Fresh bid for new coal supplier for Matarbari power plant in the offing

Power Division is preparing to launch a fresh bid for new coal supplier for the Matarbari 1,200MW Ultra Super Critical Coal-Fired Power Plant following the detection of substandard coal supplied by a consortium of Bangladesh's Meghna Group's Unique Cement Industries Limited and Aditya Birla Global Trading (Singapore) Pte Ltd of India.

To this effect, a joint committee comprising members from Coal Power Generation Company Bangladesh Limited, the PDB and power division was formed and tasked to hear the version of the coal supplier as they stand accused of delivering substandard coal and take necessary preparation to launch a fresh bid for a new coal supplier.

The committee will also look into the issue of future supplies as well as the already supplied coal by the current supplier.

The decision to launch fresh bidding for a new coal supplier came in the face of detecting soil-contaminated coal brought by the supplier on 17 March which was the 11th shipment and subsequently rejected by the Coal Power Generation Company.

The consortium has been supplying coal to Matarbari power plant since November 2024 from a coal mine owned by Aditya Birla in Indonesia. 

Coal Power Generation raised questions with the suppliers about the quality of the coal more than a dozen times. It said the use of low quality coal is creating operational inefficiencies in the power plant.

"A joint committee was formed to look into the issue of Matarbari coal supplier. After hearing the version of the supplier, we will make the final decision about this supplier and preparation is underway to launch a fresh bid for a new supplier of coal for Matarbari power plant," Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan said yesterday.

Earlier, the Power Division formed a three member probe body which gave three recommendations including conducting tests of coal at the unloading site which was not mentioned in the supply deal. The other two recommendations were visiting the coal mine in Indonesia to ensure if the supplier is delivering coal from the mine mentioned in the deal and conducting a test of the previously supplied coal.

"We have set a few new mechanisms to ensure the standard of the coal which was not mentioned in the deal. We are waiting for the test report and a decision would be taken on the basis of the report," Power Division Secretary Farzana Mamtaz earlier told TBS.

"We have raised the issue of low quality coal deliveries with the suppliers in formal and informal communications but they are not paying heed," said Nazmul Haque, managing director of the Coal Power Generation Company.

"If the coal supply is disrupted by low standard coal, the smooth operation of this power plant will be at stake since we just have one supplier," he added.

According to the coal procurement tender document, the gross calorific value of the coal should be 4,400-5,000 kcal/kg. The higher the calorific value, the more efficient the coal is. In this aspect, the Matarbari's required coal has mid-range calorific value.

Other specifications include: ash content should be 13%, sulphur 0.8%, carbon content 38% -60%, moisture content 30% and the size of the coal should be 5mm to 30mm maximum.

Claiming that the supplier's coal does not appear to meet the specified standard, Coal Power Generation withheld 10% payment of the earlier all 10 shipments.

Depayan Paul, superintendent engineer (procurement) told the TBS, "We are suspicious about the quality of the coal, which is why we withheld 10% payment for all the 10 earlier shipments."

The 11th shipment of coal was rejected for excessive foreign materials but the supplier claimed that that coal has a calorific value of 4,821 kcal.

But this coal supply was mixed with stone, mud, reddish particles and excessive water. As a result the Chittagong Port Authority failed to unload the coal as the conveyor belt used to unload coal from ships frequently got stuck and broken.

Chief engineer of Matarbari power plant, Saifur Rahman said,"We find the supplier's claim of 4,821 Kcal as absurd. We are now waiting for the lab report."

When Tarun Maru, Sales and Marketing Specialist of Aditya Birla Global Trading was asked why substandard coal was delivered to Matarbari power plant, he declined to comment saying, "I don't have any comment on this matter."

Coal Power Generation signed a deal with the consortium last year to import 35 lakh tonnes of coal to feed the Matarbari power plant for 12 months from November 2024.

The consortium so far supplied 6.50 lakh tonnes of coal.

What experts say about substandard coal

Coal Power Generation and sector experts said that burning substandard coal with excessive ash, moisture and high sulfur contents could potentially damage the boiler that burns coal to generate electricity.

Buet professor Dr M Tamim said, "This substandard coal should be rejected for the greater cause of the power plant.

"We don't know what kinds of foreign materials are in this coal and without testing, using this type of coal is very risky. Because of contaminated coal in the Barapukuria Power plant, the boiler got damaged severely."

"Matarbari authorities should follow strict criteria in using coal to save the power plant from future damage," Dr M Tamim concluded.