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The International Monetary Fund (IMF) has urged Sri Lanka to expedite the introduction of a comprehensive Public Procurement Law, warning that the country’s current tendering system remains highly vulnerable to corruption, wastage, and irregular decision-making.

The recommendation forms part of the IMF’s wider governance and transparency reform agenda aimed at strengthening public financial management and restoring investor and public confidence.

According to a recent IMF governance diagnostic report, Sri Lanka’s procurement process suffers from deep structural flaws, including the absence of an independent central regulatory authority, outdated procurement policies, and inconsistent oversight mechanisms. The IMF cautioned that without swift legal reform, Sri Lanka’s efforts to regain public trust and attract foreign investment will continue to falter.

At present, public procurement in Sri Lanka is highly fragmented, functioning across multiple layers of government—ministries, departments, and the Cabinet. While secretaries of line ministries are responsible for execution, high-value contracts are handled by Cabinet Appointed Procurement Committees (CAPCs) before final Cabinet approval. However, the IMF points out that this process allows excessive discretionary power at the Cabinet level, often resulting in politically influenced or opaque contract awards.

The issue was underscored by a 2006 Court of Appeal ruling, which stated that Cabinet decisions were not legally bound by procurement guidelines or recommendations from the Appeals Board—effectively legitimizing Cabinet’s freedom to override procedural safeguards.

To counter these weaknesses, the IMF has recommended the immediate activation of the National Procurement Commission (NPC) with a full governance mandate to regulate procurement and oversee unsolicited project proposals. It has also proposed an 18-month action plan to accelerate reform implementation.

A central component of the proposed reform is the Procurement Management Information System (PROMISe), which remains in its pilot stage. PROMISe is designed to digitize and automate the procurement process, enhancing monitoring and transparency from bid submission to contract award. However, the IMF stresses that the system’s success will depend on staff training, technical capacity, and integration with existing audit and accountability frameworks.

To further enhance transparency, the IMF recommends that the government publish details of all contracts exceeding Rs. 1 billion, including bidding outcomes and the level of competition, every six months on a dedicated public website especially for agencies with weak compliance records.

Experts note that the transition to a digital, rules-based procurement regime could be transformative for Sri Lanka, provided it is paired with stronger audit mechanisms and accountability measures.

As the nation continues its slow recovery from the worst fiscal crisis in decades, the IMF emphasizes that cleaning up procurement is not merely about saving money, but about rebuilding public trust and ensuring that taxpayers’ funds are used efficiently, transparently, and fairly

Lasantha Wickramasekara — widely known as ‘Midigama Lasa’ — the Chairman of the Weligama Pradeshiya Sabha, has tragically passed away after sustaining critical injuries in a shooting incident.

The attack took place this morning (22), right inside the Pradeshiya Sabha office, while the Chairman was seated in his official chair. Two unidentified gunmen, who arrived on a motorcycle, opened fire at close range.

Officials of the Pradeshiya Sabha immediately rushed him to the Matara General Hospital, but despite their efforts, he could not be saved.

It has now been revealed that the shooters had entered the premises under the pretense of delivering a document for signature — before launching the fatal attack.

The Department of Railways has announced the cancellation of five additional train journeys today (22), including the two night mail trains scheduled to operate between Colombo Fort and Badulla in both directions.

Authorities confirmed that service restrictions on the main line will remain in effect.

Earlier this morning, ten train services between Kandy and Colombo Fort were also cancelled, as operations along this key route remain heavily affected.

Train movement between Kandy and Colombo has been disrupted for several days due to a recent derailment and multiple earth slips reported at various points on the main line.

As a result, the Department further noted that trains on the Colombo Fort–Badulla route will currently operate only between Peradeniya and Badulla, until further notice.

The unlawful raw sugar imports have allegedly caused state losses amounting to 578 billion rupiah

The general manager of Wilmar International’s Indonesian subsidiary has been charged by the Indonesian public prosecutor over carrying out unlawful acts related to the importation of raw sugar in 2016.

