Sri Lanka has imposed US$27 million in penalties on Indian coal supplier Trident Chemphar Ltd over substandard shipments under its current term contract, Deputy Energy Minister Arkam Ilyas told reporters in Colombo on Tuesday, marking the first cumulative penalty figure disclosed since the Lakvijaya quality dispute escalated.
The fine covers the first 15 of 19 shipments under the term contract, all of which test results found to have lower Gross Calorific Value than specified, EconomyNext reported. “We have imposed a 27 million dollar penalty from the first 15 shipments,” Ilyas said at the media briefing. A separate US$15 million performance bond is also being held by the government, he added — an escalation from the US$22 million in fines plus US$15 million bond he disclosed on May 11.
Of the 19 term-contract shipments, 17 have so far arrived, all behind schedule. The paper trail in the case showed Trident Chemphar sourced the coal from South Africa for the Chinese-built Lakvijaya (Norochcholai) power station and submitted test certificates from an Indonesian laboratory whose accreditation had expired, a finding that triggered the Presidential Coal Commission inquiry.
Energy Minister Anura Karunathilaka, speaking at the same briefing, said the government would not pay demurrage on any delayed unloading. “All the shipments we ordered have arrived. There is an issue of delay. 19 shipments are from the term contract and five are from emergency purchasing,” he said, blaming rough seas for the unloading hold-up. Sri Lanka has ordered 24 coal shipments in total, including five emergency purchases, with shipments originally due by April only now coming in.
The disclosure adds a concrete dollar figure to the Rs. 9.15 billion withheld from suppliers flagged earlier this month and feeds the Presidential Coal Commission’s broader inquiry into procurement irregularities since 2009. The commission has already taken statements from the Auditor General and the Energy Secretary, and is examining whether Trident Chemphar’s performance amounts to breach of contract or fraud.
Source: EconomyNext.
