You are on page 1of 24

Deals and deals: behind procuring

emergency power

Eyebrows have been raised as to why the five-member Ministerial Committee


headed by Prime Minister Ranil Wickremasinghe, that was appointed by the
Cabinet of Ministers to propose urgent remedial measure to avoid power cuts,
took a decision on April 10, 2019 to announce an emergency situation in the
country and gave permission to the Ceylon Electricity Board to procure
emergency power, when the country was not facing an emergency situation.

 All three bidders agreed to provide supplementary power at their


selected sites for six months
 This Ministry will take action to obtain covering approval of the cabinet
to award the contracts
 It’s learned that the CEB report had been submitted to the subject
Minister

14 June 2019

It is alleged that the sole reason to go for procuring emergency power is a


direct consequence of the CEB and the line ministry’s failure to implement
the Least Cost Long Term Generation Expansion Plan (LCLTGEP) 2015-

2034.
It is alleged that this decision had been taken to procure 200MW from Turkey
without calling tenders at a much higher price than that of the prices the CEB
is now in the process to procure 100MW from three selected companies after
competitive bidding. These three companies are from the UK, Dubai and
Hong Kong.
According to the documents this newspaper is in possession of, these three
companies have agreed to supply electricity for six months within the price
range of Rs.28.43 to Rs.30.63 per kW, although the proposed plan by the good
governance administration to procure 200MW from M/s Karadeniz Holdings
from Turkey under an emergency situation is approximately Rs.35 per kW
including government taxes.
According to Sri Lanka Electricity Act, when the Cabinet determines that
there is an emergency situation it warrants procuring of emergency power, at
least cost, and allows the Ceylon Electricity Board (CEB) with the approval of
the Public Utilities Commission of Sri Lanka to procure emergency power
bypassing Government procurement guidelines.

Considering a Cabinet memo no: 19/1263/113/040-1 dated April 20, 2019,


presented to the cabinet by the Ministry of Power and Energy, the Cabinet of
Ministers had granted approval ( No: 19/1283/102/024-1 dated April 26, 2019),
to purchase emergency power from the Turkish ship mounted power plant
(Powership). Although it was decided that the maximum price that could be
paid was Rs.26 per kW, the Turkish supplier has agreed to supply at a rate of
Rs.24.984/kW considering the exchange rate as Rs.180/ 1 US$.
However, subsequently to this decision, Minister Ravi Karunanayake has
presented yet another cabinet memo, seeking cabinet’s consideration to
amend paragraph 2 of the earlier cabinet decision as, the maximum net price
(inclusive of taxes) per unit of electricity to Rs.26.20 provided that the taxes
applicable for the import of Heavy Fuel Oil (HFO) should not be increased
from the present prices and the exchange rate should not increase more than
Rs.180 per 1 US$. In the said memo, a request has been made to direct the
Ministry of Finance to grant exemptions of payment of applicable taxes to
import HFO for the above project or authorize the CEB to pay any applicable
taxes.
“Initially the Government wanted to show that they are procuring power at a
lesser price than the prices the maximum rate the cabinet has decided on.
Then it was increased to Rs.26.20 inclusive of taxes. A request had also been
made to exempt other applicable taxes to import HFO or to instruct the CEB
to pay the applicable taxes. If these taxes are added to the unit cost of
Rs.26.20, the rate would be more than Rs.35/kW. The Cabinet of ministers
would give the concession to the Turkish company but the burden of these
applicable taxes has to be borne by the taxpayers,” a Senior CEB official told
the Daily Mirror.

It was in 2016 the CEB for the first time


purchased a capacity of 155MW emergency power also known as
supplementary power to meet the then demand. As emergency power
procurement in 2015 was costly, a plan was introduced to implement low --
cost power plants to meet this ever-increasing power demand to which the
PUCSL had given its permission. But however, Neither the CEB nor the
Ministry of Power and Energy took initiatives to implement these low-cost
plants and since 2016, emergency power procurement at a high cost has
grown from 155MW to 720MW by 2019.
According to the statistics available, 155MW had been purchased in 2016
while 180MW had been purchased in 2017, 320MW in 2018 and the latest
plan is to purchase 720MW for 2019.
“The failure to implement the low-cost power plants under the Least Cost
Long Term Generation Expansion Plan (LCLTGEP) 2015-2034 has seen a
drastic increase in emergency power purchase since 2016. Had the CEB
implemented this plan, we could have purchased low-cost electricity by now
without burdening the power crashed national coffers,” a former Senior CEB
Engineer said.
"PUCSL is facing greater difficulty to analyse and determine the gap between
the exact demand and the supply"

