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Power and Energy Ministry scoffs at BOI allegations on proposed LNG terminal at Colombo Port
View(s):The Power and Energy Ministry has refuted allegations levelled by the Board of Investment (BOI) over the proposed LNG terminal at the Colombo Port.
The Ministry was responding to a report in the Sunday Times headlined “LNG Terminal: BOI slams moves by Ministry.”
In the article, BOI Chairman Upul Jayasuriya voiced dissatisfaction at the decision by the Ministry to go ahead with plans to set up a Liquefied Natural Gas (LNG) terminal at the Colombo Port. He said several BOI projects for LNG plants and terminals were already in the pipeline and claimed these projects were held up at various stages due to Ministry actions.
Power and Energy Ministry secretary Suren Batagoda in a letter to the Sunday Times insisted that the allegations were baseless and that a decision on any large investment in the power sector has to be taken by the Cabinet Committee on Economic Management (CCEM) and the Ministry in consultation with the Ceylon Electricity Board (CEB) based on the Long Term Generation Plan (LTGP) approved by the Public Utilities Commission of Sri Lanka (PUCSL) under the Electricity Act No.13 of 2013.
The letter further said according to the Electricity Act, procuring of electricity should only be done through competitive tenders. Unsolicited proposals cannot be accepted unless the project is proposed on a Government to Government basis. Moreover, all Power Plant Projects should be included in the CEB Generation Plan and approved by the PUCSL before calling for tenders.
“Therefore, in the power sector, there is no provision for the CEB to accept unsolicited power project proposals approved by the BOI,” Dr. Batagoda said in the letter.
He pointed out that all six investment proposals that the BOI Chairman mentioned as being delayed due to the actions of the Ministry, were unsolicited proposals.
“The BOI should not accept any investment proposals for power projects outside this policy framework. By doing so, the BOI will disappoint investors since the CEB cannot entertain BOI approved power projects by the private sector without going through tender procedures. The Ministry has informed this position to the BOI many times and requested the BOI to encourage BOI investors to participate in the ongoing tender for 300MW Combined Cycle Power Plant in Kerawalapitiya,” the letter said.
It also refuted the BOI Chairman’s claims that the Ministry would be spending a colossal sum of Government money on the LNG terminal The CCEM has directed the Ministry of Petroleum Resources to implement this LNG terminal project on a Government to Government basis through private investment and also as a BOT (Build, Operate, Transfer) project. There is no cost to the Government for initial investment.
The Ministry Secretary also scoffed at warnings by the BOI Chairman that they would “expose” the Ministry and CEB officials if the Ministry went ahead with the said terminal.
“We believe the people of the country expect us to adopt more transparent and competitive procedures than private deals. Therefore, we don’t believe that there is anything to expose about the Ministry and CEB officials to the public on this tender. If the Ministry and CEB officers accept unsolicited proposals approved by the BOI, then of course there can be something to expose.”
Reporter’s Note:
The article was based on allegations levelled by the BOI Chairman. Dr. Batagoda was given an opportunity last week to respond to the BOI’s claims.