No loss to Govt. on coal deal: Siyambalapitiya

The Government had not incurred any loss due to the coal purchasing deal as alleged  by some people and a committee of experts had been appointed to look into the matter, Minister of Power and Energy Ranjith Siyambalapitiya said today.

Minister Siyambalapitiya said there had been only one coal supplier to Ceylon Electricity Board (CEB) between 2009 and 2015 and added that the CEB had incurred millions in losses due to its inefficient and inconsistent supply.

“Tender Board wanted to break the monopoly and create competition among coal suppliers. Now we have about 12 competitive suppliers”, he said.

He said the Cabinet had decided to give a tender to purchase annual coal requirement of 2.2 million metric tons, equally in two years and the other 50 per cent to be purchased on spot tendering, to break the monopoly in coal supply, and to purchase coal at a competitive price considering the world market prices.

He said the Government had been able to save Rs. 1.1 bn as a result of the decision to purchase annual coal requirement of 2.2 million metric tons by 50 per cent each, from long term suppliers and on spot tendering.

He said the Government had to spend only US$ 114 mn to purchase annual coal requirement of 2.2 million metric tons from long term suppliers and on spot tendering.

He said that the Government would have had to spend US$ 121.5 mn, if they had purchased coal from the Nobel Resources Company based on the old system.

“We have managed to save US$ 7.5 million as we purchased coal on a new system. We have also been able to purchase the annul coal requirement of 2.2 million metric tons within seven months due to this new method of purchasing,” he said.

Minister Siyambalapitiya referring to the reports of the loss of Rs. 1,803 million to the CEB said the method of calculating the loss was wrong.

“The loss has been calculated by reducing the value of US$ 51.25 paid to a ton of coal purchased on long term supplier from the value of US$ 58 paid to a ton of coal purchased on spot tendering.

“It is not surprising to have two prices, when two tenders were called on two occasions. It is wrong to report on a loss or benefit to the Government by considering the difference of the prices of two different tenders called on two occasions.

“This US$ 58 paid to a ton of coal purchased on long term tender is not a fixed price. It varies depending on the fluctuation of the world market prices. The price of the spot tender depends on the market price each month.

“This alleged loss has been calculated by taking a price on one spot tender randomly and reducing it from the price of US$ 58 and multiplying the difference from the coal stock of the tender. The calculation is misleading,” he said.

He said the Auditor General had not released his report as yet and said it was wrong to create an opinion based on the Auditor General’s query. (Ajith Siriwardana)