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    Importing substandard coal: Losses would be recovered from those responsible

    October 23, 2014

    Power and Energy Minister Pavithra Wanniarachchi said in Parliament today that action would be taken to recover the losses caused to the Ceylon Electricity Board by importing substandard stock of coal for the use of the Norochcholai Coal Power Plant.

    Responding to a query raised by UNP National List MP Dr Harsha de Silva, the Minister said that the CEB had suffered a total loss of Rs 1,507,044,116.25 owing to importing sub standard coal for the use of Norochcholai Coal Power Plant in 2012. This had been found from an investigation conducted by the Criminal Investigation Department, the Minister said adding she was not holding the portfolio of Power and Energy at the time the substandard stock of coal had been imported.

    The CID was conducting further investigations, she said, adding that the government had no desire to sweep the fraud under carpets and it would protect none responsible for embezzlement of public funds.  

    The CID has commenced investigations on a recent importation of coal for the Norochcholai Power Plant. Two ships which brought in loads of coal in the month of September 2012 could not unload full consignments owing to unfavourable weather condition. “As a remedy an arrangement was made to the supplier, to sell the 85,891 M T of not0unloaded coal consignment and supply a quantity of coal with the same standard equal to that value and apart from that, an urgent tender for five shipments of coal was awarded to recover the loss occurred in the above case. Accordingly an investigation on the 149,932 MT of coal imported in the month of November 2012 by the CID.”

    She said that Taurian Iron and Steel Company (Pvt) Ltd (TISCL) was offered an Urgent Coal Supply, complying with the agreement signed between Lanka Coal Company and Ceylon Shipping Corporation Ltd on June 29, 2012.  The TISCL has performed as the importer. The importer was selected by the Ceylon Shipping Corporation Ltd. “As per a report by the CEB on 29.07.2013, a loss of Rs 852,768,000 has been occurred in generating electricity by burning these coal. In addition, it was calculated that the loss occurred due to supply of 29,896 MT less than the agreed quantity of coal at the same price and in the same quality according to the above agreement, was Rs 654,276,116.25. Accordingly, total loss was Rs 1,507,044,116.25.”

    “It was reported by CEB that although it was not simply noticed any defect of coal when going through the documents presented to the agreement signed between Lanka Coal Company and Ceylon Shipping Corporation on June 29,2012, the laboratory reports of the samples obtained at the loading port and laboratory reports of the samples at the unloading of coal, the calorific value of the relevant coal consignment calculated at the point of power generation by burning that consignment of coal was less and the calorific value in the above lab reports. The Lanka Coal Company is proceeding to recover the loss according to the advice of Attorney General,” the minister added. (Special Reporter/HC)

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