Reference is made to the article that appeared in the Colombo Telegraph website on 17th February, 2019 captioned “Mangala & Malik: Shady or Senseless; Ministers acting like headless chickens and/or crooked shysters; Mangala and Malik: Shady or Senseless? ” authored by Kumar David. We wish to assert that the article, and in particular the segment titled, “Gigantic blunders loom in the power sector”, contains many factual inaccuracies, false interpretations and baseless allegations, creating a wrong perception in the minds of the reader. Hence, the Ministry of Development Strategies and International Trade wishes to respond clarifying the matters pertaining to Liquefied Natural Gas (LNG) referred to therein.
The article alleges that the “… two ministries involved in awarding power and energy contracts are Malik Samarwickrama’s International Trade Ministry and Ravi Karunanayake’s Power Ministry”. However, we wish to clarify that our Ministry’s role is only that of a facilitator, both from a development strategy and foreign direct investment (FDI) perspective. The decisions on the establishment of power plants, their structures, and power purchase agreements are dealt with by the relevant statutory and regulatory authorities and the line Ministry, i.e., CEB, PUCSL and the Ministry of Power & Energy and Business Development.
We reiterate that this Ministry’s involvement on LNG is supporting the government initiative towards introduction of LNG into Sri Lanka as a new source of energy to the country’s energy mix, taking into consideration the long-term need for the energy security of the country. Since this has to be done through FDI, this Ministry has clearly articulated that such introduction must be done based on all-encompassing feasibility and other related studies and taking pragmatic ground-level conditions into account. It is in this context that this Ministry has, and will continue to, support and facilitate the Government-to-Government (‘G2G’) initiative for LNG Cooperation on a trilateral basis between the Governments of Sri Lanka, India and Japan, which has been continuing for over the last two years.
This Ministry and the Minister categorically deny supporting the proposition of having two or more floating or land-based storage and regasification facilities (FSRU). Our position has been consistently and clearly articulated in several observations made to the Cabinet and Cabinet Sub-committees, when the subject of LNG Introduction or related matters arose.
This Ministry categorically denies any involvement whatsoever with the South Korean proposal and the author’s allegations that this Ministry champions this proposal are frivolous and baseless. Neither the Board of Investment nor this Ministry has received, or is privy to, any such proposal. On the contrary, this Ministry has expressed its concerns on, and articulated the negative impacts of, having more than one Floating (or other) Storage & Regassification Facility by way of several observations made to the Cabinet and Cabinet Sub-Committees.
The feasibility of having a Floating Storage & Regassification Facility (FSRU) and associated infrastructure based on a PPP Model on a trilateral, G2G, FDI model is being diligently deliberated with the engagement of all relevant stakeholders; i.e., line ministries and statutory/regulatory entities. Expert assistance is obtained where needed. The progress upto now is satisfactory and a final decision is expected in the near future. In the meantime, a FDI-based storage and regassification facility in Hambantota to cater to the expected port-related industries is also being considered. The Ministry reiterates that all such projects would be FDI-based and subjected to diligent evaluation, and would most likely be based on PPP models.
While clarifying our Ministry’s position and categorically denying the frivolous allegations made in the referenced article, we wish to reiterate that the introduction of LNG to Sri Lanka should be fast-tracked, based on comprehensive feasibility studies and taking into account country’s hydro capacities (with due recognition of its fluctuation and variability), as well as the potential exploitation of indigenous gas reserves expected to be in 5-7 years’ time.