(This article was originally published in Daily FT on 11th August 2016)

By Ashwin Hemmathagama – Our Lobby Correspondent

A controversial coal tender has brought in profits according to the findings of a special committee which compiled a report on the tender procedure, Minister of Power and Renewable Energy Ranjith Siyambalapitiya confirmed yesterday in a special statement to Parliament.

Minister Ranjith Siyambalapitiya

Minister Ranjith Siyambalapitiya

Revealing the committee findings to Parliament, he said: “The ministry has introduced the tender mechanism, which has saved $ 7.6 million. However, the ministry is making use of a mix of the regular tender system and the spot tender system to assure source diversity and supply security. Based on global price fluctuations it was important to maintain a mix of the purchasing system.”

In the report, the committee has recommended including technical specifications on larger and smaller pieces of coal in the bidding process.

“Even though a surcharge was applied, the price differences have enabled us to save $ 287,029.73. It is also important to make use of the composite price index to maximise savings regardless of the supplier source, which could be from Indonesia, South Africa, Australia and Russia. Anyway, we clearly see a profit for the Government from the long-term coal purchases under a standard and spot tender system,” confirmed Minister Siyambalapitiya.