The Sri Lankan government has withheld more than Rs. 9 billion in payments to a coal supplier following concerns over substandard shipments, according to Minister Bimal Rathnayake.
Speaking at a special government media briefing in Colombo, the minister stated that the retained amount exceeds the estimated financial loss caused by the low-quality coal, ensuring that neither the public nor the government bears the impact.
Rathnayake revealed that payments totaling over Rs. 5 billion for three coal shipments have been suspended after the consignments failed to meet required inspection standards. In total, approximately Rs. 9.15 billion has been withheld from the supplier.
“Although the losses were estimated at around Rs. 8 billion, we have retained a higher amount. Therefore, there will be no loss to the public,” he said.
He further explained that the retained sum includes a USD 15 million performance bond — equivalent to about Rs. 4.5 billion — intended to offset potential damages.
Addressing concerns about electricity costs, Rathnayake emphasized that the reduced energy output from the coal would not result in higher electricity bills. He cited assurances from the Public Utilities Commission that such losses would not be passed on to consumers.
“Any loss will be borne by the supplier. It will not affect the public or the government,” he added.
The minister also noted that penalties are applied based on established quality standards, and that once coal shipments are delivered, they cannot be returned — making financial safeguards such as withheld payments and performance bonds essential for recovery.
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