The prices of the three bidders from the UK, Dubai and Hong Kong are -
lowest bid submitted for 24MW for Pallekele Grit Sub-station for six months
was M/s Aggereko International Project Ltd; of Glasgow, Scotland, the UK
for Rs.30.20 per kW. 10MW for Galle Grid Substation was M/s Aggereko
International Project Ltd; of Glasgow, Scotland, the UK for Rs.30.20 per kW,
10MW for Mahiyangana Grid Substation was M/s Altaaqa Alternative
Solutions; of Dubai, UAE for Rs.30.58 per kW, 08 MW for Polonnaruwa Grid
Substation was M/s Altaaqa Alternative Solutions; of Dubai, UAE for
Rs.30.63 per kW, 24MW for Hambantota Grid Substation was M/s V Power
Holdings Ltd; of Hong Kong for Rs.28.43 per kW and 24MW for Horana
Grid Substation was M/s V Power Holdings Ltd; of Hong Kong for Rs.28.70
per kW
It is in this backdrop, the cabinet of ministers has given the approval to
procure 200MW emergency power based on an emergency situation without
following procurement guidelines from Turkish ship mounted power plant
(Powership) from M/s Karadeniz Holdings for six months, which will cost the
country approximately a staggering Rs.15 billion.
On 11 April 2019 Karadeniz Holdings has submitted a proposal for the
immediate supply of 200MW power ship. On the same day, Prime Minister
Wickremasinghe in a confidential note to the Cabinet requested its approval
to announce a calamity situation in the country to make way for the CEB to
purchase power from the Turkish Company on an emergency basis without
calling tenders.

The confidential note dated April 11, 2019, to the Cabinet (Ref:
PMO/NC/12/2019) under the heading- Measures to be taken to overcome the
challenges in the provisions of an uninterrupted power supply and
continuation, Premier Wickremesinghe states that under his chairmanship,
the Ministerial Committee has decided to determine that there is an
emergency situation and there is a need to procure emergency power for an
uninterrupted power supply.
The letter further states, ‘Reference is requested to the cabinet decision no:
19/1185/113/040 dated April 9, 2019, which appointed a Ministerial
Committee under my Chairmanship to submit recommendations to the
cabinet on the measures to be taken to overcome the power crisis.
‘Accordingly, the Ministerial Committee met on April 10, 2019 and decided to
determine that there is an emergency situation under Section 43(4)(c)(ii) of the
Sri Lanka Electricity (Amendment) Act No: 31 of 2013 which compels the
Minister of Power, Energy, and Business Development to purchase emergency
power.
‘The relevant Section of the Sri Lanka Electricity (Amendment) Act No: 31 of
2013 states, ‘to meet any emergency situation as determined by the cabinet of
ministers during a national calamity or a long term forced outage of a major
generation plant where protracted bid inviting process outweighs the potential
benefit or procuring emergency capacity required to be provided by any
person at least cost’.
"In 2016, the PUCSL had forecast a possible power shortage in 2018/2019, as
none of the major power plants identified in the LCLTGEP except for the
Norochcholai, Colombo Barge and few other hydropower plants have not
even started commencing the construction work"

‘Submitting for covering approval of the Cabinet of Ministers. A copy of a


letter sent by the Hon. Minister of Power and Energy and Business
Development in this regard is also attached herewith. Ranil Wickremesinghe,

MP, Prime Minister’.


On January 11, 2019, Ministry of Power, Energy and Business Development
through a Cabinet Memorandum (No: 05/2019/PB), has sought cabinet
approval to procure 100MW emergency power. By cabinet decision No:
19/0173/113/001 dated January 14, 2019 approval had been granted to
procure the said supplementary electric power following procurement
procedure.
However, Minister Ravi Karunanayake on March 6, 2019 had informed the
Cabinet of Ministers that the Ministry does not intend to procure additional
power although cabinet approval has been received as they were expecting to
manage the country’s power situation, but had later sought permission to
reactivate the tender that was called for in January in order to procure
electricity due to the then prevailing power situation.

