145 hydropower projects worth Rs. 40 billion doomed!

* Developers allege Pradeshiya Sabhas demand money
* Claim could save Rs. 50 billion per annum with additional 250 MW

By Ravi Ladduwahetty

Clouds of controversy loom over the decision of the government to take over 145 hydropower projects developed by the private sector which have a collective investment of over Rs. 40 billion, raising a hornet’s nest among private sector developers.

This is indeed an absurd situation where they have taken over for no apparent reason and especially in contravention of government policy where the private sector had been allowed to develop projects under 10 MW, Immediate past President of the Small Hydro Power Developers Association Nishantha Nanayakkara charged at a news conference on Tuesday night.

The government had cancelled these projects which have a colossal investments claiming that they should have been developed within a year, which was not technologically or humanly possible, he alleged.

He also alleged that these cancelled companies were to be transferred to a limited liability company of the Ceylon Electricity Board and they were to be retransferred to henchmen of the government as the CEB was not going to be investing anymore funds with its already staggering losses.

He also said that the Small Hydro Power Developers Association is committed to the further development of 150 more Megawatts if the support of the government , which he said, would save the government Rs. 50 billion spent on thermal generation.

Immediate past Vice President of the Association Prabodha Sumanasekera, who with his father- the late Premasiri Sumanasekera commenced the first mini hydro power project in Sri Lanka under their firm Vidya Silpa with DFCC Bank funding in Hatton in 1996, said that he was not getting paid by the CEB for power sales at present. He said that his company had been paid Rs. 1.80 per unit and had been refused an increase up to Rs. 3.40 per unit by the CEB.

This is an absurd situation where the government is paying Rs. 60 per unit for emergency thermal purchases where the normal rate was between Rs. 16 and Rs. 25 and they are grudging us even the Rs. 3.40 per unit when it costs a minimum of Rs. 7.50 –Rs. 8 per unit under the cost based tariff, he alleged.

Meanwhile, Sumanasekera, addressing a power point presentation, said: " Today, the sector has developed into 94 operational plants with an installed capacity of 201 MW, feeding into the national electric grid from the start in 1996, adding small hydro power plants generate approximately 650 Million units of energy annually which accounts for over 6% of the annual electricity usage in Sri Lanka.

The "Mahinda Chintana – Idiri Dakma" envisages the supply of 10% of the national electricity requirement by renewable energy sources by 2015 and at least 250 MW more of Small Hydro can be developed by the Sri Lankan developers within the next few years.

He said that, In addition to the Rs 40 billion investment made , there have been jobs created where large number of jobs at construction sites numbering over 6000 and more than 2000 permanent operational jobs.

The World Bank has identified Sri Lankan Mini Hydro industry as the model to other countries in sustainable development. The world bank RERED is a re-finance line and brought FDI.

Annual foreign exchange saving of more than Rs.17.0 Billion on operational costs (otherwise be spent on oil import) and the Industry uses home grown technology, labour and material- about 2/3rd of the capital expenditure spent locally are some of the positives of the industry, he pointed out.

The world bank has identified Sri Lankan Mini Hydro industry as the model to other countries in sustainable development.

The technology used in Sri Lankan hydropower projects is significantly home grown. Few companies have now built up manufacturing capability of hydro-mechanical and electro-mechanical systems for small hydropower projects

A large group of engineers and technologists, have specialized in hydropower related services, and a number of companies have specialized in the design and development of small hydropower plants.

It is also redeeming to note that exporting technology has also been built with several Sri Lankan hydro developers now actively developing and contracting for small hydro projects especially in East Africa. Over 30 Megawatts of small hydro plants have already been built by Sri Lankans in East Africa. A further 100 MW of small hydro will be built by Sri Lankans in East Africa within the next three years

Also relevant in this context is that Sri Lankan factories are successfully supplying electro-mechanical plant and equipment into East Africa, competing with high quality Western plant manufacturers and Sri Lankan consultants, including the state owned Central Engineering Consultancy Bureau, are successfully designing and carrying out feasibility studies for small hydro projects in Africa.

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