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Debate No 06 of 2015 (REVISED)

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Debate No 06 of 2015 (REVISED) 1 No. 06 of 2015 SIXTH NATIONAL ASSEMBLY PARLIAMENTARY DEBATES (HANSARD) FIRST SESSION TUESDAY 03 MARCH 2015 2 CONTENTS PAPERS LAID QUESTIONS (Oral) STATEMENT BY MINISTER BILL (Public) MOTIONS ADJOURNMENT QUESTIONS (Written) 3 Members Members THE CABINET (Formed by the Rt. Hon. Sir Anerood Jugnauth, GCSK, KCMG, QC)) Hon. Sir Anerood Jugnauth, GCSK, Prime Minister, Minister of Defence, Home Affairs, KCMG, QC Minister for Rodrigues and National Development Unit Hon. Charles Gaëtan Xavier-Luc Duval, Deputy Prime Minister, Minister of Tourism and External GCSK Communications Hon. Showkutally Soodhun Vice-Prime Minister, Minister of Housing and Lands Hon. Ivan Leslie Collendavelloo Vice-Prime Minister, Minister of Energy and Public Utilities Hon. Seetanah Lutchmeenaraidoo Minister of Finance and Economic Development Hon. Pravind Kumar Jugnauth Minister of Technology, Communication and Innovation Hon. Yogida Sawmynaden Minister of Youth and Sports Hon. Nandcoomar Bodha Minister of Public Infrastructure and Land Transport Hon. Mrs Leela Devi Dookun-Luchoomun Minister of Education and Human Resources, Tertiary Education and Scientific Research Hon. Anil Kumarsingh Gayan Minister of Health and Quality of Life Dr. the Hon. Mohammad Anwar Husnoo Minister of Local Government Hon. Prithvirajsing Roopun Minister of Social Integration and Economic Empowerment Hon. Marie Joseph Noël Etienne Ghislain Minister of Foreign Affairs, Regional Integration and Sinatambou International Trade Hon. Ravi Yerrigadoo Attorney General Hon. Mahen Kumar Seeruttun Minister of Agro-Industry and Food Security Hon. Santaram Baboo Minister of Arts and Culture Hon. Ashit Kumar Gungah Minister of Industry, Commerce and Consumer Protection Hon. Mrs Marie-Aurore Marie-Joyce Minister of Gender Equality, Child Development and Perraud Family Welfare Hon. Sudarshan Bhadain Minister of Financial Services, Good Governance and Institutional Reforms 4 Hon. Soomilduth Bholah Minister of Business, Enterprise and Cooperatives Hon. Mrs Fazila Jeewa-Daureeawoo Minister of Social Security, National Solidarity and Reform Institutions Hon. Premdut Koonjoo Minister of Ocean Economy, Marine Resources, Fisheries, Shipping and Outer Islands Hon. Jayeshwur Raj Dayal, CSK, PDSM, Minister of Environment, Sustainable Development and QPM Disaster and Beach Management Hon. Marie Roland Alain Wong Yen Minister of Civil Service and Administrative Cheong, MSK Reforms Hon. Soodesh Satkam Callichurn Minister of Labour, Industrial Relations, Employment and Training 5 PRINCIPAL OFFICERS AND OFFICIALS Madam Speaker Hanoomanjee, Hon. Mrs Santi Bai Deputy Speaker Duval, Hon. Adrien Charles Deputy Chairperson of Committees Hurreeram, Hon. Mahendranuth Sharma Clerk of the National Assembly Lotun, Mrs Bibi Safeena Deputy Clerk Ramchurn, Ms Urmeelah Devi Clerk Assistant Gopall, Mr Navin (Temporary Transfer to RRA) Hansard Editor Jankee, Mrs Chitra Serjeant-at-Arms Badal, Mr Ramesh 6 MAURITIUS Sixth National Assembly --------------- FIRST SESSION ------------ Debate No. 06 of 2015 Sitting of 03 March 2015 The Assembly met in the Assembly House, Port Louis at 11.30 a.m. The National Anthem was played (Madam Speaker in the Chair) 7 PAPERS LAID The Prime Minister: Madam Speaker, the Papers have been laid on the Table - A. Prime Minister’s Office – Certificate of Urgency in respect of the Finance and Audit (Amendment) Bill (No. I of 2015). (In Original) Ministry of Finance and Economic Development The Double Taxation Avoidance Agreement (Republic of Malta) Regulations 2015 (Government Notice No.14 of 2015). C. Ministry of Local Government – (a) The Municipal Council of Quatre Bornes (Fees for Classified Trade) (Amendment) Regulations 2015 (Government Notice No.15 of 2015). (b) The District Council of Pamplemousses (Fees for Classified Trade) (Amendment) Regulations 2015 (Government Notice No.16 of 2015). 8 ORAL ANSWERS TO QUESTIONS CEB - CT POWER PROJECT & ELECTRICITY SUPPLY The Leader of the Opposition (Mr P. Bérenger) (by Private Notice) asked the Vice- Prime Minister, Minister of Energy and Public Utilities whether, in regard to electricity supply and the CT Power Project, he will state - (a) if Government is going ahead with the project and - (i) if so, indicate the - (A) updated estimated cost and price of electricity, and (B) date on which the Ministry of Finance and Economic Development gave the green light therefor, and (ii) if not, indicate whether a tender for a 50/100 MW base load power plant will be issued; (b) if the report on Liquefied Natural Gas use will be made public, and (c) the measures being taken to remove obstacles in the grid to optimum use of renewable energy. The Vice-Prime Minister, Minister of Energy and Public Utilities (Mr I. Collendavelloo): Madam Speaker, in August 2001, the Ministry of Energy and Public Utilities commissioned a study for the setting up of a 100 MW Coal Power Plant at Pointe Aux Caves. The original project was that CEB was