📈 Audit Flags Systemic Failures in Coal Procurement

The National Audit Department has exposed significant governance and quality control breakdowns in coal purchases for the Lakvijaya Power Plant, contradicting recent statements regarding tender transparency. • Financial Impact: The audit identifies a direct loss of Rs. 2,237.7 million due to overconsumption of substandard coal. An additional Rs. 2,332.5 million has been marked as recoverable penalties from the supplier, Trident Chemphar Ltd. • Procurement Failures: Contrary to official claims, the audit found the selected supplier failed registration requirements at the bid stage. Lanka Coal Company (LCC) reportedly relaxed eligibility criteria to "unacceptable levels," allowing unqualified suppliers into the pool. • Quality & Testing: Coal quality assurance was compromised by using non-accredited laboratories with cancelled licenses. Substandard calorific values reduced generation efficiency, forcing the 900 MW plant to operate below capacity. • Supply Risks: Logistics failures resulted in only 12 cargoes arriving by March 2026, against a target of 18. This triggered emergency procurements and heightened risks for national electricity continuity. • National Context: Lakvijaya provides 30%–40% of Sri Lanka's energy needs. While the government aims to recover Rs. 7 billion in broader system costs from suppliers to avoid consumer tariff hikes, the audit highlights recurring systemic weaknesses in the energy sector dating back to 2016. _Note: Based on Special Audit Report dated 2 April 2026._