Laxapana project goes to German firm

By Malik Gunatilleke

The overhauling and upgrading of the Old Laxapana power station, in Hatton, has been entrusted to German firm Voith Siemens (VS), on the recommendation of the Ceylon Electricity Board (CEB). The decision to award the contract to Voith Siemens comes despite the Technical Evaluation Committee (TEC) pointing out that the German company’s quotation was 64 percent greater than the TEC’s estimated cost of the project.

Voith Siemens’s initial quotation was Euro 28 million, and TEC’s estimate was between Euro 17 and 18 million. On TEC’s urging for a discount, the government requested a revised estimate, and Voith Siemens came up with the revised figure of Euro 25 million, Euro 3 million less than its first quotation.
Power and Energy Ministry Secretary M. M. C. Ferdinando told The Sunday Times that it would be best if the government clinched the deal with Voith Siemens, rather than further delay work at Old Laxapana.

Mr. Ferdinando said that calling for international tenders in order to find a lower bidder would only delay the project. He added that the loan scheme proposed by the German government-controlled KfW Bankengruppe, which is funding Voith Siemens, has “very attractive” terms that would benefit both the Sri Lanka government and the CEB.

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