Coal fiasco undermines Government’s credibility

Fighting corruption was the prime slogan of the NPP and while in the Opposition, the JVP-led alliance portrayed themselves holier-than-thou and accused everybody else corrupt to the core. Ironically, with just one year into the Government, those who came to wipe out bribery and corruption are facing serious allegations that question their commitment to good governance and systemic change.

The administration is facing mounting criticism over low-quality coal purchased by the Ceylon Electricity Board (CEB) relating to coal imported for Norochcholai Lakvijaya Power Plant, the country’s largest coal-fired facility with a capacity of 900 MW, in late 2025 and early this year. The CEB had informed a Parliamentary Sectoral Oversight Committee that the utilisation of substandard coal in power generation had resulted in estimated direct losses amounting to Rs. 7.7 billion.

Unfortunately, the issue has emerged at an extremely critical time for the energy sector, as Sri Lanka is now approaching the dry season, which increases demand for electricity apart from reducing the capacity of hydropower generation. The prevailing instability in the Middle East has created doubts about the ability to source fuel from the world market as the Straits of Hormuz, an essential and largely irreplaceable, conduit for oil exports from the Middle East to global markets, remains effectively closed. Meanwhile, the Public Utilities Commission of Sri Lanka (PUCSL) has warned of a possible risk of power cuts due to the use of inferior quality coal affecting generation capacity at the Lakvijaya Power Plant.

An extended period of power cuts beginning would create a very difficult situation for the general public as the months of April and May are generally associated with very high temperatures, thus raising the demand for electricity among households. People may recall that the widespread agitation against Gotabaya Rajapaksa’s presidency in 2022 began when the CEB had to enforce extended power cuts during the period of April and May.

As per reports internal documents from Lakvijaya coal power plant had indicated that samples from the first three consecutive shipments of South African coal, bought through India’s Trident Chemphar Ltd, failed quality tests. Accordingly, each coal shipment demonstrated Gross Calorific Values (GVC), which represent the heat released upon combustion  that were well below the levels required to generate optimum electricity from the plant’s three units. Also, ash content in some shipments was recorded above 22%, exceeding the permitted limit of 16%.

In early 2025, the Power and Energy Ministry had stepped in to conduct the tender on behalf of the Lanka Coal Company (LCC). Critics allege that amendments were made to the bidding documents before the tender was issued, raising concerns whether the changes were made to benefit favoured suppliers. Furthermore, the tender submission period had also been shortened, limiting the time available for potential bidders. Such changes invariably reduce competition and weaken transparency in public procurement. In August 2025, LCC Chairman A.S.D. Perera resigned amidst allegations of serious irregularities in the tender process for coal procurement. In his resignation letter, Perera had claimed that neither him nor the Board of Directors of the LCC could be held responsible for any consequences arising from coal tender procedures as all major decisions were made by the Secretary to the Ministry of Power and Energy and his team.

While the Government is under fire over the coal fiasco, last week Bribery and Corruption Commission filed two indictments against and Energy Minister Kumara Jayakody, over an alleged corruption amounting to more than Rs. 8.8 million, which had taken place in 2014 when Jayakody served as Procurement Manager of the Lanka Fertiliser Company.

In the backdrop of the aforesaid developments, Jayakody’s continuity as a Cabinet Minister undermines the Government’s commitment to fight corruption as well as change the rotten system of administration. It is incumbent upon the administration to ensure that a highly critical ministry like Power and Energy is led by individuals who are beyond suspicion and scrutiny.