Power generation: Coal tenders extended

The closing date of the term tender bids for the supply of coal for the Lakvijaya Coal Power Plant in Norochcholai has been extended by another 10 days by the Lanka Coal Company (LCC), The Sunday Morning learns.

The term tender bids were previously scheduled to be opened on 25 October but have now been extended till 4 November, it is learnt.

When contacted by The Sunday Morning, LCC General Manager (GM) Namal Hewage said the duration had been extended to allow maximum participation in the bidding process.

According to the notice published by the LCC inviting bids for the term tender, the contractors are looking for the supply of 2,250,000 MT ± 10% for Lakvijaya Power Plant from October 2022 to April 2024 at a minimum of a 180-day credit facility.

The tender was an open tender unlike the previously submitted tender, where the bids were invited only from registered suppliers.

However, according to the LCC, the minimum eligibility criteria for prospective bidders include that a company should have been registered for more than three years, a minimum of one million MT of coal should have been supplied within the last three consecutive years having Gross Calorific Value of above 5,900 kCal, and an annual average turnover of $ 50 million should have been recorded per year for the last three consecutive financial years.

When asked whether the time had been extended as there were no bidders as claimed by Power and Energy Minister Kanchana Wijesekera recently, LCC GM Hewage refused to divulge information, stating that revealing information on bidders was prohibited until the bid was opened.

Hewage said that it was too early to comment on the bidders as the two tenders – one spot tender and one long-term tender – calling for coal supply were still open for bidding and the response from bidders could only be observed once the tenders were closed.

“The spot tender will be closed on 25 October and for the long-term tender, the bidding period will be extended further to make room for more bidders,” he said.

As learnt by The Sunday Morning, the bid closing date for the spot tender has been extended by the LCC.

However, it is reliably learnt that the spot tendering had been opened for registered suppliers and all nine suppliers had participated in the pre-bid meeting held recently.

The Government cancelled the contract worth $ 1.4 billion which was recently awarded with Cabinet approval to Russia’s Suek AG/Black Sand Commodity that offered $ 328.22 per MT (including freight charges), the lowest bid to supply nearly 4.5 million MT of coal to Lakvijaya for three years on a six-month credit period.

Minister Wijesekera announced the cancellation of the coal tender awarded last month by the Cabinet on the request of the Ministry as the selected supplier, Black Sand Commodities FZ-LLC, had communicated the inability to perform the tender, citing concerns over the impact of legal cases filed and payment guarantee risk.

– By Maheesha Mudugamuwa

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