News
Coal bids: Unsolicited proposals from nine parties
View(s):- Selected company required to deliver 72,000 MT of coal by next April
By Namini Wijedasa
Nine parties have tendered unsolicited proposals to supply 12 shipments of 72,000 metric tonnes of coal to Lanka Coal Company (LCC) (Pvt) Ltd.
The offers all came in by December 1, following last month’s Cabinet approval to purchase coal on Government-to-Government contracts and unsolicited proposals. Bids for both recent competitive term and spot tenders were deemed unresponsive.
None of the nine parties—including Coral Energy DMCC of the United Arab Emirates, which won fuel contracts from Ceylon Petroleum Corporation this year—are registered as coal suppliers with LCC.
As coal stocks are required urgently, vetting company credentials has been fast-tracked with much credence given to recommendations from respective embassies and high commissions.
The selected company would be required to complete delivery of all 12 shipments by April next year. It must provide at least six months credit. Offers had come from all traditional markets, including Russia, Australia, Indonesia and South Africa.
But a bidding war already seems to be brewing: One of the parties, the Hong Kong-headquartered Combasst Industry Development Company Ltd, this week fired a stinging letter to Power and Energy Minister Kanchana Wijesekera targeting a member of the local Standing Cabinet Appointed Procurement Committee (SCAPC).
The communication, which was leaked to the media, said the authorised Sri Lanka-based representative of Combasst at Xiaohang Yu, was invited by LCC to the Power and Energy Ministry on Wednesday to discuss its offer.
“At the meeting to my utter amazement SCAP [sic] member R.W.R. Pemasiri was extremely aggressive and hostile in questioning the registered address of the company, background of the company and the mandate of the company,” it said. “This is out of charector [sic] and Combasst had previously participated in LCC spot tender in October and documents of Combasst were verified by eRoc to issue Pca1 and Pca3 certificate.” (These are company registration documents).
The company says it is “alarmed and shocked by the set of unrelated and uncharacteristic set of questions raised by SCAP [sic] member despite not inquiring our ability to provide 200 day credit period at the most challenging Economic [sic] time in Sri Lankan history.”
Mr. Pemasiri is the Secretary of the Highways and Road Development Ministry.
“This aggressive and unethical behaviour cannot be accepted by our consortium and therefore we request to get a clarification from the Hong Kong administration via the Chinese Embassy or the Sri Lankan Embassy in Beijing,” the letter stated.
Recent coal procurements had been marred by behind-the-scenes lobbying led by local agents, some who were powerful business interests in Sri Lanka.
Meanwhile, LCC was likely to require a performance bond from the selected supplier to ensure the shipments were delivered. However, the supplier, too, would absorb considerable risk as the company had scraped the barrel to find US dollars for each consignment.
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