to build and operate this power plant itself. In 2005, CT Power (Malaysia) Ltd. made a proposal to the Board of Investment for a 2 x 55 MW pulverized coal power plant to be implemented by its subsidiary, the Mauritius CT Power Ltd. This was an unsolicited proposal. At that time, there was a committee called a “Fast Track Committee”. It was chaired by the then Prime Minister. The Fast Track Committee approved the proposal. In July 2006, the Board of Investment issued a Letter of Intent to the promoter. Immediately thereafter, the Central Electricity Board, on 26 July 2006, decided that negotiations be held with the promoter. This eventually led to the signature of a Power Purchase Agreement on 23 December 2008. On the same date, a Shareholders’ Agreement, a Coal Supply 9 Agreement and an Interconnection Facility Design and Build Agreement were concluded on the same date. No EIA licence had been obtained at the time these documents were signed. In January 2011, the EIA Committee decided not to recommend the issue of an EIA licence. The promoter appealed against this decision and the matter was taken up by the EIA Tribunal. Finally, in January 2013, the Tribunal gave its ruling in favour of CT Power. In January 2013, the Ministry of Environment issued the EIA licence to Mauritius CT Power Ltd. with 31 conditions including the transportation of coal by sea route. Condition 15 of the EIA licence required that the promoter should provide proof of its financial capabilities for the duration of the project to the satisfaction of the Ministry of Finance and Economic Development. On 23 June 2013, the Mauritius CT Power Ltd. submitted a revised project to satisfy the conditions of the EIA with the following changes - (i) the project value increased from USD192 m. to USD348m; (ii) the use of water treated at Montagne Jacquot treatment plant for cooling of the coal plant, and (iii) debt Equity split 70/30 instead of 80/20. In December 2013, the Central Electricity Board signed the amended Power Purchase Agreement (PPA) to incorporate the requirements of the EIA with the promise that the effective date of the PPA is subject to the signing of the Implementation Agreement. In April 2014, the Central Electricity Board signed the following amended agreements – (i) the Coal Supply Agreement providing for the supply of coal by sea route and the construction of a jetty by the Central Electricity Board; (ii) the Shareholders’ Agreement, and (iii) the Land Sub lease Agreement. A Mauritius CT Power Ltd. delegation visited Mauritius in January 2015 and met me as well as the Minister of Finance and Economic Development. They requested that the Implementation Agreement be signed. The Ministry of Finance and Economic Development asked CT Power Ltd. to submit a letter of comfort from its banks to confirm that it has the financial capacity to implement the 10 project, in accordance with the condition 15 of the EIA licence. As at today, the promoter has not met this condition. On 06 February 2015, Government has decided that the company should state its source of funding, within a reasonable delay, failing which the project would not be implemented. Up to now, no letter of comfort has been communicated. Insofar as my Ministry is concerned, it intends to recommend to Cabinet that Government does not go ahead with the project. With regard to part (a)(i) of the question, the updated estimated cost of the project is USD348 m. and the purchase price of electricity is Rs4.58 per kWh excluding coal transportation costs, estimated at 10cts per kWh and power transmission at 0.17cts. The price will change on the basis of an indexation formula over 20 years. With regard to part (a)(i)(B), the House is referred to what I have stated above. There has been no green light. As regards part (ii) of the question, the CEB would require additional generation capacity of 50MW in 2017 and 2018 respectively. The Central Electricity Board has taken the following decisions – (i) installation of 60MW fuel oil based engines at St Louis Power station, that is, 4 x 15MW; (ii) extension of the agreement with Consolidated Energy Limited, Beau Champ to generate 22MW for a further period of three years, and (iii) invitation of Expressions of Interest for the generation of energy from renewable sources, including biomass and waste to energy. With these measures, Madam Speaker, demand will be met within the short term until 2018. As regards the medium term, the World Bank is reviewing the capacity expansion plan based on updated economic conditions. The report is being finalised and is expected to reach us by the end of March. Based on the recommendations of the World Bank, a decision will be taken on the base load requirement as from 2018. I have impressed and I assure the House that the Central Electricity Board will resort to a transparent and competitive bidding process, contrary to past practices of opaque unsolicited 11 proposals, with clauses of confidentiality preventing disclosure of the agreements, and also, preventing public debates on these matters.
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