A United States-based energy company’s bid to link its proposal to purchase 23.9 percent shares of the Kerawalapitiya West Coast Power plant with projects to build a Floating Storage Regasification Unit (FSRU) and pipelines has run into a storm. Amid opposition from the powerful Ceylon Electricity Board Engineers Union (CEBEU), President Gotabaya Rajapaksa has ordered [...]

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US firm’s bid to purchase power plant shares: President defers decision amid CEBEU protest

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A United States-based energy company’s bid to link its proposal to purchase 23.9 percent shares of the Kerawalapitiya West Coast Power plant with projects to build a Floating Storage Regasification Unit (FSRU) and pipelines has run into a storm.

Amid opposition from the powerful Ceylon Electricity Board Engineers Union (CEBEU), President Gotabaya Rajapaksa has ordered that the decision be deferred till June 18 for a Treasury-appointed expert committee to go through the proposal and make recommendations.

The committee, comprising senior officials from the Treasury, the Power and Energy Ministry, the Ceylon Electricity Board (CEB) and the Kerawalapitiya West Coast Power Plant, was required to give its report by June 10.

The committee will look into the unsolicited proposal put forward by the US-based New Fortress Energy (NFE), which wants to buy the 23.9 percent shares the Employees Provident Fund (EPF) holds in the 300 MW state-run diesel power plant.

The proposal has hit a snag as the Ceylon Electricity Board has, meanwhile, called for international bids for the construction of an FSRU to supply LNG (liquefied natural gas) to the Kerawalapitiya plant, the three power plants at Kelanitissa and other LNG-based power plants to be set up in the future.

The bids will close on 18 June.

The Sunday Times reliably learns that the committee held its first meeting on May 19 and the second on May 21, but the CEB representatives did not attend the meetings in what was seen as a protest against the move to consider the US company’s proposal.

A senior Treasury official said NFE was willing to buy 23.9 percent of the shares in the Kerawalapitiya Plant, only if it was given the opportunity to construct an FSRU that would cater to the LNG needs of the present and future power plants of the country.

With the CEB engineers’ union sending a letter to Power Minister Dallas Alahapperuma, expressing its opposition to the NFE proposal, President Rajapaksa ordered that the decision be put off till June 18.

In its May 2 edition, the Sunday Times revealed that the CEBEU would object to the proposal.

Another area of contention is the building of the pipeline to carry LNG from the offshore FSTU – to be located 10 km off the coast — to the power plant.

The American company has proposed that it should be in control of the pipeline, but CEB engineers insist that it should be built and maintained by the Ceylon Petroleum Corporation. They say it is strategically important and beneficial to the country that the FSRU, the pipeline system and the gas supplies remain in separate hands.

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