News
GoSL-New Fortress agreement: Engineers frown on modus operandi, gas supply contract
By Ifham Nizam
The government had done the right thing when it came to attracting investment into the energy sector, but the methodology it adopted was questionable, especially in signing such an important deal so hastily at midnight, senior independent engineers said.
They told The Island that with regard to New Fortress (NF) buying shares in Yugadhanavi it boiled down to a foreign direct investment at a time the country badly needed foreign exchange.
The government has signed a share sales agreement with NF to sell 40% of shares held by GOSL in Yugadhanavi power plant for USD 250 million, which is in line with the government Chief Valuer’s valuation as stated by GOSL.
“After all, the investor has to take his return through dividends from operations over 15 years and convert it to repatriate. Dividend declaration would be decided by the majority of shareholders and depend on availability of cash. When considering Sri Lanka’s current rating (C grade) this single investment of USD 250 million is a substantial contribution in terms of boosting foreign reserves and builds confidence in other investors,” a senior engineer said.
With NFE’s investment in the Floating Storage Regasification Unit (FSRU) terminal, overall foreign exchange inflow would be nearly USD 300 million.
A senior engineer at the Kerawalapitiya Plant said that CEB’s concern should be the gas price which would have a direct impact on its operations.
The senior engineer expressed concern about allowing FSRU terminal project to NF while a tender called by the CEB for the FSRU was being evaluated.
“Sri Lankan government being able to sell 40% for a 10-year-old heavy fuel oil (HFO) fired power plant for USD 250 million was a good deal but the problem is that it was linked to the gas supply, the top engineer said.
As far the West Coast Power Ltd., the owner of Yugadhanavi power plant, GOSL has 50%, EPF has 27% and LECO has 18.2% and Lakdhanavi has 4.8%.
A senior engineers said, ” The value of 250 USD for 40% is a good price on an assets base and future income based. The CEB will pay all future capacity charges in Sri Lankan rupees. There will be no change in capacity or fixed charges because a foreign investor is coming in. PPA and IA do not prevent change of shareholders. Similar changes in shareholding happens in the AES power plant, which is now owned by Sojitz Japan.
With the sale of shares the GOSL has allowed NF to supply Natural gas to Yugadanavi and the new power plant to be constructed. This could be a concern for the CEB.
Yugadhanavi now operates with Low Sulfur HFO, which is an imported product supplied through CPC; it is more expensive than normal HFO. However, at present, CPC refines and supplies low sulfur HFO.
When Yugadanavi operates on natural gas, the power capacity can be increased by 10% and fuel efficiency will be better. Therefore the overall tariff to the CEB will be lower than operating with HFO.
The new power plant to be built by NFcan run on natural gas or diesel only.
The issue may be how a US company has been selected to buy shares and supply gas. Selling shares is GOSL’s prerogative, which other shareholders or the CEB cannot challenge.
News
Ex-SriLankan CEO’s death: Controversy surrounds execution of bail bond
Prof. Prathibha Mahanamahewa has emphasised the need to examine the circumstances under which the court staff executed the bail bond, and the release process, in respect of the late Kapila Chandrasena, former Chief Executive Officer of SriLankan Airlines.
Chandrasena’s body was found in a house at Pedris Road, Colombo 03.
In case of any doubt regarding bail condition/s or any other matter (insufficient surety, identity issues, suspicious documents and unclear order), the Registrar had to get in touch with the relevant Magistrate, Mahanamahewa said.
Mahanamahewa was responding to The Island query regarding the acceptance of two Muslims as sureties. Had they followed the time-tested procedure, court registry/registrar staff would never have accepted sureties as blood relatives of Chandrasena, Mahanamahewa said, alleging a major defect in the execution of the bail bond.
They were arrested by police and remanded by the Colombo Magistrate’s court, till 13 May, pending further investigations.
Colombo Chief Magistrate Asanga S. Bodharagama, on 5 May, granted to Chandrasena cash bail of Rs. 500,000 and three surety bails of Rs. 10 million each. But soon after Chandrasena received bail, the court was told that two of the Rs. 10 million sureties had been produced, after payment of Rs. 15,000 each, were made to those two individuals to act as guarantors.
