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Moves to kick-start Rs.15bn mega pipeline project comes under fire

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Despite anticipated drop in fuel consumption for thermal energy

bY SURESH PERERA

With three major Liquefied Natural Gas (LNG) projects now on the cards coupled with the commissioning of the Mannar wind power plant, questions are being raised over ongoing moves to forge ahead with plans to build a mega Rs.15 billion cross-country oil pipeline when the long-term demand for thermal power is expected to drop drastically.

The renewed interest within some quarters with political blessings to implement the proposed pipeline project at such stupendous cost has raised eyebrows as the monthly consumption of 45,000 metric tons of fuel to generate costly thermal energy will no longer be necessary with LNG and wind power supplementing the country’s demand for power, industry officials said.

At a time Sri Lanka is facing a grave economic crisis due to the Covid-19 pandemic, what is the urgent need for a cross-country pipeline when there will be far less fuel imports in the long term?, they asked.

With a proposed solar power project at Siyabalanduwa also in blueprint stage, constructing a high cost pipeline at this juncture is as insensible as “watering outdoor plants when it’s raining”, and ultimately result in the project being rendered redundant with billions of rupees going down the drain, they opined.

In addition, bids have already been called to build a new pipeline to facilitate the transfer of jet fuel from the Muthurajawala tank farm to Katunayake at substantial cost. Under the circumstances, what’s the viability of investing on another project when alternate energy sources will make thermal power generation irrelevant in the long run, industry players further queried.

Even if the cross-country pipeline project begins tomorrow, it will take another four years for its completion, whereas the LNG plants will be operational within three years. With a lifespan of 25 years on the pipeline, the country will not be able to recover even the cost of the multi-billion rupee project, they asserted.

Sri Lanka has already signed three major LNG deals with the governments of China, India and Japan. While the proposed combined plants are expected to add 1,400MW to installed capacity, the transnational agreements will play a key role in mitigating unreliability in hydro power supply while bolstering foreign capital inflows.

Sri Lanka’s fuel consumption per day is 5,000 metric tons, of which 1,500 metric tons are channeled to generate thermal power. While the Sapugaskanda facility has the capacity to refine 2,000 metric tons of crude oil per day, the balance 1,500 metric tons are imported as refined oil.

Lanka IOC directly imports refined oil, which is stored and distributed by Ceylon Petroleum Storage Terminals Limited (CPSTL).

A tanker load of 40,000 metric tons of fuel can be discharged within 24 hours. With the anticipated drop in fuel consumption for thermal energy after the proposed entry of LNG into the energy market, the number of tankers can be also reduced with a substantial cost saving, industry officials said.

The cross-country project was first proposed during 2013-14 but was shelved with the construction of the Muthurajawala oil tank farm, which was augmented by a new oil pipeline at the Sapugaskanda Oil Refinery by CPC (Ceylon Petroleum Corporation) engineers.

However, renewed interest on the project re-surfaced during the tenure of the previous UNP government with then Minister Kabir Hashim presenting to the Cabinet a bid by Langfang-based China Petroleum Pipeline Bureau to build the pipeline at a cost of Rs. 15 billion.

A Malaysian company, which quoted Rs. 7.5 billion for the proposed project was disqualified at the time as its tender documents were apparently “not in order”.

Under the new dispensation, the CPSTL sought the cancellation of the tender awarded to the Chinese company as the CPC engineering team reached the conclusion that they can undertake the job after a new feasibility study and related research were conducted to find alternatives as the estimated Rs. 15 billion cost factor was enormous.

The project could be completed internally within 30 months at a cost of Rs. 5 billion, which translates into a saving of Rs. 10 billion for the country. However, with multiple alternate sources of energy in the offing, it has been determined that it was unviable to implement such a mega project at tremendous cost when another new 18-inch diameter pipeline would suffice to meet the demand.

It doesn’t make sense to call for international tenders to build pipelines when local engineers are capable of achieving the feat, industry officials said. “Of course, there are no fat commissions rolling in when these jobs are handled by Sri Lankan professionals”.

In what industry players described as a “strange twist”, there are continuing overtures to push through the pipeline project in a new game plan to perhaps line the pockets of some officials as the task could be completed for one-third of the estimated cost by local engineers. “With Rs. 10 billion to throw, there will be many on the gravy train if the deal works out!”.

Meanwhile, S. D. J. Paregama, secretary of the Sri Lanka Nidahas Sewaka Sangamaya (Petroleum Branch) expressed concern over moves to revive the project, which, he said, was a waste of public funds at a time the country’s economy was in bad shape.

“After our union wrote to President Rajapaksa on the futility of implementing this costly pipeline project, he directed that it be halted immediately”, he said.

After a bout of silence, there are subtle moves now to push ahead with the project with the Chinese bidder, he claimed.

“As a trade union which supported the President at the last election, we expect him to take a firm stand to ensure that public funds are not squandered on projects that are white elephants”, he emphasized.

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GL sounds far-reaching educational reforms  

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Education Minister Prof. G.L. Peiris yesterday (21) acknowledged that for want of tangible measures on the part of successive governments, there was a critical mismatch between the education provided and the availability of job opportunities.

