The decision taken by the loss-making Ceylon Electricity Board (CEB) to award a special project to Lakdhanavi seems like a sop to keep it silent, sources at CEB said.
Lakdhanavi Limited, the lowest bidder, was awarded the contract to build a 300MW LNG power plant for 2020. Later, the contract was awarded to a higher bidder; Chinese Led Consortium (GCL).
Power, Energy and Business Development Minister Ravi Karunanayake recently recommended the awarding of the new ‘special project’ to Lakdhanavi outside the tender at Rs.14.98/unit based on a bid, sources said.
“The question is if Lakdhanavi’s bid was good enough to be awarded the ‘special project,’ why was it not awarded the power plant project in the first place without going for a more expensive option? When asked about this at the press conference, a hapless Secretary to the Power Ministry, Dr. Batagoda said CEB needed two power plants and that they decided to get its subsidiary to do one too. It however looked more a sop to Lakdhanavi to keep silent,” they said.
They said Lakdhanavi maintained referral to the Procurement Appeal Board (PAB) was never mentioned in the tender document and was contrary to the law.
Based on a paper submitted by Minister Karunanayake, the Cabinet has now approved the tender to be awarded to GCL at Rs.15.97/unit based on PAB decision.
“The intrigue doesn’t end there. Although the Cabinet paper mentions the tariff to be included in the PPA with GCL Consortium is in Annexure 10, in a startling revelation, informed sources say the very page carrying the all important tariff calculation in the Consortium’s Financial Template has been omitted. Doubts have arisen on the intention of this omission. Was there a move to insert the relevant pages later with a higher tariff than subjected to evaluation or was it a genuine oversight by the officials of the ministry?” they questioned.
“The National Electricity Act says the regulator has to ensure that generation is done at least cost. Now we have a situation; the land earmarked for one project being split in to two and identical power plants coming up at the same time. However, one will be more expensive than the other since the cheaper one was rejected by PAB. Does that argument make any sense to you? The Electricity Tariff in Sri Lanka is said to be one of the highest in the region. CEB is said to incur huge losses. No wonder we have that situation when we have such nonsensical procurement decisions being made and getting the nod of the politicians as well,” CEB sources said.
- Tender to be awarded to GCL at Rs.15.97/unit based on PAB decision
- Regulator should ensure generation is done at least cost