quality testing by the independent accredited laboratory Cotecna, officials said this week.<\/p>\n

Trident has now been charged penalties totalling US$8.1mn for three shipments out of the 12 that have been unloaded at Norochcholai, officials from Lanka Coal Company (Pvt) Ltd (LCC) said. Its contract, however, has not been terminated\u2014neither for selling off-specification coal nor for consistently delaying supplies.<\/p>\n

Four shipments short?<\/strong><\/p>\n

LCC ordered 25 shipments of coal (1.5mn metric tonnes) from Trident for the 2025-2026 season. Delivery was scheduled to have been completed by April 23 this year. However, Trident is only now unloading its 13th shipment, when it should have been the 19th.<\/p>\n

Meanwhile, none of Trident\u2019s coal shipments has enabled the Lakvijaya coal power plant (LVP) to reach its optimal 900MW capacity. Of the 810MW usually channelled to the grid (the rest is used to power auxiliaries such as pumps and fans), generation routinely falls 135MW to 185MW short.<\/p>\n

LVP\u2019s internal laboratory continues to record gross calorific values below and ash content well above required specifications. A site visit by the regulator Public Utilities Commission of Sri Lanka (PUCSL) also evidenced that the plant underperformed when fed with Trident coal.<\/p>\n

<\/p>\n

<\/p>\n

However, Lanka Coal did not terminate the Trident contract, saying tests carried out by Cotecna\u2014the lab hired by LCC and LVP\u2014on coal samples collected at Norochcholai contradicted a majority of the LVP unaccredited laboratory\u2019s findings. But Cotecna did find three shipments to be off-specification. These are the first, ninth and twelfth consignments.<\/p>\n

Although LCC did not end the contract, it then floated \u201can emergency tender\u201d for 300,000MT of coal for the same season. It was a tacit admission that Trident\u2019s supplies were unacceptable and needed replacement with \u201cbetter\u201d coal.
\nInterestingly, Trident also bid for the emergency tender, quoting the lowest.<\/p>\n

But the company sent a letter on the same day, citing a miscalculation and raising its price. This makes Trident liable to lose its performance bond as the terms of the tender say\u2014among other applicable grounds\u2014that a bid security may be forfeited if a bidder \u201cwithdraws its Bid during the period of Bid Validity specified in Clause 1.10.8\u201d.<\/p>\n

Trident was \u201cdisqualified\u201d from the bid and another Indian company, Taranjot, won the emergency tender. Taranjot\u2019s five shipments are due from April 20 to May 10 this year.<\/p>\n

By then, Trident would have supplied around 18 of its contracted 25 shipments. At this rate, it is calculated that there could be a shortage of three to four shipments for the ongoing season.<\/p>\n

\u201cFour shipments amount to 225,000MT,\u201d an official source said. \u201cThat is a month\u2019s requirement of coal for LVP, short.\u201d Official sources said, however, that LCC is trying to push unloading beyond early May\u2014after which monsoons usually make it difficult and dangerous\u2014to early June.<\/p>\n

This belies a sense of desperation amidst a global fuel crunch that has made diesel expensive and scarce, and furnace oil hard to come by. Both are alternatives to coal that are used to fire power plants during times of high demand. With insufficient coal, and not enough electricity produced from the coal that\u2019s available, costs will skyrocket.<\/p>\n

Whose interests come first?<\/strong><\/p>\n

This week, comments by Transport Minister Bimal Ratnayake about the controversial procurement provided insight into why it was not cancelled, despite glaring violations. He maintained that the coal tender was carried out properly. He admitted that laboratory tests have proved that the generation of electricity from the coal was low. For this, the company has paid\u2014he said\u2014a massive fine of about US$ 2mn, or Rs. 600mn rupees.<\/p>\n

But, Minister Ratnayake hastened, there is \u201canother side to this.\u201d \u201cEven if we assume this is bad coal, do we have bargaining power? If the bread from one shop isn\u2019t good, we can return it and buy from another shop. Now, let\u2019s say this is the worst of the worst coal. What alternative do we have?\u201d<\/p>\n

\u201cYou can\u2019t just get coal from this or that shop,\u201d he continued. \u201cYou have to order it months in advance. It has to be brought and stored. So, what is the real problem? One is that the electricity generated from this coal is low. That\u2019s not the government\u2019s fault. It\u2019s a natural occurrence that happened during importation, it\u2019s the company\u2019s fault, and they paid the fine.\u201d<\/p>\n

\u201cThe problem is that, because of these unlimited fines, if by chance the company says, \u2018I\u2019m bankrupt, there is nothing I can do\u2019, we might be able to sue them and recover the fine later, but where do we get coal from then?\u201d he then said. \u201cWe will have no coal.\u201d<\/p>\n

This has raised concerns in power and energy circles about whose interests the government is protecting.<\/p>\n

Clear basis for termination<\/strong><\/p>\n

To begin with, the contract has clear bases for termination. Section 3.11 states that: \u201cIn the event any two different shipments of coal quality parameters are reported outside the absolute minimum\/maximum tolerance limit after testing of coal samples at Load Port and Jetty of the Plant\u2026then LCC may terminate the contract agreement.\u201d<\/p>\n

\u201cFurther, LCC reserve the right to terminate the contract, if there are any significant deviations of quality parameters reported frequently between Jetty of the Plant and Load port Test reports and after verified [sic] by testing of the relevant Reference Samples.\u201d<\/p>\n

Another clause says: \u201cIn the event that the delays occurred in more than two (2) occasions (shipments) exceeding seven (07) days, the Buyer reserves the right to terminate the Agreement, considering it as Seller\u2019s Default under provisions of the Clause 3.11.\u201d<\/p>\n

Finally, 3.10.1 related to \u201cSeller Event of Default\u201d provides grounds for termination if either the quality of 25 percent or more of the coal delivered or tendered for delivery over a three-month period or, coal delivered or tendered for delivery by two consecutive shipments, is within the LCC reject values for coal set fort in Clause 5.2 of the schedules.<\/p>\n

Trident received LCC registration, along with several others, on August 13, 2025, just five days before the 1.5mn MT 2025-2026 tender was published. The company quoted the lowest price, US$98.50 per MT. It won the bid.
\nNow it transpires that Trident will provide at least 18 shipments of off-<\/p>\n

specification cargo at a low price, but that the government has also been forced to buy five additional shipments of better-quality coal through an emergency tender at US$ 142 per MT. The loss is considerable. And so far, the only losers have been the national coffers, the rate-paying public, and LVP.<\/p>\n

The fact that Trident continues to provide coal despite a US$ 8.1mn penalty indicates that its margins are likely worth this gentle \u201cslap on the wrist\u201d.<\/p>\n

Courtesy:Sunday Times<\/em><\/p>\n

Tweet<\/a><\/div>","protected":false},"excerpt":{"rendered":"

By Namini Wijedasa A third coal shipment from South Africa\u2014bought via the Indian supplier Trident Chemphar\u2014has failed quality testing by the independent accredited laboratory Cotecna, officials said this week. Trident has now been charged penalties totalling US$8.1mn for three shipments out of the 12 that have been unloaded at Norochcholai, officials from Lanka Coal Company …<\/p>\n

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