Finance Ministry recommends Chinese consortium for second 300 MW LNG plant

Tuesday, 3 July 2018 00:05 - - {{hitsCtrl.values.hits}}

By Chathuri Dissanayake

The Finance Ministry has recommended awarding the Build Operate Own and Transfer (BOOT) tender for the second LNG plant in Kerawalapitiya to Chinese consortium GCL, Winforce and Renewgen, Daily FT learns.

Presenting a Cabinet paper, Minister Mangala Samaraweera has recommended GCL to set up the 300MW plant, outlining a number of reasons for disqualifying the lowest bidder Lakdhanavi Ltd., a fully owned subsidiary of Ceylon Electricity Board. The bid was $ 175 million, which half of engineers estimate to be valued at $ 300 million.

The Cabinet appointed a three-member committee two weeks ago after a number of Ministers protested against the proposal made by the Power and Renewable Energy Minister to award the tender to GCL. The subject Minister Ranjith Siyambalapitiya made the proposal based on the recommendation given by the Procurement Appeal Board, which overturned the decision made by the Cabinet-appointed procurement committee to award the tender to the lowest bidder, Lakdhanavi.

Finding fault with the technical evaluation committee for not exercising due diligence on the financial viability of the bid submitted by the State-owned entity, the note to Cabinet by the Finance Minister said that the bidder is not entitled to any tax exemptions as stated in the bid. Further, Samaraweera said that the bidder should be disqualified on the basis that such assumptions were made when the bid is not supposed to take into account any concessions they may receive.