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Hambantota refinery

China’s Sinopec only qualified contender among shady qualifiers

31 March 2023 06:36 am - 13     - {{hitsCtrl.values.hits}}


*** How transparent really are they on their latest project in establishing an export-oriented oil refinery in Hambantota

*** At least 4 out of the six remaining companies who have applied have no experience in oil refineries with some even facing serious allegations

Millions of angry consumers were left in a panic this week as Trade Unions attached to the Ceylon Petroleum Corporation stopped distributing fuel to fuels stations opposing the government’s move to privatize the CPC.

Infact queues lined up outside fuel stations in Colombo as soon as the news broke of the Trade Union strike in fear that sheds may run out of fuel. However due to the firmness of the government, the army was deployed at the main petroleum terminals and distribution resumed on Wednesday morning, ending the queues.

While the Power and Energy Ministry has got tough on the Trade Unions and is earning many a praise from a majority of the citizens, how transparent really are they on their latest project in establishing an export oriented oil refinery in Hambantota?

On February 24, 2023 the Ministry of Power and Energy called for Expressions of Interest (EOI) to establish an export oriented petroleum refinery and associated product processing center in Hambantota, on a “Build, Own, and Operate” basis.

The Ministry said the call for EOIs was a result of the Ministry receiving unsolicited proposals from various investors seeking approval from the government and the Board of Investment for a project of this nature.

Meeting the deadline on March 27, 2023 were seven companies which submitted EOIs, Minister of Power and Energy Kanchana Wijesekera said in a tweet.

The companies were Grant & Shearer Ltd, Lagos of Nigeria, China Petroleum & Chemical Corporation (Sinopec) of China, Petrichor Capital Sdn.Bhd of Malaysia, Vitol Group of Singapore, Matin Tejarat Co. of Iran, Harree Management Services (Pvt) Ltd. with Marka Invest, Abu Dhabi from Sri Lanka and the United Arab Emirates. The only Sri Lankan company to have met the deadline was Dandeniya Engineering Sales and Service Syndicate.

Power and Energy Minister Kanchana Wijesekera in a Tweet said the technical evaluation committee and other procurement committees will evaluate EOIs and issue the Request for Proposals (RFP) to suitable applicants.

These companies were required to submit a company profile, annual reports of the last three years, a preliminary project proposal and details of experience in similar projects. They were also required to submit details of expected key investors, consortiums or joint ventures and their contribution and stake in the subject proposal.

The companies would then be shortlisted based on documentary evidence of experience in carrying out similar projects, management expertise demonstrated in the past and the financial capability of the company.

However, since the announcement, allegations have been rife that only one out of the seven companies stand a good chance in competing for the project, with speculation that the project will be awarded to none other than China’s SINOPEC based on the qualification requirements.

Extensive research conducted by the Daily Mirror shows that at least 4 out of the six remaining companies who have applied have no experience in oil refineries with some even facing serious allegations.

This clearly shows that Sinopec is the possible clear contender for the project but EOIs have been called in by interested parties to allegedly make the process look transparent.

A delegation from Sinopec arrived in Sri Lanka mid March and according to a Tweet by the Chinese Embassy in Sri Lanka, the ‘top delegation’ was in Sri Lanka to enhance cooperation and further investment on petroleum and chemicals, trade and port and industrial park operation.

The top Sinopec delegation had also met President Ranil Wickremesinghe and during discussions Wickremesinghe had said the government had taken a principled decision to expand the distribution of fuel and the President also noted that Hambantota had been identified as a primary energy hub.

According to a statement from the President’s Media Division, Sinopec had also pledged to invest in a refinery in Hambantota, during the discussions with the President.

During the discussions, the representatives informed the Sri Lankan Government that their organization had adhered to the existing system and had applied accordingly. They further conveyed their readiness to fully finance the construction of a refinery in Hambantota.

China has always had a ‘winning’ edge with the Sri Lankan politicians when it comes to investments in Sri Lanka especially in strategic locations.

The Hambantota export oriented oil refinery may turn out to be another classic example of this with Sinopec right now being the possible clear contender for the project despite Minister Kanchana Wijesekere’s efforts to make the entire process look transparent. Only time will tell when the companies are shortlisted and selected. (Jamila Husain)

  Comments - 13

  • Tissa Fernando Friday, 31 March 2023 06:47 AM

    From the beginning it was sinopec so the tender was an eye wash. The usual suspects will get millions deposited in Dubai and in Sea Shells.

    Sandy Friday, 31 March 2023 06:59 AM

    Chona or India investment should be welcomed.

    Ranjith Friday, 31 March 2023 07:44 AM

    Well an open expression of interest (EOI) had been called for. Any party was eligible to express their interest in the project. Those shortlisted from the EOI would progress to the detailed tender stage. If Sinopec is the only serious party coming out of the EOI process so be it. May be no other serious major players are are willing to to take a risk with Sri Lanka currently. Also we need to be careful that a lot of misinformation could be propagated by currently disgruntled elements particularly linked to the petroleum industry .

    Demuni Uduwara Friday, 31 March 2023 08:13 AM

    Intentionally forwarded artificial bids paving the way for China to have the refinery tender, freely !

    Rev. Nihal Perera Friday, 31 March 2023 08:41 AM

    so, here is the situ. Kanchana, and his bosses are still engaged in politics of the mid 19 hundreds. At the time hoodwinking people was simple. Today we have IT, and the credibility of statements and deals can be verified with just a swipe of a finger. These so-called leaders should wake up to this fact and stop trying to hoodwink us.

    Jude Friday, 31 March 2023 09:00 AM

    SL politicians well known for crooked deals.

    Jude Friday, 31 March 2023 09:03 AM

    If you're dealing with the government of India, Pakistan or Bangladesh they ask for bribes!! In Sri Lanka You MUST BRIBE YEAH

    Tinpot president and his merry men. Friday, 31 March 2023 09:05 AM

    This shady government would welcome shady contenders with open arms as they both could work together finishing off the country doing shady deals.

    Ela Friday, 31 March 2023 09:35 AM

    This type of thing happens in any international bidding. The govt can choose to proceed with Sinopec while re-calling for EOIs.

    romalli Friday, 31 March 2023 10:09 AM

    Most all tenders in SL can be eyewash.. Even the dumbest of dumb knows. So don't bother wasting any time doing research.... Even this article I find it amusing ... Hahahaha Friday joke

    Quolp Friday, 31 March 2023 12:54 PM

    Well deserved nation for the bid than nasty Indians.

    Gunadasa Friday, 31 March 2023 01:03 PM

    Is Sinopec or any other party come to make a huge investment it should be welcomed. The real issue is whether the building of the refinery will actually happen this time. Since 80s this has been in the news time to time, but no foreign company went ahead with thier initial proposals built the refinery.

    USA, India, and Japan big talkers but not risk taker with us Friday, 31 March 2023 02:24 PM

    Only China is willing to take on risky investment, while USA, Indian and Japan companies dally till 2030 waiting to see what happens. No wonder, China wins so often, as Sri Lankan involved companies will either be corrupt or incapable too, while the earlier mentioned USA, Indian and Japan companies are too scared to come in. And they have good reason too, because government is more afraid of China than any of those joker lots. Who make much noise when easily swayed by talk of friendship (Japan), same blood (India) and help the needy please (USA) and other con man talk. India credit line loan is case in point of no risk to India, with us now having to pay it back ahead of all other loans.

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