Single largest coal procurement delayed and mishandled due to idiocracy

Friday, 23 January 2026 00:04 - - {{hitsCtrl.values.hits}}

By Analyst

The recent debate and controversy over the single largest coal procurement needs to be unravelled.

“Trident,” the selected coal supplier to Lanka Coal won the bid at CIF price of $ 98.50, represented by Rakitha Rajapaksa. The next lowest bid is by “Potencia (SUEK)” at CIF $ 100.00, with ties to Namal Rajapaksa (handled by Yo).

JVP/NPP wanted to break away from previous coal suppliers and position themselves with a fresh outlook—which is great! But to do that, they altered standard procurement processes and proven tender guidelines. Idiots.

These tender processes and guidelines have years of evolution in them and have been developed through fire. Yes, in 2022 and 2023 there were procurements outside these tender processes because Lanka Coal/SL was not able to produce Letters of Credit (LCs) due to default and Aragalaya. The same goes for all other procurements/tenders and paying government salaries.

A tender that should have closed in June or July was pushed to September. The guided 42 days+ (normally 45 days or 60 days) tender bid submission preparation time was limited to 21 days. Yes, you need time to produce all documents required for the bid submission. Some of these requirements that take time are: multi-million USD bid bonds, even larger performance bonds, PCA3 from e-ROC, Power of Attorney through the SL Mission/Embassy, and many more. Note that any Bond has to be underwritten by a Sri Lankan bank.

Tender bid qualification criteria were lowered to allow more companies to be eligible to bid, one of which is Trident. Some of the tender qualifying criteria that were lowered are required past performance, dollar-figure company turnovers, and MT coal turnovers.

SUEK Russia! Russia can back their prices and supply, and it is nearly impossible for anyone else to perform at low cost when the tender dictates a low-cost option. Anyone with even a slight bit of knowledge should have tailored the tender in a way that a proven supplier like “Aditya Birla” (Swiss/Singapore) wins. Aditya bid at CIF $ 105.00.

Now the problem is that Trident can barely supply at the bid price of $ 98.50. Prices are tight, with no leeway for contingencies or unforeseeable events. Trident has missed a few Lanka Coal scheduled laycans, and we are behind schedule now. December was scheduled for 3 shipments, and January had 6 shipments. There are likely penalties that Trident would have to pay for deviations in accordance with tender and contractual obligations. These penalties are costly, and the AG is no longer preferred by this Government. Does Trident have the capacity to pay the penalties and continue with shipments? Will there be a shortage of coal? These are all good questions and call for a Plan B.

The single largest procurement for the country—1.5 million MT × $ 98.50, nearly $ 150 million—has been delayed and mishandled due to idiocracy. This will lead to “cost-reflective” electricity bills.