Supplier slapped with 5 conditions to unload rejected Matarbari coal shipment
No payment for supplier until all conditions met
Highlights
- Supplier to separate foreign materials from coal at own cost
- Water content must be weighted and left from actual weight
- Supplier to pay port overstay fee
- Demurrage for conveyor belt destruction
- Penalty for creating disruption in coal supply and power generation system
The Coal Power Generation Company Bangladesh Limited (CPGCBL) has allowed the unloading of a previously rejected coal shipment for the 1,200MW Matarbari Ultra Super Critical Coal Fired Power Plant, on the condition that the supplier meets five tough requirements following concerns of serious quality compromise.
The decision was taken at a CPGCBL board meeting on 17 May after the supplier agreed to fulfil all conditions. CPGCBL Secretary Kazi Md Mirza Hossain confirmed the decision, saying, "The board has finalised the conditions and directed the supplier to comply fully."
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The coal-laden vessel, the Orient Orchid, flagged under Singapore and carrying around 63,000 tonnes, had remained stranded at the Moheshkhali channel since 17 March, when the 11th consignment was rejected due to excessive contamination with foreign materials including large stones, wood, and mud.
Under the terms set by CPGCBL, the supplier must remove all foreign materials from the coal at their own expense. These materials, once separated, will be weighed and excluded from the total coal weight used for payment calculations.
Secondly, the water content in the coal must also be measured and excluded from the final weight, to ensure payment reflects only the usable coal.
Thirdly, the supplier must pay daily port overstay fees amounting to $10,000 per day, retroactively effective from 21 March.
The fourth condition requires the supplier to bear demurrage costs related to damage caused to the port's conveyor belts during the attempted unloading of the rejected coal.
The final and most stringent condition, according to the Power Division, is a special penalty for creating disruptions in coal supply and electricity generation. The plant had to operate at partial capacity due to the poor-quality coal, leading to notable power generation losses.
This special fine would be calculated later on once the final test report is conducted.
No payment until conditions met
Md Rezaul Karim, chairman of the Bangladesh Power Development Board (BPDB), said the current consignment is filled with big-sized stones and other particles. After the supplier separates all foreign materials, the coal sample will be re-tested in a laboratory.
"If found satisfactory, we will proceed under strict supervision," he told The Business Standard.
CPGCBL, a subsidiary of BPDB, oversees the Matarbari power project. Officials said no payment would be released until all required processes are completed and the cost implications fully assessed.
Coal satisfactory, but excessive foreign materials
The shipment was rejected due to excessive foreign materials, but the supplier claimed it had a calorific value of 4,821 kcal – within the required range of 4,400–5,000 kcal/kg.
The CPGCBL then sent samples to the Department of Materials and Metallurgical Engineering at Buet to assess calorific value and moisture content. The test confirmed that the coal's energy value met contractual specifications.
A Power Division official, speaking on condition of anonymity, said CPGCBL agreed to unload the cargo only after Buet's analysis validated its compliance with energy standards.
The procurement contract also caps ash content at 13%, sulphur at 0.8%, carbon between 38% and 60%, moisture up to 30%, and coal particle sizes between 5mm and 30mm.
Sole supplier under scrutiny
Since November 2024, coal for the Matarbari plant has been supplied by a consortium comprising Unique Cement Industries Limited (concern of Meghna Group) and India's Aditya Birla Global Trading (Singapore).
The consortium has been tasked with delivering 35 lakh tonnes of coal over 12 months from a coal mine in Indonesia owned by Aditya Birla.
The rejection of the 11th shipment raised alarms over the quality control in the coal supply chain and prompted a reassessment of procurement strategy.
The Power Division is now reportedly preparing to invite bids for new suppliers, signalling that the government may no longer rely solely on the Meghna–Aditya Birla consortium.
