It was not my intention to promote a power plant but only to highlight the significance of the news item regarding the LNG operated Kerawalapitiya power plant stating that there would be no capacity charge levied in the proposed highly capital intensive project where the foreign direct investment was expected to be around US$ 600 million for the first stage.

Capacity charge is required to recover at least the capital and the cost of capital such as interest, dividend, etc. Where the Norachcholai Coal Plant or the Upper Kothmale hydro plant is concerned, the capital cost to be borne by CEB will be very high.

According to what was reported in the media, the LNG plant is being offered without any of these capacity related charges. As the project is associated with a respected Buddhist priest, I was constrained to believe that the statement was truthful. If it is the case then the entire plant comes as a gift to the people of Sri Lanka and there is no room for anyone to grudge that including the planning engineers of the CEB. All will know that the energy charge of a unit produced using LNG in a plant which has no capacity charge will be definitely lower than the unit cost of coal or hydro plant because they will have a relatively very high capacity charge. There is, no doubt, that such projects should be encouraged by all concerned. I believe that the Minister of Power and Energy John Seneviratne personally participated in the foundation laying ceremony obviously being aware of this windfall.

Engineer M. V. R. Perera has hinted that the capital recovery could be made through what is in small print in the Power Purchase Agreement such as by stipulating a very high annual minimum energy amount to be procured and imposition of penalty for every unit not procured out of the minimum stipulated energy amount or similar clauses. What Engineer Perera is hinting at is that the claim that there will be no capacity charge could be a deception.

I have, no doubt, that Minister of Power and Energy who is well experienced in such matters would not fall into such traps.