Kerawalapitiya LNG tender awarding faces further delays

• Two bidders oppose awarding of contract to Lakdanavi 
• Govt. yet to set time frame to evaluate objections
• Feasibility on LNG terminal and floating storage regasification unit underway

The construction of Kerawalapitiya 300MW Liquefied Natural Gas (LNG) power plant is likely to experience further delays as two bidders have filed objections over the awarding of the tender to Lakdanavi Ltd, a subsidiary of LTL Holdings (Pvt) Ltd.  

Speaking to Mirror Business, Secretary to the Ministry of Power and Renewable Energy, Dr. Suren Batagoda said the Standing Cabinet Approved Procurement Committee (SCAPC) and the Tender Evaluation Committee (TEC) will have to evaluate the objections of the bidders, which will further drag the tender process, that has already delayed for over 18 months. 

Speaking to Mirror Business, LTL Holdings, Vice President, Sameera Ganegoda said, “We have been informed that we are the recommended party for the contract to be awarded.

 However, we have not received the official letter for the contract yet as two parties have filed objections against awarding the contract to us during the appeal submission period which ended last Tuesday.” 

According to CEB Engineers Union (CEBEU), the delay has already caused over Rs.18 billion in losses to CEB. 

According Ganegoda, LTL Holdings submitted the lowest bid of US $ 160 million for the construction of the 300MW Liquefied Natural Gas (LNG) power plant in Kerawalapitiya. 

He also noted that the government has not set a specific period for the evaluation of these objections. 

However, he said the construction of the plant can be completed by 2020, if the contract is awarded to Lakdanavi Ltd. this year. The government has proposed the LNG power plant to operate on diesel for 1-2 years until LNG supplies are secured. 

The awarding of the tender was earlier delayed due to disagreements over opening the financial bid of Samsung JV Korea Group, without considering bids of seven other firms.

Meanwhile, Dr. Batagoda said that the feasibility study has commenced for the proposed LNG terminal and Floating Storage Regasification Unit (FSRU) near Colombo as a joint venture (JV) between India’s largest importers of liquefied natural gas (LNG), Petronet LNG Ltd., and Japanese parties. 

The government earlier signed a MOU with Japan and India to carry out a feasibility study for the proposed terminal. As per the MOU, a JV was established under the Sri Lanka Ports Authority (SLPA).