Lanka Coal Company warns of coal crisis potentially worsening

Chairman of the Lanka Coal Company, Shehan Sumanasekera, has raised concerns about the continuation of operations at the Norochcholai power plant if the required funds for coal purchase are not obtained.

Speaking at a media briefing held this afternoon (04 Feb.), Sumanasekera stated that Rs. 15.3 billion is required immediately for the procurement of coal for the upcoming week, proposing that Central Bank of Sri Lanka (CBSL) provide the required amount in dollars.

Explaining the seriousness of the coal crisis, Sumanasekera said that while payments for such shipments are usually done in two installments – 30% at the time of the shipment, and 70% when the coal is being unloaded – two of these payments have already been delayed wing to a lack of funds.

“We have to make these payments for three coal shipments from 30 January to 03 February. We have paid the first installment of 30% of Rs. 1.35 billion for one shipment, however the initial installments for the other two ships are yet to be paid, and these were due on Thursday and Friday of last week”, the Chairman said.

He further noted that a more complicated situation is likely to arise in the upcoming week, as the initial payments of 30% to two of the three shipments, and the remaining 70% due for all three ships will be added to the cost of Rs. 10.74 billion required for coal procurements scheduled for the period between today (04 Feb.) and 10 February.

Thus, Sumanasekera urged that an immediate solution be found for this crisis, before the power plants run out of coal. 

Earlier today, Sumanasekera requested Minister of Power and Energy Kanchana Wijesekera for USD 12.32 million, amounting to Rs. 4.56 billion, to pay for the three shipments of coal for which payments are overdue.