News

Sri Lanka to buy Russian coal; LCC will no longer pursue Indonesian order

Published

1 year ago

February 12, 2023

editor

Sri Lanka is to buy 720,000 metric tonnes of Russian coal from two companies–China’s Combasst Industries Development Ltd and Dubai’s Coral Energy DMCC–after an earlier agreement with an Indonesian supplier fell through.

Lanka Coal Company (LCC) will no longer pursue the order from Indonesia’s PT Arista Mitra Jaya. On Monday, the Power and Energy Ministry secured Cabinet permission to buy the stocks from the other two companies shortlisted along with Arista Mitra and Hans Australia Pty Ltd. Hans Australia was later ruled out on the basis of certain terms they required fulfilled.

LCC first placed its order with the lowest supplier Arista Mitra for US$ 240 per ton with 180-day credit. However, the Mandira Bank of Indonesia rejected the usance Letter of Credit (LC) opened by Lanka Coal Company without providing a reason, a Cabinet paper submitted on Monday by State Minister D. V. Chanaka, said.

Arista Mitra then sought to transfer the LC to a third party “where such a transfer is not possible within the context of the contract,” the Cabinet paper said. LCC would, on the Attorney General’s advice, terminate this contract.

The purchasing matter subsequently went to a ministerial sub-committee and the standing Cabinet-appointed procurement committee (SCAPC), after which Combasst Industries and Coral Energy were selected.

Combasst would sell the coal at US$ 230 per MT with 200-day credit, LCC Chairman Shehan Sumanasekara said.

Twenty percent of cargo value would be deposited by LCC in a non-resident rupee account and the balance to the same account, in equal portions. After the credit period, the rupees would be changed into dollars and remitted to the supplier. Combasst’s price was indexed to the Russian Coal Index (RCI).

Coral Energy was selling at a fixed price of US$ 240 per MT, Mr. Sumanasekara said. Under this agreement, there would be no payment until the cargo was discharged at Lakvijaya in Norochcholai, and disbursement would be according to usage (that is, “storage model”).

“This means that, today if the plant requires 5,000 MT despite having one to eight shipments unloaded, we will pay only for the desired quantity,” the Chairman said.

It was anticipated that the coal from Coral Energy would be used for the first time in early June this year.

“Even then, out of the total payment, 80 percent will be disbursed per usage on the same day and there will be a further 120 days of credit for the usage of the balance 20 percent. Both parties have provided the needed credit terms with two different mechanisms,” he said.

LCC had struggled to purchase fuel since its last competitive tender fell apart late last year. The latest companies were selected on the basis of unsolicited proposals after the Cabinet granted approval to this procurement method, alongside permission to make purchases through government-to-government agreements “considering urgent and exceptional circumstances.”

source – sundaytimes

News

Man arrested over selling overpriced Vadai to tourist

Published

5 hours ago

April 18, 2024

editor

The Tourist Police in Moragolla has arrested a man over selling an overpriced Vadai and tea to a foreign tourist in Kalutara.

Footage of the incident had sparked public ire after going viral online.

It has been revealed that the suspect is a 60 year old residing in Kalutara and is usually seen loitering near the eatery.

Police say that investigtations have revealed that he had duped foreigners visiting the eatery many times.

He is to be produced before the Kalutara Magistrate Court tomorrow (April 19).

It is also reported that officials of the Consumer Affairs Authority (CAA) and the Moragolla Tourist police have also arrived at the eatery, and sternly advised the owner after questioning him.

News

NPP’s 7-point statement on Easter attacks, presented to the Cardinal

Published

5 hours ago

April 18, 2024

editor

The National People’s Power (NPP) today (April 18) presented to Archbishop of Colombo – Cardinal Malcolm Ranjith, their 7-point statement pledging to mete out justice to the victims of the Easter Sunday attacks.

The statement included key points such as implementing law against those responsible for the attacks so as to mete out justice to those who lost lives in the attacks and family members of the victims and to take action against those who were directly or indirectly involved in the attacks.

NPP members Professor Krishantha Abeysinghe, Attorney-at-Law Sunil Watagala, President’s Counsel Upul Kumarapperuma, Rohan Fernando and Aruna Shantha Nonis participated in the occasion.

News

IMF ready to support Sri Lanka’s discussions with bondholders

Published

5 hours ago

April 18, 2024

editor

The International Monetary Fund (IMF) stands ready to support Sri Lanka’s discussions with international bondholders and will provide a formal assessment after the parties reach a tentative agreement-in-principle, an IMF spokesperson said on Thursday.

“We hope an agreement consistent with the parameters of the IMF-supported program and official creditors’ Comparability of Treatment requirements can be reached soon, ahead of completing the second review under the program,” the spokesperson said.

Sri Lanka said it failed to reach an agreement with bondholders to restructure about $12 billion debt earlier this week, raising concerns there could be a delay in the island nation receiving a third tranche of its $2.9 billion IMF program in June.

The government said one of the main stumbling blocks had been that the “baseline parameters” of the bondholders’ plan had not matched those embedded in its IMF program.

“We encourage both parties to continue their discussions swiftly,” the IMF statement added.

Sri Lanka will consult with the IMF to assess if the latest proposals discussed with bondholders were within the parameters of its bailout program.
The island nation defaulted on its foreign debt in May 2022 and kicked off negotiations with bilateral creditors several months later, eventually securing an agreement in principle with China, India and the Paris Club last November.

Sri Lanka plunged into its worst financial crisis since independence from the British in 1948 after its foreign exchange reserves fell to record lows in early 2022, leaving it unable to pay for essentials including fuel, cooking gas, and medicine.

(Reuters)