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| Sunday, 24 July 2005 |
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BOI red tape delays $ 300m foreign investment on power by Gamini Warushamana Bureaucracy at the BOI and the relevant ministries is holding up a US$ 300 million foreign investment for the power sector. All attempts made by the local representative of the Canadian and USA investors and Minister of Industries Anura Bandaranaike to get BOI approval for the project since February this year have been unsuccessful. At the end of last week the office of the Director (Project) of the BOI informed the Ministry of Industries that the files in question were missing, Ministry sources said. Under the project a joint venture of BPH International of Canada and Allenborough Energy Corporation of USA presented a proposal to construct a 600 MW Liquid Natural Gas Power plant and sought BOI approval for the first phase of the 300 MW plant at Kerawalapitiya. The new investors agreed to provide power at US$ 0.059 or Rs.5.90 during the first five years and US$ 0.0575 or Rs.5.75 per unit during the next 15 years which is cheaper than the present thermal power cost of the Ceylon Electricity Board (CEB). The investors also agreed to provide electricity at this rate for the next 20 years irrespective of world natural gas price changes. "The investment was brought into the country by Minister Bandaranaike after considering the urgent power needs of the country. The business community urged the Minister to solve the present power crisis. The country has to find a cheap power source within a short time and it cannot wait until construction work of the coal power plant or Upper Kotmale power plant is completed", a ministry spokesman said. Investors hope to complete construction work on the new plant within 14 months. In the second phase it is expected to add another 300 MW combined cycle plant and increase the total capacity to 600 MW. The project proposal was presented to the cabinet on April 27 this year and the cabinet also called for an evaluation report about all power project proposals. However, the papers have not reached the CEB for evaluation. Minister Bandaranaike has sent several letters to the Chairman of the BOI Saliya Wickramasooriya, the first being on March 28 and again on May 2 and June 28. The Minister has also sent a letter to President Chandrika Bandaranaike Kumaratunga on July 6 with a copy to the BOI chairman on this matter. The project is a total private venture and will be implemented on a Build Own Operate and Transfer (BOOT) basis for 20 years. The company will construct natural gas storage tanks and a pump line. The local representative of the investors H.M. Nawarathne said that investors are perturbed over the unexpected delay. They have already reserved two Mitshubishi 501F, 62 MW generators. The Abu Dhabi based natural gas company has agreed to supply natural gas at a fixed price. The Canadian and US companies are experts in the field and operate
several similar power plants around the world, Nawarathne said. |
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