Wilmar International

The unlawful imports had allegedly caused state losses amounting to 578 billion rupiah (S$45 million), said the company in a bourse filing on Monday (Oct 20).

The Duta Sugar International general manager is among representatives of eight other refined sugar producers in Indonesia who have been charged in the same case. The nine companies account for most of the country’s refineries that process imported raw sugar into refined sugar.

The producers maintain that they were acting under the direction of former trade minister Thomas Lembong, who instructed them to partner state-owned trading company Perusahaan Perdagangan Indonesia to import raw sugar and distribute refined white sugar to address a domestic sugar shortage in 2016.

Thomas Lembong

Lembong was subsequently arrested in October 2024 and charged by the Indonesia Attorney-General for violating the relevant trade regulation.

The attorney-general claimed that in approving import permits, Lembong had “helped to enrich” the nine sugar producers, causing an alleged total state loss of 578 billion rupiah. Duta Sugar International accounts for 7.8 per cent, or 45 billion rupiah, of the total alleged losses.

It also noted that profits made by the nine sugar producers should have gone to the state-owned company.

Lembong was found guilty on Jul 18, 2025, and was sentenced to four years and six months’ imprisonment and fined 750 million rupiah. He was also given a subsidiary penalty of six months’ imprisonment if the fine was not paid.

Representatives of the nine sugar producers have been detained and charged. The companies were required to place a combined security deposit of 565.34 billion rupiah with the attorney-general.

Duta Sugar International’s share of this deposit was 41.23 billion rupiah, said Wilmar.

Duta Sugar International

But the legal processes related to the sugar import case against Lembong were halted, following a presidential decree granting him abolition.

Consequently, the representatives of the nine sugar producers have argued that their case should be dismissed. The case is now pending the court’s decision. Wilmar said it will provide further updates once a ruling is made.

Wilmar also said that the financial impact of the 41.23 billion rupiah deposit paid by Duta Sugar International, if forfeited, would not be material to the company’s financial performance.

Shares of Wilmar : F34 0% ended last Friday 0.7 per cent or S$0.02 higher at S$2.95, before the announcement.

(Source - Businesstimes)

Singer (Sri Lanka) PLC, one of the country’s most recognizable consumer brands, is facing mounting allegations of unethical overcharging and financial manipulation in its dealings with major corporate clients — a practice that insiders say has quietly inflated profits, deceived stakeholders, and evaded the tax authorities.

Evidence obtained by Lanka-e-News reveals that the company has been issuing two separate invoices for the same corporate transactions — one through its official accounting system and another “manual” version reflecting a higher amount. The difference, which in some cases exceeds a million rupees per transaction, is allegedly retained as off-book profit, with no corresponding record in the company’s tax filings or financial statements.

Industry observers warn that if these claims are substantiated, they could expose serious violations of the Companies Act, the Inland Revenue Act, and the listing rules of the Colombo Stock Exchange — as well as significant lapses in corporate governance under the watch of the parent conglomerate, Hayleys PLC.

A Case Study: The SLT Air Conditioner Transaction

The clearest evidence of this practice appears in a transaction involving Sri Lanka Telecom (SLT), the state-owned telecommunications giant.

According to internal records reviewed by Lanka-e-News, Singer billed SLT Rs. 12,528,800 for the supply of 14 air conditioners through its official system. The corresponding invoice, issued under Singer’s registered VAT number, included statutory VAT and CESS (CCSL) contributions.

However, a separate manual invoice — bearing the same purchase order number — was issued to SLT for Rs. 13,980,400, inflating the price by over Rs. 1.45 million. This excess amount, insiders allege, was collected directly by Singer and retained without being declared to the Inland Revenue Department or accounted for in Singer’s audited financials.

 An internal source familiar with the transaction said:

“Everything looks clean on paper until you match the PO number to the manual invoice. That’s when you see the hidden margin. It’s systematic, not a one-off mistake.”

