By: Staff Writer
February 24, Colombo (LNW): From Fertilizer Files to Energy Firestorm: Past Disciplinary Ruling Resurfaces as Coal Tender Controversy Engulfs Power Ministry
A past disciplinary investigation at the Lanka Fertilizer Corporation has resurfaced in Parliament, intertwining with the escalating controversy over the 2025/2026 coal procurement process and intensifying scrutiny on Minister of Power and Energy Eng. Kumara Jayakody.
The renewed political storm was triggered by allegations raised during a parliamentary session on the 20th, concerning Jayakody’s tenure as Procurement and Import Manager at the Lanka Fertilizer Corporation during 2014–2015. The accusations relate to the procurement of carpets for the Hunupitiya Central Warehouse Complex.
An internal investigation report submitted to the corporation’s Board of Directors on February 21, 2019 outlined five charges.
The first alleged that Jayakody caused a loss of Rs. 8,859,708 by failing to adhere to contract condition No. 51.01, particularly in relation to advance payment guarantees and execution standards. The second accused him of acting adversely to the company by not extending the contract period or requesting an extension of the contractor’s bank guarantee when required.
The third charge focused on the failure to obtain a mandatory five percent performance bond within 28 days after completion of the contract. The fourth noted that a performance bond valued at Rs. 2,214,927 was maintained at the People’s Bank branch in Yakkala from February 6 to May 5, 2014, even though the project’s completion date was May 10, raising oversight concerns. The fifth alleged neglect of duty and conduct contrary to disciplinary regulations.
According to findings cited in Parliament, Jayakody was found guilty of two of the five charges and subjected to disciplinary action. Critics argue that the consequences did not result in long-term political repercussions.
The controversy has expanded into questions surrounding cabinet appointments. Opposition voices claim that President Anura Kumara Dissanayake later exempted Jayakody from certain penalties, clearing the path for his elevation to ministerial office. These claims remain politically contested, and no legal finding has established wrongdoing in connection with the appointment.
The resurfaced disciplinary case now intersects with the ongoing coal procurement debate. Allegations surrounding the Lakvijaya tender including shortened bidding periods, reduced eligibility thresholds, substandard coal imports with reported GCV levels of 5520, and potential losses estimated by some opposition members at up to Rs. 100 billion have reignited questions about procurement oversight and ministerial accountability.
At the same time, the Ceylon Electricity Board faces acute financial stress. A proposed 13.56 percent tariff hike seeks to offset a Rs. 15.8 billion revenue deficit in the second quarter of 2026. The Public Utilities Commission of Sri Lanka has scheduled public consultations, having already rejected an earlier tariff increase this year.
Minister Jayakody continues to reject all allegations related to the coal tender, citing compliance with 2023 procurement guidelines, competitive participation by 26 registered suppliers and 10 valid bidders, a USD 2.79 million penalty clause, and the retention of a 10 percent performance bond.
As parliamentary oversight intensifies, the broader debate is shifting beyond individual accusations. It now centers on whether Sri Lanka’s procurement systems from fertilizer warehouses to power plants have developed sufficient transparency, safeguards, and enforcement mechanisms to prevent financial leakages in high-value state contracts.
With electricity tariffs rising and public trust in state institutions under strain, the convergence of past disciplinary findings and present-day procurement allegations has placed the Power Ministry under its most sustained scrutiny in years.
Whether this episode results in institutional reform, legal proceedings, or political fallout will depend on the evidence that emerges in the months ahead.