Tuesday, September 27, 2022
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What is so rotten about Coal procurement?

In a very unusual turn of events , Lanka coal company on 21 st September , wrote to the energy ministry recommending and requesting to buy coal at USD 355 per metric ton , while a consortium led by Browns investments offered to sell coal at 320 per metric ton!

In a early filling to the Colombo stock exchange on 21st September , Browns Investments disclosed to the share market that it , together with its consortium partners has offered to supply coal to the country at a price of USD 290 per metric ton plus USD 30 for freight. This offer has been made to Lanka coal company on 12 Th august. Also as per the offer , it requires only 50% payment in USD and balance 50% they have agreed to accept rupees or 5 year rupee loan !

While this offer is on , On 21 st evening itself , Lanka coal company has requested energy ministry to buy 300,000 metric tons of coal ( 5 shipments) from another supplier named Swiss Singapore, at a price of 355 per metric ton , thereby overpaying approximately 10 million USD for the five shipments! Also each shipments has to be paid in full , in USD , before unloading, thereby overpaying 60million USD more per month , compared to the offer they have from Browns!

On an earlier letter addressed to the finance ministry, browns officials have requested government if 48 million USD per month can be released ( that is 50% USD component) they can ensure adequate coal supply to the country to ensure uninterrupted power generation.  This letter has also been copied to the energy minister and governor central bank. However as per the letter of 21 st September of Lanka coal company , it needs 107 million USD to be released by central bank during October itself to buy five coal shipments from Swiss Singapore. When inquired , browns Investments officers said that they can easily import 11 shipments to the country , that is 660,000 metric tons , if this amount of foreign currency can be released to them and said that they are awaiting for the authorities to take a proper decision in this regard.

By a special correspondent

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