If this pattern has been replicated across multiple SLT branches — as suggested by sources in both companies — the total unrecorded revenue could run into tens of millions of rupees.

The Individuals Behind the Scheme

Two senior figures have been repeatedly named by employees and former managers as being directly involved: Indika Gunatilake, a senior corporate sales executive, and Mahesh Wijewardene, the company’s Chief Executive Officer.

Both individuals are said to have played key roles in introducing and maintaining the dual-invoice system, ostensibly to “accelerate” sales growth and meet aggressive quarterly performance targets set by Hayleys Group management.

An internal whistleblower told Lanka-e-News:

“After Hayleys took over Singer, there was tremendous pressure to show double-digit growth every quarter. When real sales couldn’t keep up, the easiest way was to adjust the numbers — not in the system, but outside it.”

When similar allegations surfaced last month on Lanka-e-News, Wijewardene and Gunatilake reportedly met with Mr. Mohan Pandithage, Chairman and Chief Executive of Hayleys, and dismissed the claims as baseless — even mocking the publication for getting Wijewardene’s alma mater wrong. Yet, Lanka-e-News can now confirm that credible information has since come from within Singer’s own senior management, as well as from individuals close to Hayleys’ internal audit division.

Mr. Mohan Pandithage

A Pattern, Not an Anomaly

Documents seen by Lanka-e-News suggest that this SLT incident is not an isolated case. The practice of issuing manual invoices — often printed on plain letterhead without official numbering — appears to have been used in multiple corporate sales, particularly those involving public sector institutions and large private clients.

One former finance officer described the process:

“A corporate order comes in, and the official invoice is entered at a lower value to match system thresholds and tax compliance. But a second invoice is raised manually with an inflated value — that’s what the client actually pays. The extra goes to a ‘special adjustment account’ controlled by a few senior managers.”

While Lanka-e-News could not independently verify the full scope of the alleged “special account,” internal sources estimate that this scheme may have inflated Singer’s reported corporate revenue by up to 8–10% annually — a figure significant enough to mislead auditors and investors.

The Role of Hayleys Group

Singer (Sri Lanka) PLC was acquired by Hayleys PLC, one of Sri Lanka’s largest conglomerates, in 2017. Hayleys’ takeover was meant to modernize Singer’s operations and integrate its retail network with the group’s broader manufacturing and logistics interests. However, insiders now claim that post-acquisition financial pressure and unrealistic performance expectations have led to questionable practices being normalized within Singer’s corporate sales division.

A former mid-level executive told Lanka-e-News

“Hayleys wanted Singer to look like a miracle acquisition — a turnaround story. But the numbers just didn’t match the reality. The double-invoicing system became a tool to close that gap.”

 If proven, such manipulation could expose Hayleys itself to regulatory risk under the Colombo Stock Exchange’s corporate governance rules and Sri Lanka’s Financial Reporting Standards (SLFRS).

Tax and Regulatory Implications

Experts say the alleged practice could amount to tax evasion, financial misrepresentation, and breach of fiduciary duty by senior officers.

Under Section 208 of the Companies Act No. 07 of 2007, directors and officers are legally obliged to ensure that financial statements give a “true and fair view” of the company’s position. Meanwhile, the Inland Revenue Act mandates strict VAT compliance and full disclosure of all taxable revenue. Any deliberate concealment of income constitutes a criminal offence punishable by fines and imprisonment.

A senior tax consultant, speaking on condition of anonymity, said:

“If Singer is inflating invoices and pocketing the difference without declaring VAT, that’s a serious offence. It’s not merely a civil issue — it’s criminal. The authorities can freeze accounts, issue penalties, and even prosecute responsible officers.”

The consultant added that manual invoicing to circumvent VAT reporting was a “common but dangerous” loophole exploited by some Sri Lankan corporates:

“They think the paper trail is invisible. But every manual invoice eventually meets an auditor’s desk.”

