### Coal Procurement Delays Risk Power Tariff Hikes 📈

Sri Lanka's largest coal procurement—1.5 million MT valued at approximately US$ 150 million—is facing significant delays and procedural controversies, threatening national energy security and "cost-reflective" electricity pricing. • Core Figures & Bids The tender for the 2025/26 season was awarded to Trident Chemphar at a CIF price of US$ 98.50/MT. This narrowly beat a US$ 100.00/MT bid from Potencia (SUEK) and a US$ 105.00/MT offer from Aditya Birla. Analysts warn the winning price leaves zero margin for logistical contingencies. • Supply & Quality Concerns Trident has reportedly missed scheduled laycans; only 3 of 6 planned January shipments are on track. Provisional data suggests first shipments failed quality tests at the Norochcholai plant, showing higher ash content (21% vs 16% limit) and lower calorific values (5,600 kcal/kg vs 5,900+ required). Inefficiencies mean ~117 MT of this coal is needed to produce the same power as ~108 MT of high-quality Russian coal. • Economic Impact Financial Loss: Irregularities and quality drops are estimated to cause a Rs. 7.5 Bn (approx. US$ 38 Mn) burden. Process Lapses: Standard 42-day bid preparation times were slashed to 21 days, while qualification criteria (turnover and past performance) were significantly lowered. Tariffs: With coal accounting for ~40% of generation, these added costs and potential spot-market purchases are likely to be passed to consumers via higher electricity bills.