Controversy surrounds this move because Lakdhanavi, a local company which made a lower bid for the project, was denied the tender. The power plant is to be built to generate 350 megawatts of electricity.
According to engineers attached to the Ceylon Electricity Board, the country will lose Rs.75 billion within a span of 20 years if the tender was awarded to a higher bidder.
According to reports the tender was awarded violating the due procedures to be followed in such cases. Earlier, the government was keen to award the contract to a Chinese company for setting up such a plant in Hambantota.
Power and Energy Minister Ravi Karunanayake obtained Cabinet approval for this project.