Impact on Shareholders and Market Integrity

As a publicly listed company, Singer’s financial transparency is not merely an internal matter. Thousands of shareholders, including institutional investors, rely on the company’s audited statements to make informed decisions. Artificially inflating turnover through unrecorded profits would constitute a serious misrepresentation of financial performance, potentially affecting share prices and investor confidence.

A senior official from the Securities and Exchange Commission of Sri Lanka (SEC) told Lanka-e-News:

“Any evidence of financial manipulation, especially by a listed entity, would warrant immediate inquiry. Misleading disclosures undermine the credibility of our entire market.”

Singer’s last annual report, released in 2024, highlighted “strong performance in corporate sales” as a key driver of profitability — a claim that now appears questionable in light of the allegations.

The Silence from Singer

When Lanka-e-News sought comment from Singer (Sri Lanka) PLC regarding the allegations, the company’s communications department declined to respond to specific queries, stating only that “Singer operates under the highest standards of corporate governance and ethical conduct.” Repeated attempts to reach Mr. Mahesh Wijewardene and Mr. Indika Gunatilake were unsuccessful. A spokesperson for Hayleys PLC said the company was “unaware of any irregularities” but would “take appropriate action if credible evidence is presented.”

However, employees within Singer claim internal auditors have already flagged “unusual variances” in several recent transactions. One insider noted:

There’s a quiet panic in the finance department. They know the numbers don’t add up. It’s just a matter of time before the auditors connect the dots.”

A Systemic Problem in Corporate Sri Lanka

Analysts argue that the Singer case underscores a broader malaise in Sri Lanka’s corporate culture, where companies often prioritize   short-term optics over long-term ethics.

 A business ethics lecturer at the University of Colombo, commented:

 “Corporate Sri Lanka has a transparency problem. When profits become the only metric of success, creative accounting becomes   the norm. The Singer case — if proven — is a symptom of that disease.”

She added that Sri Lanka’s regulatory bodies often act reactively rather than proactively:

“By the time authorities intervene, the evidence is diluted or destroyed. What we need is stronger forensic auditing and whistleblower protection.”

A Call for Accountability

Singer’s reputation as a household brand has been built over decades — synonymous with trust, reliability, and service. But behind that glossy public image, insiders describe a corporate structure increasingly driven by profit manipulation and internal cover-ups.

One long-serving employee, now nearing retirement, reflected:

“This isn’t the Singer I joined twenty years ago. We were proud to serve customers honestly. Now it’s about numbers and optics. Ethics went out the window.”

Regulators, investors, and the public will now be watching closely to see whether Hayleys PLC and Singer’s board act decisively to investigate these claims — or whether they choose the path of denial until external pressure forces their hand.

Until then, a question lingers in Colombo’s business circles: How many other invoices lie hidden — and how many more Sri Lankan consumers are unknowingly paying for a culture of deception?

If Singer continues to engage in these unethical billing practices, insiders warn, a full list of corporate clients subjected to overcharging through manual invoicing could soon emerge — triggering what could become one of Sri Lanka’s most significant corporate scandals since the Ceylon Petroleum fraud of the early 2000s.

By LeN Investigations Correspondent

(Source - Lankaenews)

The breakdown? Equity capital USD 133 mn, reinvested earnings USD 132 mm, intra-company borrowings USD 231 mn, and long-term foreign commercial loans USD 331 mn. 

A few large projects such as the USD 229 m investment by Colombo West International Terminal Ltd. (CWIT), USD 111 mn by CEAT OHT Lanka Ltd., USD 72 m by Michelin Lanka Ltd. and USD 85 m by Bluehaven Services Ltd. account for 66 % of the total, with “another 150 BOI-approved enterprises” covering the remainder.

At face value these numbers suggest a vibrant resurgence of investor confidence. But a closer look raises several red flags:

The BOI’s definition appears to lump foreign commercial loans and intra-company borrowings alongside “equity capital” and “reinvested earnings” as part of FDI. Conventional definitions of FDI typically emphasise equity investment, control and long-term relationship, rather than loans.

