Govt. to sell diesel plant's 51% shares to US firm
Finance Ministry seeks Cabinet approval for new arrangement after CEB engineers oppose sale of EPF shares
The Finance Ministry has submitted a Cabinet paper seeking approval to sell the 51 percent majority shares it holds in a diesel power plant to a United States-based company, the Sunday Times has reliably learnt.
The Kerawlapitiya West Coast Power owned by Lanka Transformers Limited ( LTL), a subsidiary of the Ceylon Electricity Board (CEB), manages the Yugadhanvi diesel plant. The Employees Provident Fund (EPF) owns 23.9 percent of the plants shares and the sale to the American company, New Fortress Energy (NFE), had been rejected by the EPF trustees. There fore, the Government has decided to sell 51% of shares owned by the Treasury.
The Yugadhanvi Power Plant shares are distributed as follows: The Treasury 51%, EPF 23.9%, Lanka Transformers 18%, Lanka Electricity Company 7.1%.
The Ceylon Electricity Board Engineers Union (CEBEU) had informed Power Minister Dulles Alahapperuma in writing that it strongly objects to the American company purchasing 23.9% of shares of the West Coast Power Plant, since it is detrimental to the country.
By then the CEB had called for competitive international bids for the construction of a floating storage regasification unit (FSRU) and a pipeline
network required for supplying gas to current diesel power plants and LNG power plants due to be set up in the future.
However, without submitting a bid, the US-based NFE had presented to the Ministry of Finance, an unsolicited proposal with conditions expressing its willingness to purchase the EPF's 23.9% of shares of the West Coast Power Plant. The conditions included the handing over of all tenders for the construction of an FSRU, the pipeline network required to transport gas to the Kerawalapitiya and Kelanitissa LNG power plants from the offshore terminal located in the sea at a distance of 10 kilometres and the supplying of gas.
The CEB's call for bids was completed on June 18 . NFE did not participate. A CEB spokesman said only two companies had presented bids
The President had issued a directive to the Treasury to suspend taking any action regarding the NFE proposal until June 18 due to the objections of the CEBEU.
However, top Treasury officials had appointed a committee comprising officials of the Ministry of Power, the CEB, the West Coast Power Plant and the Treasury to obtain a report prior to June 10 , subsequent to studying the NFE proposal.
CEB representatives left the committee without studying the NFE’s unsolicited proposal. They maintain what the country requires is only a floating unit (FSRU) and that the FSRU, the pipeline system and gas supplies should be in separate hands.