LAUGFS Hambantota Terminal issue in limbo
Despite numerous discussions with the country’s topmost officials, the issue on LAUGFS LPG import and export terminal remains unresolved.
LAUGFS Holdings Chairman W.H.K. Wegapitiya told the Business Times that on Friday he met with President Maithripala Sirisena and earlier in the week he had met with Prime Minister Ranil Wickremesinghe and all the officials downwards but so far ‘nothing has happened’. Laugfs Terminals Ltd (LTL) is constructing a US$ 80 million LPG terminal in Hambantota Port which was ‘verbally’ directed to be halted by the Sri Lanka Ports Authority (SLPA).
The SLPA had written to the company mid last year saying that according to the agreement between SLPA and China Merchants Port Holdings Company who are the majority stakeholders in the Hambantota Port, there’s a condition precedence that requires the SLPA to transfer, novate or assign agreements between LAUGFS and SLPA to China Merchants Port Holdings Company.
“When we started this terminal, we signed a lease and business agreement with SLPA. The China Merchants Port Holdings Company’s agreement with the SLPA has 27 condition precedences that SLPA had to fulfill. In these, there are two precedences pertaining to the LAUGFS lease and business agreements. When SLPA wrote to us on this, we wrote back requesting the SLPA to disclose their agreement with China Merchants Port Holdings Company to us as we too need to understand it,” Mr. Wegapitiya explained. He said that following this exchange the SLPA Chairman Parakrama Dissanayake had summoned him and other LAUGFS officials to SLPA in August last year and had requested them to novate and assign their two agreements.
Mr. Wegapitiya had wanted to peruse the agreement between SLPA and China Merchants Port Holdings Company but Mr. Dissanayake had declined to show the agreement. “We returned and went about construction and about a week ago an officer-in-charge at the SLPA had verbally informed them to stop building the pipeline that connects the import and export terminal to the main pier.”
He said that a few days ago the Board of Investment (BOI) had mediated but nothing concrete happened. “Currently LTL has been assured by the BOI and relevant ministry concerned that this matter will be resolved shortly through their intervention,” LAUGFS said in filing to the Colombo Stock Exchange on Thursday.
“Only after the meetings with the BOI did I meet with the President and the PM.” Mr. Wegapitiya was critical of the way local industrialists are treated. “”Now the SLPA says that we don’t have a right to the lease agreement with the SLPA which is incredulous.”
Last December the formal handover of the strategic port of Hambantota to China Merchants Port Holdings Company which will take control of the facility on a 99-year lease was completed.
SLPA officials for not immediately available for comment.