Int’l energy companies question Government

CEYLON TODAY | Published: 2:00 AM Feb 27 2021

By Sulochana Ramiah Mohan

The top energy project by U.S./Canada based energy companies, Sithe Global and Greenlink Global Consulting Inc, (Greenlink) that geared to invest in a USD 1.4 billion Hambantota Energy Project (HEP) in 2009, has urged President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa to initiate a probe why the project was shelved by the former Yahapalana Government and is calling for a probe. Greenlink said they would be compelled to proceed with the registered legal case with the Attorney General (AG) of Sri Lanka for damages amounting to USD 400 million and punitive damages, which was filed through Greenlink’s lawyers, Amsterdam and Partners, Washington DC.

The international business development and consulting firm Greenlink also urged the Government to open the HEP for international bids to ‘ease’ the geopolitical tension the country is facing and invite global foreign investments.

Over the shelving of the proposed USD 1.4 billion HEP, Greenlink had registered a complaint with the AG in Colombo on 10 July 2020 through the international law firm based in the U.S. that is reputed for litigating international claims for damages.

The HEP was proposed during the 2009-2010 term of former President Mahinda Rajapaksa by Greenlink that introduced Sithe Global, a fully-owned subsidiary of the Blackstone Group Inc, who came in at an opportune time to invest USD 1.4 billion into the development of the HEP. 

In the letter to the administration, the company said that the investment and the financial returns from the project would have not only brought long term economic and social benefits to Sri Lanka but would have readily been used to service the debt to China’s Hambantota Port and would have saved the previous Government from signing the controversial and inequitable 99- year port lease.

Around September 2011, Sithe Global, with the assistance of Greenlink, submitted its application for Board of Investment (BOI) approval, with a proposal synopsis for the HEP project to the Sri Lanka Ports Authority.

In February 2012, Sithe Global executed an exclusive Memorandum of Understanding (MoU) with the BOI for the Liquefied Natural Gas (LNG) infrastructure project at Hambantota, as a Foreign Direct Investment (FDI). October 2012, Sithe Global, with the assistance of Greenlink, prepared a feasibility study that included the construction of a 500 Mega Watt (MW) LNG re-gasification and storage infrastructure facility at the Hambantota Port which was submitted to the BOI. 

The feasibility study confirmed the technical and financial feasibility of the project and reconfirmed Hambantota as the LNG infrastructure hub to secure long-term benefits to the country not only in terms of investment and revenues but also from ultimately gaining control over HEP over time. The feasibility study document is already on record, with the Government and all stakeholders of the project that had approved the study in principle. 

“The current geopolitics challenges and issues have been fuelled by the corrupt politicians of the Yahapalana Government and we are determined to address those issues and help bring investments to Hambantota,” spokesman for Greenlink said. 

“We are in communication with the Government of Sri Lanka and we want answers to the 10-year investment in research and development of the HEP venture and the subsequent decision to shelve such a critical infrastructure project. Greenlink had completed all of the work and obtained critical support and we cannot allow another country to use corrupted politicians and corrupt business actors to use the work of a company that has made significant investments and worked diligently with GOSL Officials. The wrongdoings needs to be investigated and the HEP to be open for international bids under an open, transparent and independently monitored process to attract reliable parties and prevent corruption from influencing the process,” Greenlink added. 

Greenlink spokesman noted that they and Sithe officials had numerous meetings with regard to the HEP with Dr. Priyath Wickrama who was then Port Chairman and Dr. P.B. Jaysundera and M.M. C Ferdinands who was then BOI Director General and Secretary Ministry of Power and Energy.

“To save on mobilisation cost we offered terms of reference to both State owned Chinese entities under non-compete and non-circumvention agreements. The Officials of the Ceylon Electricity Board commended our world-class feasibility study.”

The spokesman added that in March 2015, they had met then Minister Finance and expressed concern of the delay of obtaining the letter of intent (LOI) to negotiate the power purchase agreement (PPA) 

Subsequently on the request of then Secretary of the Ministry of Power and Renewable Energy (MPE), a Technical Presentation was made to the Parliamentary Sub-committee in December 2015 and the MPE and CEB officials requested Greenlink to invite the Government of Canada to the project.

In 5 February 2016, the Government of Canada through Its Crown Corporation Canadian Commercial Corporation (CCC) expressed its interest in the project by offering a sovereign guarantee to the selected developer through an open bid process. However, after meeting with the then advisor to former Prime Minister Ranil Wickremesinghe, R. Paskaralingam and Sagala Ratnayake in March 2016, along with the Canadian High Commissioner, the Government of the time failed to recognise the value and validity of the HEP project as presented by Greenlink or recognise it, he said. 

CEYLON TODAY | Published: 2:00 AM Feb 27 2021

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