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GoSL-New Fortress agreement: Engineers frown on modus operandi, gas supply contract

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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.



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Prelates launch legal battle against New Fortress

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by A. J. A. Abeynayake

Archbishop of Colombo Malcolm Cardinal Ranjith and Ven. Elle Gunawansa Thera yesterday filed a fundamental rights petition before the Supreme Court against the transfer of shares of the Yugadanavi LNG Power Plant in Kerawalapitiya to a US energy firm.

The petition seeks an order preventing the US firm New Fortress Inc. from obtaining the LNG supply contract.

Prime Minister Mahinda Rajapaksa, other members of the Cabinet, West Coast Power Limited, the owner of the 310 MW Yugadanavi Power Plant, the US-based company New Fortress Energy and the Attorney General are among the 54 respondents named in the FR petition.

The petition requests the court to issue an order to nullify the Cabinet decision on transferring state-owned shares of the Yugadanavi power plant to the US company.

The petition states that the decision taken by the Cabinet of Ministers to transfer 40% stake in the company owning the Yugadanavi Power Plant to the US firm in question was not justified. It also says the Cabinet failed to focus on issues such as the national economy and national security before taking the relevant decisions.

The petitioners have requested the Court to declare that their fundamental rights as well as the rights of the entire citizenry and their future generations guaranteed to them under Article 12(1) of the Constitution have been infringed and/or are continuing to be infringed and/or are in imminent danger of being infringed by the actions of the Respondents with regard to the Yugadanavi deal.

They have requested the Court to quash the decision of the Cabinet authorising the procurement of LNG from the 53rd respondent – the New Fortress Energy.

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Financial crisis so acute teachers’ demands cannot be met – SLPP Chairman

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300,000 entering schools for first time this year among those victimised

By Shamindra Ferdinando

SLPP Chairman and Foreign Minister Prof. G.L. Peiris yesterday (18) emphasised that the worsening financial crisis experienced by the country was so acute the government wasn’t in a position to grant the salary increase sought by school principals and teachers.

Prof. Peiris, who served as the Education Minister till August this year said that the public realised the government lacked the wherewithal to meet the striking teachers’ demands. The academic said so at the weekly SLPP media briefing at the party office in Battaramulla.

Responding to media queries, Prof. Peiris stressed that the government expected the striking teachers to facilitate re-opening of schools on a staggered basis beginning Oct 21 (Thursday). The Minister indicated that striking unions shouldn’t expect to settle the salary issue on their terms as the government lacked the means even if it wanted to do so.

Referring to the rapid deterioration of public finances in the wake of Covid-19 eruption in early 2020, Prof. Peiris said that Budget 2022 was presented amidst an extremely difficult time.

The top SLPP spokesperson reiterated the government’s commitment to grant strikers’ demand in two stages as announced by Prime Minister Mahinda Rajapaksa at a meeting with striking unions at Temple Trees. Premier Rajapaksa on Oct 12 told a delegation of striking unions that the government would pay one third of the increase through the Budget 2022 and the remaining two in the following year’s budget.

The Premier’s Office quoted him as having told the delegates that the sharp drop in government income deprived the administration of an opportunity to grant the increase. Striking unions want the government to settle the issues immediately in one go.

Prof. Peiris appealed to those who have been on strike for 100 days to resume teaching. The student community really suffered due to the Covid 19 eruption and further delay in resuming studies would be catastrophic, Prof. Peiris said, underscoring the importance of restoring normalcy as about 300,000 would go to schools for the first time in their life.

Prof. Peiris said that schools that conduct classes from Grade 1 to 5 and those with less than 200 students would be re-opened on Oct 21. According to the minister, approximately 3,800 schools would be re-opened as scheduled.

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Lankan authorities must end violence and discrimination against Muslims, says AI

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Kyle Ward, AI’s Deputy Secretary General

The Lankan Muslim community has suffered consistent discrimination, harassment and violence, since 2013, culminating in the adoption of government policies explicitly targeting the minority group, said Amnesty International, in a new report published yesterday.

The report titled From Burning Houses to Burning Bodies: Anti-Muslim Harassment, Discrimination and Violence in Sri Lanka, traces the development of anti-Muslim sentiment in Sri Lanka since 2013 amid surging Sinhala-Buddhist nationalism. This discrimination has evolved from a rising series of mob attacks committed with impunity, into government policies explicitly discriminating against Muslims, including the forced cremation of Muslim Covid-19 victims and current proposals to ban both the niqab (face veil) and madrasas (religious schools).

“While anti-Muslim sentiment in Sri Lanka is nothing new, the situation has regressed sharply in recent years. Incidents of violence against Muslims, committed with the tacit approval of the authorities, have occurred with alarming frequency. This has been accompanied by the adoption by the current government of rhetoric and policies that have been openly hostile to Muslims,” said Kyle Ward, Amnesty International’s Deputy Secretary General.

“The Sri Lankan authorities must break this alarming trend and uphold their duty to protect Muslims from further attacks, hold perpetrators accountable and end the use of government policies to target, harass and discriminate against the Muslim community.”

Incidents of violence towards Muslims have risen in frequency and intensity since 2013, with a series of flashpoints in which attackers and those responsible for hate speech have enjoyed impunity for their actions.

This escalating hostility began with the anti-halal campaign of that year, when Sinhala Buddhist nationalist groups successfully lobbied to end the halal certification of food, which demarks food permissible for consumption by Muslims, in accordance with Islamic scripture and customs. The campaign gave rise to a number of attacks on mosques and Muslim businesses, with the lack of accountability for those responsible acting as a signal to others that acts of violence against Muslims could be committed with impunity.

The following year, anti-Muslim riots in the southern coastal town of Aluthgama began after a Sinhala Buddhist nationalist group held a rally in the town. Here too, perpetrators of violence enjoyed impunity and authorities failed to deliver justice to victims.

Despite a new government in 2015, which promised justice and accountability for ethnic and religious minorities, attacks against Muslims continued to occur. Shortly after the election, anti-Muslim mob violence flared in the southern coastal town of Ginthota in 2017, while similar violence was seen in 2018 in Digana and Ampara, towns in the central and eastern provinces respectively. Not only did the perpetrators escape accountability, victims and witnesses alleged the police and armed forces did not offer sufficient protection or act to prevent the violence.

Hostility towards Muslims increased markedly after more than 250 people were killed in coordinated suicide attacks committed by a local Islamist group and claimed by the Islamic State on Easter Sunday 2019.

Following these attacks, on 13 May 2019, Muslims in several towns in the North-Western Province of Sri Lanka came under attack during Ramadan, one of the holiest months in the Muslim calendar. Mosques across the country were also attacked and a spate of ‘hate speech’ posts and anti-Muslim vitriol was seen on social media. Emergency regulations rushed through by the authorities were also used to arbitrarily arrest hundreds of Muslims in the wake of the attacks.

Since taking office, the current government has continued to target and scapegoat the Muslim population to distract from political and economic issues.

This was evident in the mandatory cremation policy on the disposal of the bodies of Covid-19 victims, which was implemented despite cremation being expressly forbidden in Islam, and a lack of scientific evidence to substantiate the claims that burying victims would further the spread of the disease.

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