The government is considering using a procedure known as the ‘Swiss Challenge’ to set up a 500 megawatt Liquefied Natural Gas (LNG) plant by the Chinese government in the proposed Industrial Zone in Hambantota, the Sunday Observer reliably learns.
A meeting chaired by the Minister of Power and Energy, Ranjith Siyambalapitiya was held on Friday, to coerce Ceylon Electricity Board officials to speed up the implementation of power projects, to prevent blackouts in the future, as revealed in last week’s Sunday Observer.
It came to light at the meeting, that contrary to previous claims, the LNG power plant to be constructed by the Chinese, would not be a merchant plant for the industrial zone, but that the government would go for an Independent Power Purchase (IPP) agreement as done with other plants.
“When we met the Prime Minister a month ago, we were informed that this was to be a merchant plant constructed and funded by the Chinese to serve their industrial zone, however, that has changed and instead this plant would operate just as Norochcholai does,” Convener of the CEB Engineers Union, Athula Wanniarchchi said.
He said the government is considering an unsolicited bid and would include the ‘Swiss Challenge’ to build this proposed plant, which is not included in the approved Long Term Generation Plan prepared by the CEB and approved by the Public Utilities Commission of Sri Lanka (PUCSL).
The ‘Swiss Challenge’ is a form of public procurement which allows for an unsolicited proposal by a company to the government to be made public, to allow other competitors a chance to match it. We’ve never heard of any examples of power plants being constructed under this module. In this instance, the Chinese would construct the plant based on their specifications and open it for bidders to quote,” he said, The Finance Ministry is said to have prepared the guidelines and the Cabinet has directed to the Treasury to include the Swiss Challenge procedure as government procurement guidelines for handling unsolicited project proposals in all sectors.