Stakeholders perturbed over delay in awarding bid for proposed Kerawalapitiya - II power project

Energy sector stakeholders last week expressed concern over the inordinate delay in awarding the bid for the proposed multi-billion rupee 300MW Kerawalapitiya - II Power Plant.

Proposals were opened in April 2017 and though eight months have lapsed, there is still no forward movement, they said. "The fast track project has become an off track one, and the delay has already resulted in a loss of Rs. 12.4 billion".

Earlier, fears were expressed that the proposed power project was to be awarded to a foreign company, which could have translated into a loss of a staggering Rs. 204 billion as bidders offering more competitive tariffs were apparently sidelined.

The matter was brought to the notice of the President and the Prime Minister, they said, as, if the bid was pushed through, the loss would have been much bigger than the bond scam.

Senior CEB engineers also expressed their reservations about awarding the bid to the Korean company as the margin between the lowest and second lowest bidders worked out to a stupendous Rs. 34 billion, they said

However, the foreign party concerned was disqualified due to non-submission of signed documents of the financial bid, but some high-powered government officials continue to drag the process without awarding the contract to the bidder who offered the lowest tariff for the combined cycle power plant, industry officials claimed.

The dragging of feet on this critically important power project has led to apprehensions that procuring emergency power at steep prices is being promoted, they said.

The Public Utilities Commission of Sri Lanka (PUCSL) has taken up the position that delaying this essential power plant will costs the country Rs. 1.55 billion per month, when compared to the high cost, short term emergency power plants required to bridge the gap. 

The 300 MW Kerawalapitiya–II tender was floated by the Ceylon Electricity Board (CEB) as a fast track power plant by squeezing the time spans required for each aspect of the project. 

Meanwhile, CEB’s General Manager says that PUCSL’s calculation of the delay due to the proposed 300MW Kerawalapitiya LNG power plant is a 1300% overestimate.

According to CEB calculations, the estimated financial losses should be 2 billion and not 28 billion as stated in the PUCSL report. The CEB clarified that the PUCSL, in its estimation, considered the power plant to operate on Liquid Natural Gas (LNG) from 2019 whereas the plant is to be partially operated on oil in 2019 due to lack of availability of LNG supply infrastructure by then.

Title; ENERGY/14

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