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AG, PUSL approvals not yet obtained for Kerawalapitiya

26 Feb 2019

By Maheesha Mudugamuwa The approval from the Attorney General (AG) and the Public Utilities Commission of Sri Lanka (PUCSL) is still pending for the proposed 300 MW LNG power plant in Kerawalapitiya, which was awarded to a Chinese company. Cabinet approval was granted on 12 February to award the tender to set up two 300 MW LNG plants in Kerawalapitiya. The Procurement Appeals Board (PAB) approved of building the Kerawalapitiya 300 MW LNG plant awarding the contract to GCL China Windforce and RenewGen. The second contract will be awarded to Lakdhanavi Ltd. to set up a new 300 MW LNG plant. Even after the tender was awarded to the Chinese company, Lakdhanavi – the lowest bidder of the tender – raised concerns over the awarding of the tender to the Chinese company, which is the second lowest bidder. Ruwan Welagedara of Lanka Transformers Ltd. Staff Union (LTLSU) told The Sunday Morning that due to the awarding of the power project to the Chinese company, without considering the lowest price offered by the local company, the country is set to face a loss of more than Rs. 90,000 million in 20 years. Commenting on Minister Ravi Karunanayake’s statement that there would be no loss for the country by awarding the project to the Chinese company, Welagedara explained: “How can the Minister claim that there is no loss to the people of the country by awarding the tender to the Chinese company? Lakdhanvi’s unit price was Rs. 14.98 against GCL’s unit price of Rs. 15.97. During the bidding time, the dollar was at Rs. 150 whereas now it has risen to Rs. 180, and the price difference has subsequently risen to Rs. 1.21. “This amounts to a loss of Rs. 52,000 million for the operating life of 20 years. The dollar will continue to rise and the average estimated rise in the dollar will be Rs. 323 (between Rs. 202-443) over the next 20 years. Then the total loss incurred is more than Rs. 90,000 million. Hence, the Minister’s claim that there is no loss to the country by awarding the tender to the Chinese company is incorrect.” However, Minister Karunanayake said that the Ministry would take the approval of the AG and the PUCSL in the future, and there would be no changes in the tender under any circumstance. When The Sunday Morning contacted the PUCSL, its Spokesman Jayantha Herath said that the Commission was not officially informed about the awarding of the Kerawalapitiya tender to the Chinese company, and once the official request was sought, the Commission would consider.

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