Govt. likely to stick with PAB decision on 300MW Kerawalapitiya LNG plant tender

The government has decided to stand by the decision of the Procurement Appeal Board (PAB) and Power and Renewable Energy Ministry to award the tender for 300MW Kerawalapitiya liquefied natural gas (LNG) power plant to the second lowest bidder, GCL Windforce & RenewGen, a highly placed government source told Mirror Business. 

The source dismissed the claims that Lakdanavi Ltd, a subsidiary of LTL Holdings, was the “lowest responsive bidder” pointing out that Lakdanavi’s bid was a conditional bid relying on the state privileges and exemptions such as the VAT, NBT and PAL, whereas a Request for Proposal (RFP) had clearly stated that the bid should not rely on any government privileges and concessions. 

“Therefore, according to the RFP, any conditional bid has to be rejected. Also, according to the RFP, no bidder can change the substances of the proposal, which Lakdanavi attempted to do after the bid closing date, which is what resulted in the bid being awarded in their favour. 

However, the PAB saw through this and identified many RFP violations in Lakdanavi’s bid,” the source noted. 

However, Lakdanavi had informed the PAB that the company was ready to infuse Rs.4 billion worth of company funds into the project, if the VAT and NBT exemptions were not granted by the Finance and Mass Media Ministry.  

Meanwhile, the National Movement for Consumer Rights Protection yesterday said they filed a petition at Appeals Court against the possible awarding of 300MW LNG power plant tender to the second lowest bidder, as such a move would cost the public billions of rupees.

Energy experts had earlier pointed out that the awarding of the contract to the second lowest bidder would result in a losses of Rs.42.5 billion over 20 years.
The Cabinet paper awarding the contract to GCL Windforce & RenewGen is expected to be presented to the Cabinet today.         

                  
Proposals for the 300MW Kerawalapitiya LNG plant were initially called in November 2016 and following several controversies, which included the rejection of eight out of seven bids at one point of the bidding process, the Standard Cabinet Appointed Procurement Committee (SCAPC) was finally able to award the contract to Lakdanavi last month. 

However, two bidders— Samsung JV Korea Group and GCL Windforce & RenewGen— appealed to the PAB to reverse the decision and consequently agreeing with the concerns raised by GCL Windforce & RenewGen and observations of the Power and Renewable Energy Ministry, the PAB decided to award the contract to GCL Windforce & RenewGen, reversing the SCAPC’s decision to award the contract to Lakdanavi Ltd.