The government has withheld more than Rs. 9 billion in payments to a coal supplier after multiple shipments failed quality inspections, Transport Minister Bimal Rathnayake disclosed at a special media briefing on April 17.
The briefing came hours after Energy Minister Kumara Jayakody resigned over the coal procurement controversy that has dominated political debate for weeks.
Withheld Amount Exceeds Estimated Losses
Rathnayake said payments for three coal shipments totalling over Rs. 5 billion remain unpaid after the consignments failed inspection tests. A USD 15 million performance bond — approximately Rs. 4.5 billion — has also been retained, bringing the total withheld amount to Rs. 9.15 billion.
“Even though losses were estimated at around Rs. 8 billion, we have retained a higher amount. Therefore, there will be no loss to the public,” the minister said.
The Public Utilities Commission of Sri Lanka (PUCSL) confirmed separately that energy losses from the low-quality coal will not be passed on to electricity consumers through tariff adjustments.
Financial Recovery, Not Physical Return
The minister explained that rejected coal cannot physically be returned once shipped. Instead, the mechanism for recovery is financial — through withheld payments, penalty clauses, and the performance bond.
“Any loss will be borne by the supplier. It will not affect the public or the government,” Rathnayake said, adding that penalties are imposed based on established contractual terms.
At the same briefing, Foreign Affairs Minister Vijitha Herath defended Jayakody’s integrity, stating no investigation had found corruption. A Presidential Commission of Inquiry covering all coal imports since inception has been formally gazetted to investigate the matter.
