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PCoI to investigate corruption of current administration Sri Lanka will lose Rs.90 billion if LNG power plant not given to LTL

02 Aug 2019 - {{hitsCtrl.values.hits}}      

By Yoshitha Perera 

If the government awards the construction of a 300 MW LNG power plant at Kerawalapitiya to any other company than Lanka Transformers Limited (LTL) the country will lose Rs. 90 billion in the next 20 years, Sameera Ganegoda, Chairperson of the LTL staff Union informed the Presidential Commission of Inquiry (PCoI) to investigate corruption of the current administration yesterday.  


Mr Ganegoda said that LTL was one of the main competitors to build the LNG power plant and had been recommended by the Technical Evaluation Committee (TEC) on the power plant on four separate occasions.   


“On November 2016, the tender was called to construct the power plant and we submitted our bid on April 21, 2017. It was a two envelope system, where technical and financial bids are submitted separately and the financial bids of those who have successful technical bids are open. On June 06, 2017, the TEC decided that financial bids of six companies should be open but the Cabinet Appointed Procurement Committee only opened the bid of one Company, Samsung C & T. But because they didn’t submit a hard copy of an important document their financial bid was rejected,” he said.  


On a meeting held on June 13, 2017 Secretary to the Ministry of Power, Suren Batagoda told Chairperson of LTL, U. D. Jayawardena to withdraw their bid and this has raised suspicions that there will be deliberate attempts to spoil their bid, witness said.   “We had the least cost and had cost the price of unit of power at Rs. 14.98. The second best price by WindForce was Rs. 15.97. The TEC approved our bid and sent us some details for us to clarify. On November 22, 2017 we answered these. Among their main concerns was the fact that we had calculated the price for the equipment for the project without VAT and Nation Building Tax. We did this because Value Added Tax Act, No 14 of 2002 says that equipment purchased by CEB or anyone who had entered into an agreement with it for power generation is excused from VAT,” he said.  


Batagoda then obtained a letter from the Ministry of Finance stating that the equipment LTL wanted to import is not exempt from VAT. LTL again inquired about this from the Finance Ministry as the VAT Act had not been amended.  


“We were informed that such concessions have been suspended from November 2016. But still even if we add VAT we are about 80 cents less than the second closest bidder, ” he said.   
Witness said that the TEC considered and recommended that we should be consulted to see if LTL are ready to provide a unit of energy for the same price, even without the VAT exemption. The company agreed for that condition. So far the TEC had chosen us in four separate occasion but the Ministry of Power and Energy have not given a chance to LTL for meeting with the Ministry, he informed the Commission.