Reliable sources confirmed to The Morning that the NFE is currently in the process of pulling out of the said agreement, through which the NFE was to acquire 40% of the shares of the Yugadanavi Power Plant,
Meanwhile, the Ceylon Electricity Board Engineers’ Union (CEBEU) too has raised concerns over the status of the agreement between the Government and the NFE.
The CEBEU stated that although the Government should terminate the relevant agreement and make a public declaration if the relevant project is not to be awarded to the NFE, and that the duly selected company should be awarded the contract to develop the related infrastructure to supply LNG to power plants, it is doubtful as to whether the Government is not doing so as there are plans to implement the agreement when public opposition to the same subsides.
Speaking to The Morning, a CEBEU official, who wished to remain anonymous, said that when the Opposition had queried what would happen to the said agreement during a recent Parliamentary session, the Government had not expressed a firm opinion on it. He mentioned that according to the financial terms contained in the relevant agreement, NFE has not yet paid the sum of $ 250 million to Sri Lanka, and that the company does not seem to have any commitment with regard to the project. “The fact that there is no discussion about this agreement does not mean that this deal is off. It can come up at any time. If this does not work, the Government should openly declare that this deal is no longer valid, but nothing of the sort has happened so far. For such reasons, we have doubts as to whether the Government hopes to put this agreement on the backburner and implement it after public opposition to this agreement is suppressed. We do not know when it will come up again,” he said.
Before the agreement between the Government and NFE was signed in an unsolicited manner, he charged, another company was selected under the due tender procedure to develop the infrastructure needed to supply LNG to the power plants. However, he added, according to the agreement signed secretly between the Government and NFE, all the projects such as the LNG supply and the development of the related infrastructure have been assigned to NFE, and therefore, he said, a situation has now arisen where the selected company cannot be awarded the relevant project to develop the related infrastructure.
“The CEB and the Ceylon Petroleum Corporation (CPC) jointly selected a reputed company of foreign origin to develop the necessary infrastructure for the LNG supply following the prescribed tender procedure. The CEB and the CPC drafted the necessary agreement for awarding the project to that company, and all relevant clearances were obtained from the Attorney General’s Department. All the documentation in this regard had been forwarded to the Ministry of Power and Energy about three months ago. After that, the Ministry is responsible for getting the approval of the Cabinet of Ministers to sign the relevant agreement, but so far no approval has been received,” he said.
Speaking further, the said CEBEU official stated that the Government has a responsibility to prepare the necessary environment to quickly develop the infrastructure needed to supply LNG to the power plants in order to prevent a potential energy crisis from occurring in the next few years. He further said that the company that was selected under the due procedure has even agreed to provide the necessary funds to implement the project. Warning that Sri Lanka will have to face a huge energy crisis due to a fuel shortage in the next three or four years if the related work is not arranged promptly, he said that the relevant Cabinet paper should have received approval about three months ago, but that the delay in it is an incalculable loss.
“We do not know whether or not the relevant Cabinet paper has been submitted to the Cabinet yet, or whether the Cabinet has not approved it, but why is the approval being delayed? There is no talk on the agreement between the Government and NFE at the moment, but we don’t know what is happening inside. If a commercial agreement is signed, and if it is not to be implemented, the Government has an obligation to make a declaration that it is no longer valid. When the Government does so, another investor can be engaged,” he explained.
In mid 2021, several parties demanded the immediate withdrawal of an agreement on the transfer of 40% of the Treasury shares of the Yugadanavi Power Plant to NFE and the immediate termination of the agreement signed by the Ministry of Finance with the said company in that regard. In addition to the 40% of the shares of the Yugadanavi Power Plant, it was reported that the construction of a pipe system which will be used to bring in gas, a floating storage complex which will be used to store gas, and the operations related to gas supply, had also been handed over to the company in question through the relevant agreement.
BY Buddhika Samaraweera
