Govt. ignores warnings, goes ahead with Sampur

By Ifham Nizam

 Despite claims, by energy sector experts, that Sri Lanka would lose between Rs. 10 billion and Rs. 14 billion annually, the government will go ahead with the controversial Power Purchase Agreement (PPA) of the 500 MW Coal Power Station in Sampur, Trincomalee.

Senior Ceylon Electricity Board (CEB) engineers told The Island yesterday that a unit of electricity produced at Sampur would cost Rs. 18.00 as against Rs. 13.00 from the first coal powered plant at Norochcholai.

"Even Rs. 13.00 at Lak Wijeya 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 the country did not need to rush for a plant of this nature because already plans were underway to set up the second and third plants at Norochcholai. In other words, within the course of next year, the country would have an additional 600 MW.

The Island learns that electrical and mechanical engineers had expressed their concern on the cost factor. However, they had been asked to resign if they were not happy with the deal, sources said.

Power and Energy Minister Pavithradevi Wanniarachchi and Ministry Secretary M. M. C. Ferdinando, during a discussion at Temple Trees yesterday, highlighted the bilateral relations of both India and Sri Lanka and the need to push the project faster without further delay.

The largest power generation utility of India, National Thermal Power Corporation Limited and the CEB, on September 5, 2011, signed the joint venture and shareholder agreement to set up a USD 500 million 500 MW (2X250 MW) coal power station in Sampur, Trincomalee.

The 50-50 joint venture began construction at Sampur in late 2012 and the power plant is expected to be commissioned in 2016.

The Memorandum of Understanding was signed in the presence of former Power and Energy Minister Patali Champika Ranawaka, High Commissioner of India Ashok K. Kantha, Power Ministry, Secretary P. Uma Shanker and Power and Energy Ministry Secretary M. M. C. Ferdinando in 2011.

NTPC – the largest power producer and ranked third in Asia – had signed an agreement overseas and the Sampur plant is said to be one of the most environment friendly projects.

NTPC had repeatedly assured that maximum expertise – technological transfers –would be imparted to Sri Lanka through the latest venture.

The Indian Government had offered a concessionary line of credit of USD 200 million to the Sri Lankan Government to fulfill its commitments under the implementation agreement, including the construction of a jetty at Sampur and transmission lines from Sampur to Habarana.

NTPC had come 341st in the 2010 Forbes Global 2000 ranking of the world’s biggest companies. The total installed capacity of NTPC is 34,854 MW, with 15 coal-based and seven gas-based power stations and six joint venture power projects located across India. In the financial year 2010/11, NTPC had a total income of nearly Indian Rs. 570 billion or nearly USD 12.5 billion and an after tax profit Indian Rs. 90 billion or USD two billion.

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