By: Staff Writer
October 22, Colombo (LNW): Sri Lanka’s electricity sector is confronting another major accountability crisis after an expert committee estimated that the use of inferior-quality coal at the Lakvijaya Power Plant in Norochcholai had resulted in additional costs and financial losses amounting to Rs. 18.3 billion, raising serious questions about procurement safeguards, quality assurance and the management of a critical national energy asset.
The findings, presented to Parliament by Sectoral Oversight Committee on Infrastructure and Strategic Development Chairman and SJB MP S.M. Marikkar, place the financial consequences of the coal controversy under renewed scrutiny. However, the report dated October 7, 2026, distinguishes between the estimated Rs. 15.7 billion attributable to substandard coal and a separate Rs. 2.3 billion premium paid for emergency procurement, which it says should not automatically be classified as a financial loss.
The coal was supplied by India’s Trident Chemphar Ltd. under a term tender for 1.5 million metric tonnes scheduled for delivery between December 2025 and May 2026. Of the 25 shipments planned, only 19 were received because of quality-related problems, according to the report. The first shipment arrived on December 31, 2025, while the last arrived on July 3, 2026.
The largest component of the estimated loss, Rs. 7.1 billion, resulted from increased coal consumption. The plant burned 0.4419 kilogrammes of coal per kilowatt-hour, against the historical standard of 0.3742 kilogrammes established using 2018–2025 data. This represents approximately 18 per cent more coal for each unit of electricity generated.
The committee estimated that the resulting energy shortfall amounted to 461,838 megawatt-hours, requiring an additional 172,820 metric tonnes of coal valued at Rs. 41.08 per kilogramme. Its calculation assumed that no factor other than inferior coal quality contributed to the increased consumption, an assumption that deserves careful examination when determining final accountability.
A further Rs. 8.6 billion was spent purchasing electricity from alternative sources to compensate for reduced generation between January 21 and September 15. Output declined by 197,673 megawatt-hours, with diesel-powered plants supplying much of the replacement electricity after hydropower covered 35,210 megawatt-hours.
Maintenance and handling added to the bill. Estimated additional maintenance costs reached Rs. 80.4 million for Unit 1 alone, while extra ash and pyrite handling cost Rs. 13.1 million. August inspections identified severe ash accumulation and solidification in boiler air preheaters, requiring Rs. 67.5 million for dismantling, cleaning and reinstallation. The cost of repairs to the other two units remains undetermined pending internal inspections.
The findings expose a central weakness in public-sector energy procurement: a contract’s apparent price advantage means little if poor-quality supplies undermine generation efficiency and force the country to purchase expensive replacement electricity.
The committee’s calculations, however, are not the final word. The Public Utilities Commission of Sri Lanka warned that the economic impact could be understated because hydropower was effectively valued at zero and diesel generation was assessed using subsidised prices rather than the country’s actual economic costs.
The government must now establish whether procurement specifications, inspection procedures and contractual remedies were adequate, and whether any failures warrant disciplinary or legal action. Parliament must also demand a complete assessment of all three generating units and disclose the findings publicly.
For consumers already carrying the burden of electricity costs, the central question is whether those responsible for protecting public funds will face meaningful accountability.
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