Govt. urged to annul Sampur power project

Rs 763 million loss per year predicted

By Harischandra Gunaratna

The Alliance against Corruption, an affiliate of Transparency International, yesterday said that the proposed 500 Megawatt coal fired power plant at Sampur will incur a loss of Rs 763 million per year, once commissioned, according to current prices and each consumer would have to pay Rs 1,525 per year to recover the losses.

"We urge the government to forthwith annul the proposed Sampur power project as it is full of corruption and the citizens of this country will have to pay for the sins committed by the authorities," the Alliance said.

Saman Ratnapriya, a member of the alliance, said that to pave the way for the power plant, the government had rendered over 1,500 families homeless by acquiring 500 acres for the project and number of schools had been closed while places of religious worship had been demolished.

Ratnapriya, who is also the Government Nursing Officers’ Association member claimed that when tenders were called for the construction of the Norochcholai coal fired power plant, NTPC of India and CIMEC of China made bids, but though NTPC’s bid was the most feasible and cheapest, the government decided to award the contract to the Chinese company.

The COPE had found fault with Power and Energy Ministry and CEB officials for misleading them by submitting an erroneous corporate programme for 2009-2013 containing no information about 2013.

According to the agreement, the coal power plant would generate 500 megawatts of power (250 x2) and the government’s component of investment was 75 per cent of the total cost while the Indian company would contribute 75 per cent with US$ 350 million to be obtained as a loan provided by the Treasury where the total commitment would be US$ 500 million, he said.

The Alliance alleged that the then Power and Energy Minister John Seneviratne was unaware about the agreement and permission had not been sought from the CEB General Manager or the Directors when the agreement was signed.

This resulted in strained relations between the Sri Lankan and Indian governments and to appease the latter, the government awarded the Indian company the contract to construct the plant in Sampur.

The deal with India was an arbitrary decision by the Power and Energy Ministry and the agreement which was detrimental to the interest of the country was signed in India, Ratnapriya said.

Ratnapriya said that the CEB will incur an annual loss of Rs 2.6 billion to Rs 4.9 billion according to current prices since the institution has ignored the internationally accepted efficiency level of 40 per cent but decided on 32 per cent according to its feasibility report.

"The CEB will incur an annual loss of US$ 1.56 billion as the institution had projected the cost of maintenance of the plant as US$ 32.5 million and not US$ 20.5," he pointed out.

Joseph Stalin, a member of the alliance, said that the losses have to be recovered not from the Treasury but the corrupt officials responsible for the dubious deal.

He said that the Norochcholai coal fired power plant had broken down 21 times and when COPE officials visited the plant in November last year it had broken down for the 12th time, but officials told the members of COPE that it was only seven times.

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