News

Yugadanavi agreement to Parliament next week

 

  • Lokuge denies energy monopoly
  • Denies Mannar Basin gas exploration given to company

 

BY Pamodi Waravita

Power Minister Gamini Lokuge said yesterday (10) that the controversial agreement between the Government of Sri Lanka and the US-based company New Fortress Energy Inc. will be presented to Parliament next week.

“The proposed framework created a regulatory agreement which would allow New Fortress Energy Inc. to develop the gas supply terminals at Kerawalapitiya for five years. This will not create an energy monopoly,” said Lokuge.

He made this statement in response to a question directed by Samagi Jana Balawegeya (SJB) Parliamentarian S.M. Marikkar to Prime Minister Mahinda Rajapaksa about the agreement and whether the Premier has seen the cabinet paper regarding the matter. Marikkar further questioned why the Prime Minister was refusing to answer his questions on the agreement. 

“Has New Fortress Energy Inc. also been granted the sole right for gas exploration in the Mannar Basin?” questioned Marikkar.

Lokuge however denied this claim.

The People’s Alliance led by Industries Minister Wimal Weerawansa, Energy Minister Udaya Gammanpila, and Water Supply Minister Vasudeva Nanayakkara, held their first press conference on 29 October, where they heavily criticised the agreement that the Government signed with New Fortress Energy Inc. They further claimed that they had not been privy to the cabinet paper regarding the matter and alleged that the proper cabinet procedure had not been followed prior to signing the deal.

Ceylon Electricity Board (CEB) Chairman M.M.C. Ferdinando said last week that the content of the agreement cannot be disclosed due to a condition in the agreement and that the agreement has not even been presented to the CEB yet.

In a press release issued in September 2021, New Fortress Energy Inc. said that it would acquire 40% of the shares of the 310 megawatts (MW) Yugadanavi Power Plant in Colombo and that as part of the agreement, it would also provide about 1.2 million gallons of liquefied natural gas (LNG) to the Government per day through a LNG terminal which will be built off the shores of Colombo.

The Central Bank of Sri Lanka (CBSL) announced on 26 October that the Government is set to receive $ 250 million inflow from the partial divestment of the Yugadanavi Power Plant to New Fortress Energy Inc., and that the first tranche of the same is expected in November and December 2021.

However, allegations levelled against the deal claim that the long-term loss to Sri Lanka through the deal is around $ 6 billion and cite threats to the country’s energy security.

The Janatha Vimukthi Peramuna (JVP) has filed a writ application in the Court of Appeal against the agreement whilst the SJB, Colombo Archbishop His Eminence Malcolm Cardinal Ranjith and Ven. Elle Gunawansa Thera, and the Federation of National Organisations filed fundamental rights (FR) petitions at the Supreme Court regarding the matter.

The CEB Trade Union Alliance held an islandwide protest on 3 November, demanding that the aforementioned agreement be revoked.