Calls for internal review on HEP anomalies

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Amid the Committee on Public Enterprises’ investigation into the Hambantota Port deal, Sri Lankan-born CEO of Canadian company Greenlink Global Consulting Inc, Michael Fernando has written to Chinese Ambassador to Sri Lanka Qi Zhenhong about the violation of the Hambantota Energy Project (HEP) development rights that were offered to China.

Fernando, who has worked with both the previous and present Sri Lankan administrations, had written to Chinese Ambassador Zhenhong on 5 January, requesting for an internal review with the Chinese Embassy on the miscommunication with the Government of Sri Lanka (GOSL) with respect to HEP.

Fernando said in the letter to the Chinese Envoy that the failure of the State-owned Chinese affiliates to disclose its agreements with Sithe to GOSL and to comply with the terms of the agreements has prevented/circumvented Greenlink Consortium from developing HEP and thwarted the Government of Canada’s initiatives to participate in the project, which would have contributed to Sri Lanka’s energy security and economic development to service its debt and contribute to ease the Indo-Pacific tension in the region.

“Miscommunication created with respect to HEP development rights has resulted in the present dire economic crisis in Sri Lanka, and we believe that the high level officials in the Government of China were not informed of the agreements entered into with Sithe, and that the role Greenlink played in recommending the State-owned Chinese affiliates to play a role in HEP would be respected, as HEP was purely a commercial venture.”

The CEO said Greenlink introduced Sithe Global Power Development Inc (Sithe), a  wholly-owned subsidiary of the Blackstone Group, New York, USA, to a Cabinet approved LNG project initially in Kerawalapitiya in 2010, and later executed an Exclusive Memorandum of Understanding (MoU) with the Board of Investment (BoI) for Hambantota Energy Project in March 2012 and that they had completed their world-class feasibility studies and received all in-principle approvals from all HEP stakeholders pending the Letter of Intent (LoI) to negotiate the Power Purchase Agreement (PPA).

The Hambantota Port was being built at the time by China Harbour Engineering Company Ltd (China Harbour) and Greenlink advised Sithe to assign subcontracts to China Harbour and China Huanqiu Contracting and Engineering Corp (HQC) as the project development advisor to save on mobilisation costs.

The letter further stated that the undersigned met with the country representatives of the above-mentioned State-owned Chinese affiliates on numerous occasions, and as a result, Sithe issued terms of reference after signing Confidentiality and Non-Circumvention agreements with China Harbour and HQC on 19 December 2012 and 24 December 2012. 

Sithe assigned the HEP to Greenlink in 2014 and informed all stakeholders of the project and the BOI confirmed this to Greenlink in a letter dated February 2015, Greenlink said.

Greenlink made a Technical Presentation to the Sri Lanka parliamentary sub-committee in December 2015, at the request of the previous administration under former President Maithripala Sirisena, at which time the Government of Sri Lanka (GOSL) requested Greenlink to bring on board the Government of Canada to continue the development of HEP.

The Government of Canada, through its Crown Corporation, Canadian Commercial Corporation, delivered an expression of interest to GOSL in February 2016, confirming its indicative interest in government-to-government development of HEP, as well as a sovereign guarantee of cost and completion in accordance with international laws and practices.

Around August 2016, while the Ministry of Power and Energy was communicating with the Government of Canada via the Canadian High Commission in Colombo, Sri Lanka, Greenlink was informed by the Canadian High Commissioner in Sri Lanka that the HEP had been handed over to State-owned Chinese affiliates.

Further, he said as he was born and raised in Sri Lanka, he had spent 15 years researching and developing the HEP concept for the benefit of all Sri Lankans on a purely commercial basis.

Greenlink and its stakeholders have committed significant resources to the development of HEP, and all previous and present Sri Lankan officials are fully aware of what occurred in the circumvention of HEP, Fernando said. He also appreciated and anticipated a response and a mutually acceptable proposal to develop HEP from the Chinese Envoy.

By Sulochana Ramiah Mohan