ACTION TV : Sri Lanka to lose foreign exchange over coal transport scam?

ACTION TV : Sri Lanka to lose foreign exchange over coal transport scam?

Written by Staff Writer

11 Aug, 2019 | 9:52 pm

Colombo(News 1st) –  The transport of the coal to the Norochcholai Coal Power plant has been based on an agreement between the Lanka Coal Company and the Ceylon Shipping Corporation. The Ceylon Shipping Corporation is a holding company of the Lanka Coal Company. This organization has not been given a monopoly on the transport of coal from Naanpuram to the jetty because prices and fares are decided based on international market rates.

Due to this decision, the Ceylon Shipping Corporation has saved the country a sum in excess of US$ 30 million in foreign exchange. A considerable amount of this cost-saving has been attributed to the Ceylon Electricity Board.

It is in such a backdrop that the subject minister has recommended that the service provided by the Ceylon Shipping Corporation be transferred to another company.

He said the firm will be a private entity that will be established with the involvement of the Lanka Coal Company. There is the possibility that the new partner may be a foreign firm. The minister has recommended that the Ceylon Shipping Corporation need not be part of the new entity, as they themselves are shareholders of the Lanka Coal Company. If approval is given for such a proposal, there is the possibility that the country may lose considerable amounts of foreign exchange.

A number of other proposals have also been put forward by the minister. This includes separately tendering the insurance related to transporting coal.

At the moment, the Lanka Coal Company calls for prices on cost+insurance and freight basis. Within the scope of this pricing, suppliers make an effort to offer the product with the lowest capital costs, which in turn causes the cost of coal to fall. The removal of these components is a means through which another business opportunity may be created.

This opens the door for yet another party to come into the middle to make commissions.

Will this not finally reflect in higher prices for the consumer?

Secretary to the President, this is for your attention.

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