By Ifham Nizam
The submission of bids for the LNG Second Power Plant Sobedanavi at Kerawalapitiya, has been opened.
The 350 MW power plant to be run on LNG is to be a BOOT – Built Own Operate and Transfer- venture.
More than 15 companies bought bid documents called RFP – Request for Consultant Services Proposal – from various parts of the world, yet only two companies have submitted bids; CNC of China and Lakdanavi from Sri Lanka.
A senior Electrical Engineer told The Island that the Chinese company had not submitted the bid bond. The value of the bid bond was Rs. 600 million or USD 3 million.
“The Chinese company has stated at the bid opening that they submitted a bid without a bid bond as their head office had asked them not to give a bond to the CEB,” a senior official said.
The Chinese government too will not support their company to provide bid bonds to the value of USD three million.
“This could be due to the country’s bad economic situation or not having faith in the system, and, therefore, the Chinese bid has to be rejected,” the official said.
He also stressed that now the Sri Lankan company had to find foreign exchange to build the power plant to help the CEB to meet long term generation plans. The Island learns that the Asian Development Bank was likely to be one of the funding sources.
“This shows there is no trust to invest in the country’s power sector. Usually, IPP – International Power Purchasing – is a preferred business for the energy market,” he said.
While such is the situation, various elements are pushing for investment by New Fortress Energy, USA, which came forward with a backdoor offer to buy 40 percent shares of the Westcoast Power Plant Limited (WCPL) at USD 250 million.
WCPL owns Yugadhanavi HFO –Heavy Fuel Oil- power plant which is 12 years old and will have to hand over to CEB for one USD in 2035.
NFE has sought to supply LNG to WCPL and Sobedanavi as Part of the deal for five years at less than USD10 /MMBtu -Metric Million British Thermal Unit- including FSRU terminal charge. The CEB and the country will save nearly USD one billion over five years by operating above two power plants with LNG, it is claimed by its promoters.
The CEB was planning to have 5000 GWh from LNG based power which is nearly 1/3 of annual energy requirement.
If the 5000 GWh are to be generated from oil HFO and diesel then the country works have an additional cost of nearly Rs. 30 billion annually.
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