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Message: <blockquote data-quote="Hyaenidae" data-source="post: 31203572" data-attributes="member: 530392"><h3>How the "Double Penalty" Works</h3>The "Double Penalty" system is a specific contractual mechanism used by the Lanka Coal Company (LCC) to handle shipments that fall below the technical requirements but cannot be physically sent back.Since the Norochcholai jetty is not designed for reloading (it’s a one-way conveyor system), once the coal is offloaded, the government is essentially stuck with it. The Double Penalty acts as a financial deterrent and compensation for the loss in efficiency.In a standard coal contract, if the heat value is lower than specified, the price is adjusted. However, a Double Penalty goes beyond a simple 1:1 price reduction:<ol> <li data-xf-list-type="ol">The Benchmark: The contract specifies a Gross Calorific Value (GCV) of 5,900 kcal/kg.</li> <li data-xf-list-type="ol">The Threshold: There is usually a "rejection limit" (often around 5,750 or 5,800 kcal/kg). If the coal falls below this, the "Double Penalty" kicks in.</li> <li data-xf-list-type="ol">The Math: Instead of just paying 5% less for coal that has 5% less heat, the penalty doubles the deduction. For every unit of heat missing below the limit, the supplier is docked twice the value of that missing energy.</li> <li data-xf-list-type="ol">The "80% Withholding": In the 2025/2026 Trident Chemphar case, the government reportedly withheld 80% of the payment for the first shipment until independent tests in India confirmed the exact heat value to calculate these penalties.</li> </ol>2nd lab test ekenuth calorific value eka adui kiyala kiwwoth penalty ekakuth wadinawa supplierta.</blockquote>

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