The Sunday Leader

Dubious US$ 1B Chinese Project For H’tota?

  • US$ 1B LNG Project, A Repeat Of Norochcholai, Question Experts

by Ifham Nizam

Experts have questioned the reason for the present United National Front for Good Governance (UNFGG) to entertain another dubious project by the Chinese Machinery Engineering Corporation (CMEC). It is the same company that built the China’s main energy-related project in Sri Lanka – the Norochcholai Coal Power Plant, which has already become a shining example for questionable Chinese investments during the Rajapaksa regime.

The Chinese government has expressed willingness to construct a US$ one billion or approximately Rs. 150 billion worth Liquefied Natural Gas (LNG) based venture in the Magam Ruhunupura Mahinda Rajapaksa Port (MRMR Port) in Hambantota.

It is learnt that Chinese officials have made their interest known to Power and Renewable Ministry Secretary Dr. B. M. S. Batagoda and senior officials of the Ceylon Electricity Board (CEB) that China would invest US$ one billion in constructing a terminal plus storage complex along with an oil refinery and tank farm. They also expressed their willingness to fund a transmission line from the south.

The Sunday Leader reliably learns that CEB senior officials had stated the project was not feasible without a transmission line from Hambantota. But some engineers were of the opinion that CEB is in not need of 200MW.

However, under the projected generation plan Sri Lanka needs some 1,200MW additional capacity. Of the 400MW, 200 MW would be sold to the national grid with the remaining 200MW for their industrial investment activities, the Chinese officials stressed.

Energy sector regulator – the Public Utilities Commission of Sri Lanka (PUCSL), is likely to endorse the project because it is negotiated on a G2G (government to government) basis.

The Chinese government has recommended that the Chinese Machinery Engineering Corporation (CMEC), the builder of the first coal fired power plant in Norochcholai, to construct the 400 MW LNG-based power plant in the port-related industrial zone in Hambantota.

The move has raised the question among energy sector officials as to why an organisation that recorded most number of breakdowns despite their profit earning venture is once again given a similar project.

However, Chinese Ambassador H. E. Yi Xianliang last week told journalists that the recent breakdown at the Norochcholai Coal Power Plant was not triggered by substandard components used by the Chinese as alleged by parties with vested interests but were caused by the incapacity on part of the national grid and the transmission network.

Some engineers endorsed the statement of the Ambassador. They said that the network set up is not geared to handle such plants. The engineers also pointed out they cannot rule out sabotage too with objective of discrediting the Chinese government.

However, an energy expert told The Sunday Leader on grounds of anonymity that a fully-fledged LNG operation or a basic Floating Storage Regasification Unit (FSRU) would cost a minimum of US$ one billion with the refinery costing another minimum of US$ one billion. It is highly unlikely that with transmission lines, a 400MW power plant and other operations, the whole project could be built by a mere US$ one billion investment.

 

 

 

9 Comments for “Dubious US$ 1B Chinese Project For H’tota?”

  1. Trevor Jayetileke

    The Indian Ocean is the place the “Great Game” will be played out in the 21st Century and Sri Lanka is positioned beautifully to provide the “Logistics Fulcrum” for the Energy Security of the Asia Pacific Region which has less that 5% of Proven Crude Oil Reserves of the World. Geopolitical the Indian Ocean and its importance to the Major Powers competing for leverage centers on moving Crude in Gigantic Tankers. India backed by the US ( 3rd biggest Oil producer ) and China backed by Russia ( 2nd Biggest Oil produces) need Sri Lanka to be able to get the better of each other. India is eyeing Trinco as their perceived Energy Hub in the Indian Ocean and Hambantota will provide China a similar Hub and therefore Sri Lanka has to manage this situation with shrewd diplomacy and get the best of both and become what Singapore achieved by doing a similar thing after WW2. This is our last and only chance and we have to grasp the Nettle. We cannot miss it this time. MR messed up his chance and has passed the CROWN to President Sirisena and with a PM without sons to assist him has got a chance of a lifetime. Saudi Arabia the No.1 Crude oil producer will back both India and China and therefore the US Presidential Elections on the 8th of November will be important to both the Asia Pacific and the World and the result will determine the New World Order and the Asia Pacific Century contribution towards the future of Humanity looking for a New Dawn.

  2. It is unfortunate that we have to depend on liquefied natural gas as we are not near to a gas field to pipe it. The liquefied natural gas is , as a result, more expensive naturally, and has little cost savings. More over , with the expected rise in demand for electricity with the Chinese financial city project and megapolis projects we are going to need all the electricity we can get, and there lies the opportunity for those power brokers to avail for themselves the opportunity to inflate prices for the private suppliers in connivance with fraudsters.

  3. DESHAPREMIYA

    KNOWING FULL WELL WE HAVE GAS DEPOSITS IN MANNAR THIS WOULD BE THE BEST PROJECT WE COULD HAVE. SINGAPORE ALREADY HAS LNG BUNKERING FACILITIES IN PLACE.

    BUT TO HAVE POWER GENERATION USING CLEAN FUELS IS A FUTURISTIC INVESTMENT AND WE MUST ALL SUPPORT IT.

    LET THOSE IN THE KNOW GO THROUGH THE FLIP SIDES , FIND SOLUTIONS TO CIRCUMVENT THEM AND LETS GO AHEAD WITH THE PROJECT WITHOUT CALLING IT DUBIOUS

  4. Today our country is in serious financial crisis. Did we really need Hambantota and Mattalan airport during MR period. Why did we built these unwanted projects and for whom. Today MR and his dogs are barking, but they are not willing to talk about these two white elephants built by MR without consulting anybody. Where is GL, Wimal,Bandulla, Dullas and other idiots. I really want to hear their comments. Today we are at the mercy of China. We are giving all our land and prime lands in Colombo to China. Are we part of China? We hate Tamils and we are not willing to give anything to Tamils. But we are prepared to accommodate China in our country and prepared to give our nation to China.

  5. Lankan

    Any LNG plant should not be offered to China or India. It should be offered to a country where LNG is produced. Giving this project to a Chinese company which is a Chinese Govt front and a company which proved beyond any doubt in Noracholai that it is not a good engineering company will only create additional issues with India. Sri Lankan Yahapalana Govt should stop giving Hambantota projects only to the Chinese. No area in Sri Lanka should be an exclusive project development area to anyspecific country. The interest of China and India to control the shipping routes in the Indian Ocean should also be considered by SL Govt.

  6. kumaran

    Please just do it. Agree to whatever the Chinese want, if not their ambassador will scold us!

  7. It is not LNG but Clean Energy.
    Thank God!

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