Of the USD 827 m claimed, only USD 133 m is equity capital; the remaining USD 694 m is debt-type financing (intra-company borrowings + commercial loans) or retained earnings. One must ask: do such “loans” qualify as genuine FDI inflows, or are they just cross-border finance flows?

The claim that 163 BOI projects yielded USD 326 m in local investment in the same period adds opacity: how do these relate to the foreign inflows? Are these distinct, overlapping, or double-counted?

Given the BOI is now projecting full-year inflows of “over USD 1 billion” for 2025, based on the first nine-months figure, the growth expectation seems optimistic especially in the context of existing investor complaints.

Turning to the United States Department of State’s “Investment Climate Statement” on Sri Lanka, the picture is far less rosy. The U.S. report states that FDI remains constrained, with most individual deals in the USD 3 m-5 m range the exact opposite of “mega-projects” dominating the BOI’s narrative. 

According to the U.S. State Department analysts: “Regulatory unpredictability, bureaucratic hurdles, and selective transparency continue to limit broader participation.” The report also notes that the BOI “remains hamstrung by fragmented authority and overlapping ministries, creating lengthy approval processes that frustrate potential investors.” 

When we place the BOI’s aggressively optimistic figures alongside the U.S. report’s cautionary tone, serious inconsistencies emerge. Can one credibly accept that the investment climate is so perfunctory when the BOI claims such a dramatic upswing while international assessments continue to find deep structural impediments? The mismatch suggests either:

A definitional stretch by BOI (counting financial flows as FDI that would not be classed so elsewhere),

Possible double-counting or aggregation of flows not strictly new foreign investments, or

An overly sanguine presentation detached from the on-ground investor experience.

In short: while the BOI’s headline figure grabs attention, the supporting breakdown and external commentary raise enough doubts to warrant a deeper audit of what exactly is being counted, and whether investors truly view Sri Lanka as the dynamic FDI destination claimed.

Prime Minister Dr. Harini Amarasuriya participated in the 75th Annual Convention of the All Ceylon Young Men’s Muslim Association (YMMA) Conference held on 20th October at the Cinnamon Life Hotel, Colombo.

The YMMA, founded by the late Dr. A.M.A. Azeez, a distinguished civil servant and senator, was established on the belief that youth and community engagement can bring meaningful change. Over the years, this vision has been upheld. Incorporated by an Act of Parliament and recognised as a charitable organisation, the YMMA has become a pillar of social welfare and community development.

Addressing the gathering, the Prime Minister stated:

“Through initiatives in education, youth development, disaster relief, empowerment of women and families in need, and community welfare, the organisation has supported thousands of individuals and communities.

It is commendable that the YMMA has played an important role in supporting Muslim women through initiatives such as the Young Women’s Muslim Association (YWMA) ‘Women Empowerment Project’ and the ‘Back to School Programme.’ Such programmes are valuable not only for individual development but also for society as a whole.

Your annual recognition of members and branches reflects the dedication of those who have given their time, energy, and resources to serve others.

As we reflect on 75 years of service, we must also look ahead. Challenges facing youth today, including unemployment and social exclusion, require strong partnerships between the government, civil society, and organisations like the YMMA. Evidence shows that boys have a higher dropout rate than girls, particularly after completing the G.C.E. Ordinary Level and Advanced Level examinations. This limits opportunities for young men to pursue higher education and vocational training. It is therefore essential to encourage and support boys to continue their education through guidance, mentorship, and accessible learning pathways.

I commend the YMMA’s ongoing commitment to developing responsible and capable young citizens. It is through these efforts that we can build a society grounded in equality, understanding, and shared opportunity.”

The event was attended by Deputy Speaker Mr. Rizvie Salih, Member of Parliament M.A.L.M. Hizbullah, members of the YMMA, and other distinguished guests.

Prime Minister’s Media Division

21.10.2025

The GovPay digital payment platform launched in February 2025 by the Information and Communication Technology Agency (ICTA) has already onboarded 170 government institutions and processed payments exceeding Rs 400 million within its first eight months of operation. 

