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LNG project: China-Pakistan company out, India in

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The Government has decided to cancel a tender awarded to a China-Pakistan consortium to supply Liquefied Natural Gas (LNG) and lay a pipeline network after being selected through an international open competitive bidding process and instead consider an offer by an Indian company.

The China-Pakistan Engro Consortium was selected last year as part of a step towards reducing the cost of power production.

However, last Monday, Power and Energy Minister Kanchana Wijesekera submitted a Cabinet paper titled “Revisiting the National Energy Policy Related to the Development of Natural Gas Infrastructure in the Country,” to suspend the ongoing LNG procurement process.

Accordingly, the suspension covers the Development of a Floating Storage and Re-gasification Unit (FSRU) off Kerawalapitiya on a Build, Own, and Operate basis and a compatible mooring system on Build, Own, Operate and Transfer basis. It also covers the associated projects – the development of Offshore and Onshore Re-gasification Liquefied Natural Gas (RLNG) Transmission Pipeline Network with an Onshore Receiving Facility (ORF) and an associated System from the Floating Storage and Re-gasification Unit (FSRU) to existing and future Kerawalapitiya and Kelanitissa Power Plants on Build, Own, Operate and Transfer (BOOT) basis.

After following the proper tender process, the Cabinet-Appointed Negotiating Committee (CANC) in August last year granted approval to award the tender to the Engro Consortium.

Accordingly, although the Power and Energy Ministry had to submit a cabinet paper to enable the tender to be awarded thus, the ministry delayed the process, Ministry sources said.

The Sunday Times learns that the process had been delayed as the Indian government strongly objected to awarding this tender to the China-Pakistani company.

However, finally, the subject minister had requested cabinet approval to suspend this officially permitted tender, under these circumstances.

The Ministry had instead attempted to award this tender to Petronet LNG Ltd. of India, as an unsolicited procurement, but since the company did not have any experience regarding FSRU, the ministry had rejected the request and said if the Indian government supported the company, they would be able to supply LNG in containers.

“This will badly hamper the investor confidence and no genuine investor will come forward in future to this country,” the official said.

A Ceylon Electricity Board (CEB) top official said, “It will be a costly solution as there would be no competition, with prices being determined by the Indian company”. He said it could have an impact on the electricity tariff which would be increased and all costs would be passed on to the consumers.

The CEB’s Least Cost Long Term Generation and Expansion Plan (LCLTGEP) (2018-2037), which was approved by the Public Utilities Commission of Sri Lanka (PUCSL) in 2018, identifies the need for converting furnace oil and diesel power plants to LNG power plants to reduce power generation costs.

Accordingly, the CEB called for international competitive open tenders from February 18, 2021 to June 25, 2021, and two bidders came forward.

At that point, the US-based New Fortress Energy Company which gave rise to much controversy in 2021, had, without submitting an open bid for this tender, presented an unsolicited proposal to the government. The then Gotabhaya Rajapaksa government which supported this unsolicited proposal had even signed an agreement to sell 40% of the shares of the 300 MW Treasury-owned Kerawalapitiya Yugadhanavi Diesel Power Plant to the New Fortress Energy.

However, due to strong objections to the deal, the agreement had not been implemented up to now.

Against this backdrop, the CANC granted approval on August 4 last year to award the tender to the China-Pakistan Consortium, one of the two companies which had submitted proper bids for the tender.

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Fire breaks out in workers’ living quarters near Colombo Port

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A fire has reportedly broken out in the living quarters of highway access road workers near the Colombo Port.

The Colombo Fire Brigade said it has dispatched four fire trucks to assist in extinguishing the flames.

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President Wickremesinghe meets Elon Musk to discuss starlink implementation in Sri Lanka

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President Ranil Wickremesinghe has met with billionaire and investor Elon Musk on the sidelines of the 10th World Water Forum High-Level Meeting being held in Indonesia.

During the meeting, Wickremesinghe and Musk discussed the implementation of ‘Starlink’ in Sri Lanka.

It was emphasized that Sri Lanka is committed to expediting the application process to connect the country to the global Starlink network, according to the President’s Media Division (PMD).

Minister Jeevan Thondaman, accompanying the President on his two-day visit to Indonesia, tweeted: “President and Elon discussed Sri Lanka’s recovery, economic potential, and new opportunities for investment. Great to have two visionary leaders come together for Sri Lanka.”

Elon Musk arrived in Indonesia’s resort island of Bali on Sunday to launch Starlink satellite internet service in the world’s largest archipelago nation.

The billionaire head of Tesla and SpaceX, and owner of social platform X, arrived by private jet on the idyllic “island of the gods,” renowned for its tropical beaches, terraced rice paddies, mystical temples, and colorful spiritual offerings.

Musk is slated to launch the service alongside Indonesian President Joko Widodo in a ceremony later Sunday at a public health clinic in Denpasar, the provincial capital of Bali. 

Musk will also sign an agreement to enhance connectivity in the country’s health and education sectors.

During his first in-person visit to Bali, Musk is also scheduled to participate in the 10th World Water Forum, which seeks to address global water and sanitation challenges.

–With agencies inputs

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Senior diplomat to oversee Sri Lankan embassy in Russia

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It is reported that the government has planned to send a senior officer of the foreign service to the Sri Lankan embassy in Russia until a new ambassador is appointed due to the lack of an ambassador.

Minister of State for Foreign Affairs Taraka Balasuriya has told the media that the absence of an ambassador is just a gap in the work procedure, and based on the current situation in Russia, a senior official of the Ministry of Foreign Affairs will be directed to supervise its affairs.

He emphasized that a retired foreign service senior is being sent and the lack of an ambassador is not a major problem.

The Minister further stated that there is already a senior Foreign Service officer there, and given the urgent need, a very senior Foreign Service officer is being sent not because the officer currently in Russia is inadequate.

Mr. Balasuriya has stressed that this is being done to strengthen the operation and that the work will be done according to the normal protocol.

However, even though an ambassador has been appointed to Russia, Mr. Balasuriya has made arrangements not to reveal who it is to the media.

The former Ambassador of Sri Lanka to the Russian Federation, Prof. Janitha A. Liyanage, was given three extensions, and she ended her service at the Sri Lankan Embassy in Moscow on April 29.

At present, Counsellor Ruvini K. Munidasa serves as the Chargé d’Affaires of the Embassy.

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