Lakdanavi wins Kerawalapitiya 300MW LNG power plant tender
After a string of bureaucratic hullabaloo in tender procedure, the much delayed Kerawalapitiya 300MW Liquified Natural Gas (LNG) power plant bid was recently awarded to Lakdanavi Ltd, the largest independent power producer in the country, a top bureaucrat divulged.
The 18 month impasse in selecting a suitable bidder to build the 300MW Kerewalapitiya LNG Power Plant has ended marking a significant step forward for a new era of LNG power in Sri Lanka, Secretary to the Ministry of Power and Renewable Energy Dr. Suren Batagoda said.
Lakdanavi Ltd, a power plant construction and operation subsidiary of LTL Holdings (Pvt) Ltd, which is a subsidiary of the state-owned Ceylon Electricity Board (CEB), placed the lowest bid, he told the Business Times.
Proposals for this 20 year Build, Own, Operate and Transfer (BOOT) project were opened in April 2017 and it took almost one year to fast track the project due to tender irregularities and political pressure, a senior member of the CEB engineers union said.
The delay has caused a loss of over Rs. 18 billion, he said adding that plans to build the power plant were suspended after detecting certain irregularities in the tender procedure to select the company to construct the plant.
The awarding of the tender had dragged on further owing to certain disagreements in opening the financial bid of Samsung JV Korea Group without considering bids of seven other firms.
The Standing Cabinet Approved Procurement Committee (SCAPC) had opened tenders that pass the technical evaluation of the Tender Evaluation Committee(TEC), in order to ensure transparency in procurement.
In another development, Petronet LNG Ltd, India’s biggest importer of gas, and its Japanese partners have completed a feasibility study for the proposed Liquefied Natural Gas (LNG) Terminal and the Floating Storage Regasification Unit (FSRU), Dr. Batagoda said.
Sri Lanka has signed a tripartite MoU with India and Japan to conduct this feasibility study with the approval of the cabinet.
The Cabinet of Ministers has also authorised Sri Lanka Gas Terminal Ltd to enter into agreements with the Indian and Japanese partners to establish the proposed pubic private partnership.
Sri Lanka Gas Terminal Ltd will hold a 15 per cent stake in this joint venture while 47.5 per cent of the stake will be with the India’s Petronet LNG Ltd.
Some 37.5 per cent shareholding of this venture will be jointly vested in Japan’s Sojitz Corporation and Mitsubishi.
The LNG terminal is to be located within the Colombo Port and pipelines from the port will transport the gas to two dual-fuel power plants in Kerawalapitiya expected to be completed around 2021.
Petronet LNG Ltd. will finalise negotiations with Sri Lankan authorities to build the country’s first liquified natural gas terminal project in Colombo and expects to receive commercial clearance by August this year.
The project capacity of the floating LNG receipt facility off the island’s western coast, is 2.6-2.7 million tonnes per year and would cost around US $350 million.