At a press conference yesterday, Board member Harsha Purasinghe revealed that the rollout for spot traffic-fine payments via the platform in the Southern Province is underway, with over 400 mobile devices distributed to police stations to facilitate collection. He added that rollout to the Northern Province is next, and full national coverage is expected by year-end.

In the Western Province alone the system has processed nearly Rs 30 million from approximately 20,000 traffic violations. Phase two of GovPay will introduce a demerit-points mechanism for motorists, in coordination with the Department of Motor Traffic and the Department of Posts.

The broader digital payments ecosystem in Sri Lanka is showing remarkable momentum. According to the Central Bank of Sri Lanka (CBSL), Sri Lanka’s daily digital-transaction volume stands at about 1.65 million and the bank aims to push that to 2.15 million daily. 

Meanwhile, digital transactions surged by 45 % in 2023 underscoring growing consumer trust. 

GovPay is also part of a larger push to build a “digital revenue economy” where government services, payments and collections are streamlined and cash usage reduced. 

Over the next 4-5 years, the platform is expected to generate roughly Rs 1 trillion (≈USD 3.3 billion) in revenue via reduced leakage and improved collection efficiencies. 

While detailed statistics comparing the first nine months of 2025 to the same period in 2024 are not yet publicly disaggregated per sector, the digital payments infrastructure is clearly advancing. Key enablers such as the Common Electronic Fund Transfer Switch (CEFTS) support 24/7 real-time transfers among banks, enabling the digital-payments expansion. 

Economic observers say the benefits could be substantial: greater transparency in public-fund flows; faster revenue collection for infrastructure and public services; and stimulus to fintech and e-wallet markets which in turn drive financial inclusion. The government’s target to lift the digital economy’s contribution to GDP from current single-digit levels to 10-15 % over the next decade is anchored on platforms like GovPay. 

In sum, Sri Lanka’s GovPay initiative marks a crucial step in the nation’s pivot to a cash-light economy. With institutional commitment, supportive infrastructure and growing user adoption, the platform could meaningfully impact both governance and growth provided rollout remains on schedule and interoperability challenges are addressed.

The University of Peradeniya (UoP) has formalised a strategic partnership with China State Construction Engineering Corporation (CSCEC) through the signing of a Memorandum of Understanding (MoU). This collaboration aims to enhance infrastructure development and foster academic-industry synergies in Sri Lanka.

The MoU was signed by Zhang Wenji, Vice President of the South Asia Division; Ai Shiqiang, Deputy General Manager of the General Management Department; Cao Zhengkun; and Nipun Nupearachchi, Manager of the Human Resources Division from CSCEC (Sri Lanka).

The partnership is expected to facilitate knowledge exchange, promote research initiatives, and contribute to the development of the construction and engineering sectors in Sri Lanka. By leveraging CSCEC’s global expertise and UoP’s academic resources, the collaboration seeks to address the evolving needs of the infrastructure industry and support the nation’s development goals.

This MoU reflects a growing trend of international collaboration in Sri Lanka’s higher education sector, aiming to bridge the gap between academia and industry. Such partnerships are anticipated to provide students with practical exposure and enhance the quality of education, thereby contributing to the country’s socio-economic development.

(Source - Eduwire)

A new benchmark in luxury urban living was introduced on 21 June at Cinnamon Life, with the grand launch of Pentara Residencies — the flagship development by the Home Lands Group. This project represents the largest single investment in a high-rise residential complex undertaken by a Sri Lankan developer.

Strategically located at Thummulla Handiya, one of Colombo’s most coveted and central junctions connecting Colombo 3, 4, 5, and the elite Colombo 7, Pentara Residencies has been positioned as “The Address in Colombo.”

This iconic twin-tower development promises to redefine modern luxury living in the heart of the city.

