A damning audit uncovers procurement irregularities, expired licenses, and millions in losses, raising serious concerns over Sri Lanka’s power supply stability.
The audit report on the substandard coal has revealed a series of alarming allegations, including the revocation of a laboratory license linked to the inspection process.
A special audit report issued by the National Audit Office has exposed serious discrepancies and procurement irregularities in the coal purchasing process for the Norochchola Lakvijaya Power Plant for the 2025-2026 season.
The Auditor General initiated this investigation following a formal request made by the Committee on Public Enterprises, highlighting growing concerns over transparency and governance in energy sector procurement.
According to the audit findings, three suppliers who had not completed their official registration at the time bids were called were still allowed to submit proposals. More concerning is the observation that the company eventually selected for the coal procurement had also not finalized its registration by the closing date of the bid process.
The report further highlights that MitrasK South Africa, appointed by the seller to verify coal quality standards, did not possess the required accreditation to conduct such testing, raising serious questions about quality assurance mechanisms.
Additionally, the license of an Indonesian inspection company responsible for issuing quality verification reports had expired by December 2025, with no evidence of renewal by March 2026.
Despite this critical lapse, the audit confirms that 12 shiploads of coal were accepted based on reports issued by this unaccredited entity, exposing a major compliance failure.
The Auditor General also notes that the Lanka Coal Company failed to import any coal shipments within the required 40-day period between November and December 2025, leading to further operational disruptions.
As a consequence, authorities resorted to emergency procurement on March 18. The audit reveals that the selected private supplier, Taranjet Resources, had previously failed to deliver coal with the required thermal value and had faced prior rejections.
The report warns that due to these procurement weaknesses and delays in securing coal stocks, there is a high risk of future shortages that could impact the continuous operation of the Lakvijaya Power Plant.
Such disruptions, the Auditor General cautions, could have a direct negative impact on the country’s electricity supply and energy security.
Financial losses linked to the use of substandard coal have also been highlighted, with estimated damages amounting to approximately Rs. 224 million.
A detailed breakdown in the report reveals significant losses across multiple shipments. The first ship recorded losses exceeding Rs. 160 million, the second over Rs. 90 million, the third over Rs. 310 million, the fourth over Rs. 150 million, the fifth nearly Rs. 180 million, the sixth nearly Rs. 300 million, the seventh over Rs. 240 million, the eighth over Rs. 390 million, and the tenth ship also exceeding Rs. 390 million.
The audit further notes that if alternative energy sources must be used due to the inability to generate power at full capacity of 300 megawatts, the estimated additional energy requirement would reach 76,354,087 kilowatt hours.
