By Maheesha Mudugamuwa
The costly deal reached in between the Ceylon Electrical Energy Board(CEB )and ACE Power Embilipitiya, a personal power plant, has as quickly as once again got in the spotlight, as electrical energy experts declare that the country will have to rely on individual diesel power plants for a minimum of another 4 years.
The forecast is made thinking about the constant hold-ups in performing various currently authorized Liquefied Gas (LNG) power plants including the 300 MW Kerawalapitiya LNG power plant which is to be developed by Lakdhanavi Ltd.
. As found out by The Sunday Early morning, the power purchase agreement between Lakdhahanvi Ltd. and the CEB is yet to be signed, despite it being almost a year given that Cabinet okayed to the task.
As was reported in the paper in February this year, the Federal government gave the agreement to build the second stage of the 300 MW LNG power plant in Kerawalapitiya to Lakdhanavi Ltd., reversing a Cabinet choice made by the previous Federal government.
The aspect regularly provided by the state-owned CEB for going on with costly diesel power is the space between electrical power supply and demand, mainly as a result of the lack of state-owned power plants.
The CEB has in fact been singing the specific same tune over the previous 8 years, which is paradoxical considering the CEB itself need to be taking the sole duty to construct power plants in the country if they themselves anticipated that there will be a severe power crisis unless the necessary power plants are built.
The Sunday Early morning‘s efforts to get to the bottom of the constant delays in developing power plants exposed the following: The hold-ups was due to the fact that of the requirement of following due treatments, hold-ups by the appropriate authorities in authorizing the files, and a lot of significantly, the failure of the liable authorities to take stern choices.
“To establish a brand-new power plant, it will take another 3 years minimum and throughout that duration, the CEB will need to acquire power to fulfill the need otherwise it will need to enforce power cuts which is not the service” CEB Chairman Eng. Vijitha Herath
‘Govt. still peaceful’
“We believed that an administration under the assistance of President Gotabaya Rajapaksa will be able to take hard choices and accelerate the postponed processes, but it’s been a year due to the fact that he was picked and a new administration took control of the management, and a new power plant is yet to see the light of day,” Janatha Vimukthi Peramuna (JVP)-connected Lanka Viduli Sevaka Sangamaya (LVSS) President Ranjan Jayalal stressed.
He informed The Sunday Morning that the rulers would constantly go with the circulation, as there was no adjustment to any of the corrupt practices under the brand-new Federal federal government.
“The power deals are yet to be analyzed and power plants are yet to be built, however the crisis is still going on,” he regreted.
According to Jayalal, while the issues voiced versus these corrupt offers were acknowledged, none of the deals were analyzed or questioned by the authorities at the time.
“Still, we are waiting till these corrupt deals are exposed to the general public,” Jayalal remembered.
As gone over by the LVSS President, the offer reached in between the CEB and ACE Power Embilipitiya was one such corrupt offer due to which the CEB sustains many rupees in losses annually.
The CEB reached a deal to get power from ACE Power Embilipitiya for 3 years, starting with April 2018.
According to a Committee on Public Enterprises (COPE) report tabled in Parliament in 2015 by the then COPE Chairman MP Sunil Handunnetti, Rs. 76 million is paid monthly by the CEB to ACE Power at the rate of Rs. 1.29 per system as an ability charge.
As a result, the CEB would pay Rs. 2,736 million to ACE Power over 3 years– the duration of the contract.
COPE report on ACE Power
The COPE report exposed that ACE Power had actually provided to offer the power plant to the CEB for Rs. 2,635 million, however the deal was shot down.
COPE had then questioned regarding why the CEB did not buy the individual power plant when the expense would have been less than what the CEB would end up paying to obtain power for 3 years.
The report remembered that Ministry of Power and Renewable Resource Secretary Dr. Suren Batagoda had actually informed the Committee that at first, an arrangement had in fact been signed for the purchase of electrical energy from the Embilipitiya power plant for a duration of ten years, which expired in 2015, and as the plant might be utilized for an extra time period, federal government approval was sought for further purchases.
Accordingly, an evaluation was obtained from the Federal government Valuer, which was offered at Rs. 2,370 million, while the worth submitted by the owner of the plant was $ 17 million (Rs. 2,635 million).
It was likewise kept in mind that, though settlements were held, the owner did not consent to move the plant at the evaluation made by the Federal federal government Valuer.
As an outcome, short-term approval was authorized by the Cabinet for the purchase of electrical energy for a period of 6 months till action was required to get the mentioned plant; this was done taking into account the electrical power requirement at the time.
Following conversations with the owner, the arrangement was renewed on 2 occasions, in the beginning for one year as much as 2016 and as a result, roughly 2017.
Throughout this period, the Federal federal government’s policy was to stop any move to buy power plants and rather purchase only electrical power from private suppliers.
As an outcome, the agreement in between the CEB and ACE Power was extended by another 3 years with effect from April 2018.
The Committee had really mentioned that the yearly report of the establishment that owns the plant had actually exposed that it had actually published a revenue of Rs. 1.1 billion in 2016/2017 through the sale of electrical power at the Embilipitiya plant.
According to the Sri Lanka Electrical Energy Act, the CEB might buy power from the private sector only in an emergency situation circumstance, Jayalal specified, adding that the CEB’s leading management had actually extended the agreement with ACE Power, which had really been blacklisted by the Public Utilities Commission of Sri Lanka (PUCSL) for breaching the Electrical energy Act too.
Commenting even more on the controversial power purchase contract with ACE Power Embilipitiya, he worried that the leading management who earned commissions from the specified power plant had in some way encouraged the Government that the country would not get rain for another 3 years and because of that, buying power from the financial sector would be the very best solution.
Nevertheless, the three-year extended arrangement is to end next year.
New plants pending finalisation
When called by The Sunday Early morning, CEB Chairman Eng. Vijitha Herath stated the CEB had no alternative however to even more extend the plan next year after a thorough assessment and with a cabinet decision, as the CEB would absolutely have to obtain electricity from personal companies till a new power plant is constructed.
“To build a new power plant, it will take another 3 years minimum and throughout that duration, the CEB will require to acquire power to fulfill the requirement otherwise it will have to implement power cuts which is not the service,” he stated, adding that the only service to the existing crisis was to relocate to LNG power.
“We stay in the process of settling the documents work required for the construction and tendering of power plants, and when the LNG plant stays in place, expensive diesel power will not be needed,” he included.