However, Former UDA Chairman Mr. Kumudulal has filed a police complaint against a recent media report which accused him of illegally approving a major high-rise housing project by Home Lands (Pvt) Ltd in Thummulla, Colombo 05. He claims the report is false and defamatory.

 

However, the media report is based on documented legal submissions to the Court of Appeal and on the UDA’s own internal regulations. It highlights serious alleged violations in the approval process:

Key Alleged Irregularities

• Zoning Rules Violated – The land, officially designated as a special residential zone, was improperly treated as mixed-development to allow the project.
• Height Limit Breach – Approval was given for a 120-metre tower, despite regulations setting a strict maximum of 50 metres.
• Fabricated Façade Width – The building’s façade width was falsified as 40 metres to meet compliance, though the real width is under 30 metres.

Police sources say that while the ex-Chairman has filed a complaint against the media, seventeen complaints from local residents have been filed against him at the Kurunduwatte Police Station — indicating strong public opposition.

The report also alleges that despite being officially removed from office, Mr. Kumudulal is still trying to act as UDA Chairman and has even called for a Board of Management meeting at Water’s Edge next Saturday, believed to be an attempt to retain influence.

The statement praises the role of journalists in defending law, environmental standards, and public rights. It says attempts to threaten or silence the media only prove the existence of wrongdoing.

The civil organisation “MATHRUBHUMI” is now calling on the new Urban Development Minister, Hon. Bimal Ratnayake, to:

 

• Immediately investigate the alleged illegal approval
• Protect media freedom
• Ensure responsible accountability under the law

They further state their commitment to continue exposing corruption despite intimidation, and confirm that they will soon file an official bribery/corruption case against the former Chairman.

Ten bidders have submitted proposals, marking one of the most closely watched tenders in recent years due to the controversies that surrounded earlier awards to supply coal for the 900MW Lakvijaya power plant.

The Lanka Coal Company (LCC) opened Term Tender No. LCC/25/TT/1   recently to procure 1.5 million metric tonnes (±10 percent) of coal for the power plant located at Norochcholai, covering the period December 2025 to May 2026. 

Attention has focused particularly on the participation of Potencia LLC FZ, which entered Sri Lanka’s coal supply chain under unusual circumstances. 

In 2022, the long-term contract had originally been awarded to Black Sand Commodities FZ LLC, a Dubai-registered company later identified as having links to Russia’s coal giant SUEK AG. 

That deal drew intense criticism after the Auditor General and a parliamentary committee found that procurement rules had been breached. 

Allegations included changes to bid documents after submissions, inadequate verification of the winning company’s registration, and questions over whether other bidders were treated equally.

Amid mounting scrutiny, the government suspended the Black Sand contract. However, rather than cancelling it outright, the agreement was novated a legal process by which contractual rights and obligations are transferred to Potencia LLC FZ. 

As a result, Potencia stepped in to handle the remaining consignments, including eight pending shipments from the original schedule and an additional five deliveries that became necessary due to delays in calling a fresh tender.

Potencia also proposed alternate delivery methods, suggesting the use of larger Capesize vessels supported by floating cranes at Puttalam jetty, in place of the standard 60,000-tonne parcels specified in LCC’s tender conditions. 

While this idea has not been formally adopted, it demonstrated the company’s interest in maintaining a long-term role in Sri Lanka’s coal supply.

With the new tender now open, industry analysts point out that Potencia’s entry through novation has placed it in a different category than the other bidders, who have all competed directly under the present process.

Some energy sector observers’ stress that this background should not prejudice the evaluation but underscores the importance of applying clear and uniform procurement standards. 

“What matters most is that every bid is assessed on equal terms,” one former procurement advisor noted, adding that transparency this time is critical for restoring public trust.

Coal still remains a significant contributor to Sri Lanka's energy security, with Lakvijaya supplying nearly 40 percent of national electricity needs.

Through this, the tender being released now is being viewed as something greater than a technical exercise: it is a challenge to see whether the country can put its past conflicts behind it and deliver a competitive, credible, and transparent procurement process.