The bail application had been submitted by Rienzie Arsecularatne, PC, appearing on behalf of Kapila Chandrasena, when the case was earlier taken up, on 28 April.
Police also arrested an elderly person who arranged for the two persons who hadn’t even seen Chandrasena, even once, to offer themselves as sureties.
As soon as the police revealed the fraudulent manner Chandrasena obtained bail, Chief Magistrate Bodharagama issued an order to arrest and produce him before the court. This order was issued consequent to a request made by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), on the grounds that the defendant had violated bail conditions. The CIABOC wanted Chandrasena held pending the conclusion of the case.
Sources familiar with the execution of bail bond said that the moment the suspects had submitted their National Identity Cards and letters from Grama Sevakas, the court registry/registrar staff should have rejected them. In a such high-profile case, the failure on the part of the lawyers, representing Chandrasena, to check the gsureties’ relationship with Chandrasena, was another glaring shortcoming, sources said, pointing out that after having submitted bail application on 28 April, the defence team should have come prepared to put forward genuine guarantors.
The Island contacted the Bar Association of Sri Lanka for comment on the manner in which the court staff had handled bail for Chandrasena, but there was no response.
Sri Lanka’s former Ambassador to Moscow, accredited to Kiev, Udayanga Weeratunga, said that a thorough investigation should be conducted to ascertain facts about the execution of the bail bond. Asked whether he had been in touch with Chandrasena, Weeratunga said that he spent his first day at Welikada with Chandrasena and Ranjan Ramanayake in one cell. “That happened on 14 February, 2020. I was arrested when I returned to the country, from the UAE, and produced before the then Magistrate Ranga Dissanayake, the incumbent Director General of CIABOC,” Weeratunga said.
Weeratunga said that a couple of months after the change of government in 2024, the US State Department imposed a travel ban on him and Chandrasena and their families over what the US termed as significant corruption.
Weeratunga said that altogether the US designated 14 persons and, of them, two were Sri Lankan, who happened to be him and Chandrasena, accused of corruption in respect of acquisition of MiG 27s from Ukraine and the Airbus deal, during President Mahinda Rajapaksa’s tenure as the President.
SLPP sources said that Chandrasena’s demise shouldn’t prevent proper investigation on his affidavit that claimed pressure brought on him to name Mahinda Rajapaksa as a recipient of the Airbus bribe.
By Shamindra Ferdinando
News
Law applies to all, regardless of power or influence – Prez
President Anura Kumara Dissanayake emphasised yesterday (12) that the law would be enforced equally and no one was allowed to be above the law.
Addressing the Matale District Coordinating Committee meeting, at the Matale District Secretariat, President Dissanayake said, “Do not be afraid to work, but be afraid to engage in irregularities. Everyone must first be subject to the law and secondly, must fear the law. This applies to everyone, from the President down to the Grama Niladhari.”
“If we are to usher in a new era, we must submit to the rule of law. No one can be above it, he said, adding that previous Presidents had even violated the Constitution with impunity.
The President said that if there were any instances of selective law enforcement, they should be brought to his attention for action. Everyone was required to cooperate, if called upon to make statements in an investigation, he said.
By S.K. Samaranayake
News
Sri Lanka and Belarus to sign several MoUs
Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, is on an official visit to Belarus, from yesterday to Friday (15), on the invitation of the Foreign Minister of the Republic of Belarus, Maxim Ryzhenkov.
The text of the Foreign Ministry release: “This visit will mark a milestone in the bilateral partnership as the two countries commemorated the 25th Anniversary of the establishment of Diplomatic Relations last year.
During his visit to Minsk, Minister Herath will call on Belarus President Alexander Lukashenko and will hold bilateral discussions with the Minister of Foreign Affairs of Belarus. Minister Herath is also scheduled to meet the Belarus Ministers of Education and Health. Several MoUs and agreements across sectors are envisaged to be signed with the Republic of Belarus during the visit.
In Minsk, Minister Herath will address a business and tourism roundtable, organised by the National Export Centre of Belarus. He is also scheduled to meet Sri Lankan students studying in Belarus.”
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