Yugadanavi deal beneficial despite shady signing: Janaka Ratnayake

  • PUCSL Chairman says share sale gives best value for Govt.
  • However, slams manner in which agreement was signed

BY Pamodi Waravita

Public Utilities Commission of Sri Lanka (PUCSL) Chairman Janaka Ratnayake yesterday (4) said that while he disapproves of the “shady manner” in which the agreement between the Government of Sri Lanka (GoSL) and US-based energy company New Fortress Energy Inc. concerning the Yugadanavi Power Station in Kerawalapitiya was signed, he believes the sale of shares would ultimately benefit Sri Lanka.

“The PUCSL plays no politics because, as the electricity sector regulator, we look at the interests of all stakeholders alike. Personally, with my business acumen, this sale of the shares in Yugadanavi is very fair and is the best value for the Government. However, I don’t agree with the way the deal was struck,” Ratnayake told The Morning yesterday.

He added that the agreement would help in utilising the liquefied natural gas (LNG) power plant in Kerawalapitiya properly, which could not be done in the past decade.

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

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 Samagi Jana Balawegeya (SJB), Archbishop of Colombo His Eminence Malcolm Cardinal Ranjith, Ven. Elle Gunawansa Thera, and the Federation of National Organisations have filed fundamental rights (FR) petitions at the Supreme Court regarding the matter.

The People’s Alliance led by Minister of Industries Wimal Weerawansa, Minister of Energy Udaya Gammanpila, and Minister of Water Supply Vasudeva Nanayakkara held a press conference on 29 October, where they heavily criticised the agreement the Government signed with New Fortress Energy Inc.

The Ceylon Electricity Board (CEB) Trade Union Alliance held an islandwide protest on Wednesday (3), demanding that the aforementioned agreement be revoked. However, the CEB on the same day claimed that New Fortress Energy Inc. will not be able to monopolise the supply of LNG, as a state corporation will be involved in the importation and distribution of LNG.

The Ministry of Power, meanwhile, said that a tender process need not always be followed when finalising such agreements.

CEB Chairman M.M.C. Ferdinando further said 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.

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