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
Swiss ambassador meets President Dissanayake
Dr. (Ms.) Siri Walt, Ambassador Extraordinary and Plenipotentiary of Switzerland to Sri Lanka, met President Anura Kumara Dissanayake at the Presidential Secretariat this morning (09).
During the meeting, Ambassador Walt extended her congratulations to President Dissanayake on his recent election victory, conveying best wishes on behalf of the Government and people of Switzerland.
Ambassador Walt reaffirmed Switzerland’s commitment to supporting Sri Lanka, particularly through the ongoing IMF program, and expressed Switzerland’s readiness to assist in President Dissanayake’s efforts to combat corruption. She also emphasized Switzerland’s expertise in foreign direct investments (FDI) and tourism, offering assistance to Sri Lanka in these sectors to promote economic growth.
Further areas of collaboration discussed included constitutional reforms and labour migration, with Ambassador
Business
President discusses enhancing revenue and efficiency with Sri Lanka Customs and Inland Revenue officials
President Anura Kumara Dissanayake held a key meeting with senior officials from both the Sri Lanka Customs Department and the Inland Revenue Department at the Presidential Secretariat today (09). The discussions centered on strategies to enhance revenue generation and improve operational efficiency within both departments, in line with the government’s broader economic mandate.
During the meeting, officials from both departments presented the challenges they face in managing revenue and tackling tax evasion. They stressed the importance of strengthening coordination between the Inland Revenue Department (IRD) and Customs to effectively combat these issues. It was highlighted that better collaboration would ensure more robust enforcement of tax laws and prevent tax leakage, further boosting the country’s revenue collection.
Representing the Sri Lanka Customs Department were P B S C Nonis, Director General of Customs; Mrs. H W S P Karunaratne, Additional Director General of Customs; . C S A Chandrasekara, Additional Director General of Customs; W S I Silva, Additional Director General of Customs; S P Arukgoda, Additional Director General of Customs; J M M G Wijeratna Bandara, Additional Director General of Customs; A. W. L. C. Weerakoon, Senior Deputy Director and M R G A B Muthukuda, Chief Financial Officer, among other officials.
From the Inland Revenue Department, Mrs. W S Chandrasekara, Commissioner General; B K S Shanta, Deputy Commissioner General; Mrs. J A D D B K Siriwardena, Deputy Commissioner General; Mrs. J D Ranasinghe, Deputy Commissioner General; D M N S B Dissanayake, Deputy Commissioner General; H H S Samantha Kumara; and Ms. T M S Thennakone, Senior Commissioner, participated in the discussions.
News
Vietnamese Ambassador meets President; explores possibility of enhancing direct flights between Vietnam and Sri Lanka
The Ambassador of Vietnam to Sri Lanka, Ms Trinh Thi Tam, paid a courtesy call on President Anura Kumara Dissanayake at the Presidential Secretariat this afternoon (09).
During the meeting, Ambassador Tam conveyed her congratulations on behalf of the Government of Vietnam and expressed optimism for continued cooperation between the two nations.
Highlighting Vietnam’s achievements in foreign direct investment (FDI) and trade, President Dissanayake requested Vietnam’s assistance in fostering these sectors in Sri Lanka.
The discussion also explored the possibility of enhancing direct flights between Vietnam and Sri Lanka, with a focus on strengthening Buddhist ties and cultural connections. Ambassador Tam further pledged to explore opportunities to promote Sri Lanka as a key destination for Vietnamese tourists, thereby expanding people-to-people connections and boosting tourism.
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