Govt. to go ahead with controversial PPA

Energy sector experts claim Sri Lanka would lose about Rs14bn annually

The Sri Lanka government will go ahead with the controversial Power Purchase Agreement (PPA) of the 500 MW Coal Power Station in Sampur, Trincomalee in the Eastern province, despite claims by energy sector experts, that Sri Lanka would lose between Rs10 billion and Rs. 14bn annually, ‘The Island’ reported on Tuesday.
 
Senior engineers of the Ceylon Electricity Board (CEB) told ‘The Island’ that a unit of electricity produced at Sampur would cost Rs18 as against Rs13 from first coal powered plant at Norochcholai.
 
“Even Rs13 at Lak Vijaya in Norochcholai is high but if we could stick to that amount it would be better for the country in rupee terms,” a senior official said.
 
He said that since plans were already underway to set up the second and third plants in Norochcholai, the country did not need to rush for a plant of this nature, in other words, the country would have an additional 600 MW, within the course of next year.
 
Sources told ‘The Island’ that electrical and mechanical engineers who had expressed their concern on the cost factor, had been asked to resign if they were not happy with the deal.
 
The bilateral relations of both India and Sri Lanka had been highlighted, by Power and Energy Minister Pavithradevi Wanniarachchi and Ministry Secretary MMC Ferdinando, during a discussion at Temple Trees with President Mahinda Rajapakse, and the need to push the project faster without further delay.
 
National Thermal Power Corporation Limited (NTPC), the largest power generation utility in India and the CEB, signed the joint venture and shareholder agreement on September 5, 2011, to set up a US$ 500 million 500 MW (2X250 MW) coal power station in Sampur.
 
The 50-50 joint venture power plant which is expected to be commissioned in 2016 began its construction at Sampur in late 2012.
 
The Memorandum of Understanding (MoU) was signed in the presence of former Power and Energy Minister Patali Champika Ranawaka, High Commissioner of India Ashok K. Kantha, Indian Power Ministry Secretary P. Uma Shankar and Power and Energy Ministry Secretary MMC Ferdinando in 2011.
 
NTPC – the largest power producer and ranked third in Asia – had signed an agreement overseas and Sampur plant is said to be one of the most environment friendly projects, repeatedly assuring, that maximum expertise – technological transfers – would be imparted through the latest venture to Sri Lanka.
 
To fulfill its commitments under the implementation agreement, concessionary line of credit of $ 200 million had been offered by the Indian government to Sri Lanka, including the construction of a jetty at Sampur and transmission lines from Sampur to Habarana.
 
In the 2010 Forbes Global 2000 ranking, NTPC had come 341st of the world’s largest companies and its total installed capacity is 34,854 MW, with 15 coal-based and seven gas-based power stations and six joint venture power projects located across India.
 
NTPC had a total income of nearly Indian Rs570bn or nearly $ 12.5bn and after tax profit of Indian Rs90bn or $2bn.
 

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