The academic, in quarantine as a result being identified as potential Covid-19 contact, emphasised the need for far reaching changes to address the issue as part of their efforts to restructure the entire system.

Prof. Peiris said so in his short remarks at an event to mark the 100th anniversary of the University of Colombo.

The one-time External Affairs Minister said: “It is a great pleasure for me to felicitate the University of Colombo, my alma mater on this happy occasion. It is a significant milestone because we celebrate the 100th anniversary of the faculty of arts, faculty of science and the library of the University of Colombo. As we look back on that span of a full century, the characteristics of the University which comes to mind is its resilience. During that period the University has had to face and indeed overcome many challenges. The society of our country has undergone a fundamental transformation during that period.

The University had the strength to cope with rapidly changing circumstances. I would identify that as a principal accomplishment of the University of Colombo.

The University proved its capacity for development, change and refinement and adaptation in order to keep pace with dramatically changing circumstances. The University proud as its history is I am sure will have an even more magnificent future. It has an important role to play in the far reaching changes we are contemplating in the educational system of our country. It is our intention in the course of this year 2021 to restructure the entire system in order to address the fundamental problem of a rather critical mismatch between the education we provide in our Universities and other educational institutions on the one hand and the availability of employment, livelihoods on the other. There is regrettably gap in this regard and it should be our collective endeavor to address this problem. We are also revisiting the curricular. The substance of our curricular  the methods of teaching in such a way  as to serve better the public in a  better way   In all these efforts I have no doubt the expertise of the University of Colombo by any standards  will be of enormous assistance to us in achieving goals we have set ourselves (SF)

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China slaps sanctions on 28 Trump administration officials, including Pompeo

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China has imposed sanctions on 28 former Trump administration officials, including outgoing Secretary of State Mike Pompeo, agency reports said yesterday.

In a statement released just minutes after President Biden took office, China’s foreign ministry said it had decided to sanction those “who have seriously violated China’s sovereignty and who have been mainly responsible for such U.S. moves on China-related issues.”

The list of names features former Health and Human Service Secretary Alex Azar; former White House trade adviser Peter Navarro; former national security adviser Robert O’Brien; Kelly Craft, the former U.S. ambassador to the United Nations; and Matthew Pottinger, who recently resigned as deputy national security adviser. Former national security adviser John Bolton and former White House chief strategist Steve Bannon were also included.

The sanctions prohibit those individuals and their immediate family members from entering mainland China, Hong Kong and Macao. They are also restricted from doing business with China, as are any companies or institutions associated with them.

“Over the past few years, some anti-China politicians in the United States, out of their selfish political interests and prejudice and hatred against China and showing no regard for the interests of the Chinese and American people, have planned, promoted and executed a series of crazy moves which have gravely interfered in China’s internal affairs, undermined China’s interests, offended the Chinese people, and seriously disrupted China-U.S. relations,” the ministry said.

The move comes just one day after Pompeo issued a forceful statement accusing China of committing genocide against Muslim Uighurs and other minority groups in its Xinjiang region, for which the U.S. sanctioned several Chinese officials in July. That was one of numerous instances of sanctions, visa bans and trade restrictions imposed on Chinese politicians and Communist Party officials in the Trump administration’s final year.

Relations between the U.S. and China deteriorated considerably under the previous administration, which took an unusually confrontational approach. Pompeo and other officials referred to China as constituting America’s greatest threat, as NPR’s John Ruwitch has reported.

In fact, Bolton appeared to celebrate the sanction against him, calling it “great news” in a tweet posted Wednesday afternoon.

“I accept this prestigious recognition of my unrelenting efforts to defend American freedom,” he wrote.

It is unclear what changes Biden plans, but Ruwitch noted, “Even if the Biden team moves swiftly to put the U.S.-China relationship back on a less antagonistic track, Beijing will be wary after the dramatic changes of the past four years.”

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Expert Committee appointed to report on gold, copper and iron ore deposits

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By Ifham Nizam

Environment Minister Mahinda Amaraweeera yesterday appointed an expert committee to conduct a scientific study on the Seruwawila gold, copper and iron ore deposits.

With iron ore prices skyrocketing worldwide and both neighbouring giant India and China having huge demands, Sri Lanka was keen on tapping natural resources, an official said.  

The committee will be coordinated by an Additional Secretary to the Ministry and will be chaired by Prof. Athula Senaratne of the University of Peradeniya and its other members are H W. Navaratne, Dr. Stalin Fernando, Dr. Bernard Perera, Dr. C.H.K.R. Siriwardena and Dr. O.K. Dissanayake.

Amaraweera, addressing the media, at his Ministry yesterday said the mineral deposit had been explored in the 1970s with the help of technology available at that time, and it had been found that there was iron, copper as well as a certain amount of gold in the Seruwawila deposit.

As today’s excavation technology was very advanced, it was possible to dig up to 250-300 metres, the Minister said.

The Minister also said that all possible steps would be taken to increase the value of the mineral resources through value addition locally to ensure higher prices.

 

 

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