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Viewing cable 06COLOMBO1425, GE KERAWALPITIYA POWER DEAL: MINISTRY OF POWER AND

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Reference ID Created Released Classification Origin
06COLOMBO1425 2006-08-30 12:49 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Colombo
VZCZCXYZ0001
PP RUEHWEB

DE RUEHLM #1425 2421249
ZNR UUUUU ZZH
P 301249Z AUG 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC PRIORITY 4166
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHNE/AMEMBASSY NEW DELHI 9901
RUEHCG/AMCONSUL CHENNAI 6831
UNCLAS COLOMBO 001425 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
COMMERCE FOR BRYAN LOPP AND EROL YESIN 
EB/CBA FOR TIM GILMAN 
 
E.O. 12958: N/A 
TAGS: EINV PREL CE
SUBJECT: GE KERAWALPITIYA POWER DEAL: MINISTRY OF POWER AND 
ENERGY WILL CONSIDER USG INTEREST 
 
REF: 08/29/06 RICHELSOPH-MOORE EMAIL 
 
1. (SBU) Summary and action request: CDA called Minster of 
Power and Energy Seneviratne on August 29 to express USG 
support for Lakdhanavi Private Limited's bid to build a 300 
megawatt power plant at Kerawalapitiya using General Electric 
equipment.  Seneviratne acknowledged that the Treasury 
Ministry was leaning toward the Mitsubishi bid following 
heavy lobbying by the Japanese government.  The Minister 
claimed to be unaware of U.S. (GE) interest in the Lakdhanavi 
proposal, and said that U.S. interest "would have to be 
accommodated" due to the "present political situation in the 
country."  Seneviratne offered to meet CDA September 5 to 
discuss the matter further.  Post requests further guidance 
from the Department of Commerce regarding advocacy in this 
case, preferably by Friday, September 1.  End summary and 
action request. 
 
2. (SBU) As instructed in ref email, CDA called Minster of 
Power and Energy Seneviratne on August 29 to express USG 
support for Lakdhanavi Private Limited's bid to build a 300 
megawatt power plant at Kerawalapitiya using General Electric 
equipment.  CDA noted the USG's understanding that the Ceylon 
Electricity Board had nominated Lakdhanavi to carry out the 
project.  Speaking by mobile phone because he was outside 
Colombo, the Minister responded that the Government of Sri 
Lanka (GSL) had evaluated both the Lakdhanavi and the 
Mitsubishi projects and that the Treasury Ministry was 
leaning toward the Mitsubishi bid.  Asked why, he replied 
"cost and feasibility," but added that heavy lobbying by the 
Japanese government had been influential as well.  Japan was 
a major donor to Sri Lanka and the government feared that 
foreign assistance from Japan could suffer if the contract 
was not awarded to Mitsubishi.  Further, Japan already had a 
"23 percent share of the electrical market."  (Note: It was 
unclear whether the minister was referring to Japanese 
equipment or funding.)  The Minister claimed to be unaware of 
U.S. (GE) interest in the Lakdhanavi proposal.  He said that 
U.S. interest "would have to be accommodated" due to the 
"present political situation in the country." 
 
3. (SBU) In response, CDA stressed that the USG wants 
selection to be made in a transparent and fair manner.  This 
would ensure that the most cost-effective and flexible means 
of power generation was selected.  Minister Seneviratne said 
he would discuss the matter with the Treasury Secretary the 
next day.  He said that he did not expect a final decision to 
be made in the August 30 cabinet meeting.  When asked, the 
Minister confirmed that Sri Lanka was offering a sovereign 
guarantee to back the commercial financing of the selected 
project. 
 
4. (U) Post notes that Minister Seneviratne was quoted in the 
Sri Lanka Daily News of August 30, 2006 saying that his 
ministry had prepared a Five Year National Plan on Power and 
Energy Development, which called for construction of the 
Kerawalapitiya plant to begin in September. 
 
5. (SBU) Comment and action request:  The GSL's consideration 
of Japan's role as a major donor and of the U.S. role in the 
"present political situation," makes it unlikely that the 
government will make a decision on the Kerawalpitiya plant in 
time to meet its targeted September start date for 
construction.  Post will attempt to learn whether the August 
30 Cabinet meeting produced any developments on the matter. 
Post will await further guidance from Commerce regarding 
advocacy and is prepared to meet with Minister Seneviratne if 
that is indicated.  Post requests guidance by Friday, 
September 1, in order to be able to request an appointment on 
September 5, the first day Minister Seneviratne said he would 
be available to meet. 
MOORE