Kerawalapitiya power plant: Undermining a fair tender process and alleged dark dealings

Kerawalapitiya power plant: Undermining a fair tender process and alleged dark dealings

By Keshala Dias

18 Sep, 2017 | 9:31 pm

On the one hand CEB employees on strike are citing various demands, and on the other hand we have revelations of large scale misappropriation of CEB funds.

Meanwhile, a major energy crisis is drawing closer, if the CEB is unable to meet the energy demand by 2020.Serious questions are being posed regarding the tender process for a 300 megawatt power plant in Kerawalapitiya.

It has been proposed that the 300 megawatt power plant to be built in Kerawalapitiya, will initially be fueled by diesel, before switching to liquefied natural gas or LNG in a few years.

While an international tender process was initiated calling for bids for the construction of this power plant, eight bids were submitted.

Two companies were disqualified following recommendations based on the assessment of the Technical Evaluation Committee (TEC) and six companies were shortlisted for the tender.

Among these six, the TEC determined that five companies had not met the requirement of being able to convert the power plant into an LNG power plant.

Samsung based in Korea, was the only company that met the minimum requirement.

However, their bid was rejected too, on the technical basis that, information had been compiled on a compact disc when submitting the bid.

It was eventually proposed to open the tenders of the other five companies.

This move was opposed by the Standing Cabinet Appointed Procurement Committee, and was followed by the resignations of the Committee’s Chairman and several members.

Submitting a cabinet note bearing his signature, the Prime Minister noted that the Cabinet Committee on Economic Management had concluded that the tenders submitted by the five companies should be considered.

However, according to the report of the TEC, all five companies failed to provide plans for the proposed LNG conversion and had only submitted plans for a diesel power plant.

While the third phase of assessment was carried out today, according to sources, the TEC had decided that the proposal submitted by Lakdhanavi Limited was the most advantageous.

Incidentally, the majority shareholder of Lakdhanavi Limited is Lanka Transformers (LTL Holdings), of which the CEB owns a controlling 63% stake.

One would therefore not be wrong in extrapolating from the information at hand that Lakdhanavi is essentially a subsidiary of the CEB.

The other bidders in this tender process argue that while an international tender process was initiated for this project, it is illegal for a subsidiary of the CEB to submit a bid.

Information has also come to light regarding three Board Members of LTL Holdings and Lakdhanavi Limited, they are; U.D. Jayawardena, M.J.M.N. Marikkar and Ravindra Kumar Pitigala.

What is their role in these two companies. and what motives are they hoping to accomplish?

Who benefits as a result of undermining a fair tender process to select a company for this project?

News1st encourages whistle-blowers and the aggrieved parties to come forward to prevent a possible act of corruption.

News1st will remain vigilant on this issue.