Expressions of Interest over proposed new refinery in Hambantota China’s Sinopec among shady bidders only qualified contender

• How transparent really are they on their latest project in establishing an export oriented oil refinery in Hambantota
• At least 4 out of the six remaining companies who have applied have no  experience in oil refineries with some even facing serious allegations 
• Allegations have been rife that only one out of the seven companies stand a good chance in competing for the project

By Jamila Husain  

Millions of angry consumers were left in a panic this week as Trade Unions attached to the Ceylon Petroleum Corporation stopped distributing fuel to fuel stations opposing the government’s move to privatize the CPC.  

Infact queues lined up outside fuel stations in Colombo as soon as the news broke of the Trade Union strike in fear that sheds may run out of fuel. However due to the firmness of the government, the army was deployed at the main petroleum terminals and distribution resumed on Wednesday morning, ending the queues.   

While the Power and Energy Ministry has got tough on the Trade Unions and is earning many a praise from a majority of the citizens, how transparent really are they on their latest project in establishing an export oriented oil refinery in Hambantota?  

On February 24, 2023 the Ministry of Power and Energy called for Expressions of Interest (EOI) to establish an export oriented petroleum refinery and associated product processing centre in Hambantota, on a “Build, Own, and Operate” basis.   

The Ministry said the call for EOIs was a result of the Ministry receiving unsolicited proposals from various investors seeking approval from the government and the Board of Investment for a project of this nature.    
Meeting the deadline on March 27, 2023 were seven companies which submitted EOIs, Minister of Power and Energy Kanchana Wijesekera said in a tweet.

   
The companies were Grant & Shearer Ltd, Lagos of Nigeria, China Petroleum & Chemical Corporation (Sinopec) of China, Petrichor Capital Sdn.Bhd of Malaysia, Vitol Group of Singapore, Matin Tejarat Co. of Iran, Harree Management Services (Pvt) Ltd. with Marka Invest, Abu Dhabi from Sri Lanka and the United Arab Emirates. The only Sri Lankan company to have met the deadline was Dandeniya Engineering Sales and Service Syndicate.  

Power and Energy Minister Kanchana Wijesekera in a Tweet said the technical evaluation committee and other procurement committees will evaluate EOIs and issue the Request for Proposals (RFP) to suitable applicants.  

These companies were required to submit a company profile, annual reports of the last three years, a preliminary project proposal and details of experience in similar projects. They were also required to submit details of expected key investors, consortiums or joint ventures and their contribution and stake in the subject proposal. 

 
The companies would then be shortlisted based on documentary evidence of experience in carrying out similar projects, management expertise demonstrated in the past and the financial capability of the company.   

However, since the announcement, allegations have been rife that only one out of the seven companies stand a good chance in competing for the project, with speculation that the project will be awarded to none other than China’s SINOPEC based on the qualification requirements.  

Extensive research conducted by the Daily Mirror shows that at least 4 out of the six remaining companies who have applied have no experience in oil refineries with some even facing serious allegations.   

This clearly shows that Sinopec is the possible clear contender for the project but EOIs have been called in by interested parties to allegedly make the process look transparent.  
A delegation from Sinopec arrived in Sri Lanka mid March and according to a Tweet by the Chinese Embassy in Sri Lanka, the ‘top delegation’ was in Sri Lanka to enhance cooperation and further investment on petroleum and chemicals, trade and port and industrial park operation.   

The top Sinopec delegation had also met President Ranil Wickremesinghe and during discussions Wickremesinghe had said the government had taken a principled decision to expand the distribution of fuel and the President also noted that Hambantota had been identified as a primary energy hub.   

According to a statement from the President’s Media Division, Sinopec had also pledged to invest in a refinery in Hambantota, during the discussions with the President.   
During the discussions, the representatives informed the Sri Lankan Government that their organization had adhered to the existing system and had applied accordingly. They further conveyed their readiness to fully finance the construction of a refinery in Hambantota.  

China has always had a ‘winning’ edge with the Sri Lankan politicians when it comes to investments in Sri Lanka especially in strategic locations.   

The Hambantota export oriented oil refinery may turn out to be another classic example of this with Sinopec right now being the possible clear contender for the project despite Minister Kanchana Wijesekare’s efforts to make the entire process look transparent. Only time will tell when the companies are shortlisted and selected.