Subsequent to this move, by letter dated March 29, 2019, to the Chairman and
General Manager CEB by Secretary Ministry of Power, Energy and Business
Development Dr. B.M.S. Batagoda states that the Cabinet has authorised him
to grant approval to award the contract to the selected bidders subject to the
covering approval for the Cabinet of Ministers.
The letter states: ‘Supply of 100MW of Supplementary Electrical Power to
CEB on a short term basis for 6 months to mitigate the power shortage
envisaged due to insufficient power generation to the system
‘This has reference to the Cabinet Memorandum No: 05/ 2019/ PE dated
January 11, 2019, and the Cabinet decision No: 19/0173/113/001 dated
January 14, 2019, on the above procurement.

‘The Cabinet has authorized the Secretary to the Ministry to grant approval
to award the contract to the selected bidders subject to the covering approval
for the cabinet of Ministers. On March 6, 2019, Hon. Minister has informed
the Cabinet that the Ministry does not intend to procure additional power on
short term basis as decided by the cabinet at its meeting held on January 22,
2019, expecting to manage the power situation without procuring
supplementary power.
‘However, with the experience, we had during these two weeks power
situation further aggravated which resulted in power cuts. The Government
policy is not to allow power cuts at any cost. The people are very unhappy
about the power cuts situation and criticizing the government, Ministry and
the CEB. This is very bad for the power sector. Already the impact of the
economy during the last few days of load shedding is very severe, particularly
the loss of confidence in investors. Therefore on March 26, 2019, it was
decided at the Cabinet Meeting to take all measures to avoid power cuts. The
cabinet also appointed following committee- Ministers Ravi Karunanayake,
Kabir Hashim, Daya Gamage and Dr. Harsha De Silva to propose urgent
remedial measures to avoid power cuts.
‘Based on these decisions the Prime Minister convene a meeting with the
committee on March 27, 2019, at the parliament complex with the
participation of officials of the ministry and CEB.
"It is in this backdrop, the cabinet of ministers has given the approval to
procure 200MW emergency power based on an emergency situation without
following procurement guidelines from Turkish ship mounted power plant"

‘At this meeting, it was decided to take all possible measures as decided by the
Cabinet including the reactivation of the suspended procurement of 100MW
supplementary power. The Minister instructed to procure this 100MW for six
months even though tenders called for one year. Since this is national
importance to avoid power cuts this ministry convened a meeting on March
28, 2019, with recommended bidders to supply 100MW supplementary power.
‘All three bidders agreed to provide supplementary power at their selected
sites for six months. Accordingly, you are hereby authorized to issue letters of
intent and sign the power purchase agreements with the following investors
for a six month period at the terms and conditions which they have agreed.
‘Since cabinet has originally authorized this ministry to award the contracts
subject to the covering approvals of the Cabinet. This Ministry will take
action to obtain covering approval of the cabinet to award the contracts.

‘the cabinet has approved to undertake this procurement under Section 43.4
(C)(ii) of Sri Lanka Electricity (Amended) Act No: 31 of 2013 so that there is
no necessity for calling tenders. However please inform the PUCSL on this
procurement which is made as an emergency power procurement. Dr. B.M.S.
Batagoda.
Meanwhile the CEB issuing a report dated April 11, 2019, sent it to the
subject Minister on immediate power requirement and possible
interconnections, for necessary actions to cater the supply shortage for the
years 2019- 2021.
It further states: ‘The approved Least Cost Long Term Generation Expansion
Plan (LCLTGEP) 2015-2034 has identified 1x300MW natural gas operated
combined cycle power plant to be commissioned by 2019. Also, the approved
LCLTGEP 2018-2037 has identified the requirement of having 1x300MW
natural gas operated combined cycle power plant to be commissioned by 2019
and 2021 respectively.

‘The approved LCLTGEP 2018-2037 consist of 320MW reciprocating


engines in the power system. In the same plan, contingency analysis was
carried out considering the simultaneous occurrence of risk events such as
implementation delays, very dry hydro conditions, long outage of major
power plants and high demand. The results of this analysis show that an
additional capacity of 150MW is required for the year 2019.
‘However, due to the delays of implementation of 300MW LNG power plant
in Kerawalapitiya by 2019 has created the requirement of 470MW in 2019 as
an immediate capacity shortage.
‘Assuming that 2x300MW LNG plants commissioned by 2022, a separate
contingency analysis has been conducted and following capacity requirements
are identified to enable stable supply in the year 2020 and 2021. The
requirement for 2019 is 470MW out of which 170MW already existing while
100MW supplementary power under procurement and balance 200MW is
required. The year 2020 and 2021 requirements are 195MW and 105MW
respectively’.
It’s learned that the CEB report had been submitted to the subject Minister
and the Ministerial Committee’s decision to declare an emergency situation in
the country had been taken following a proposal presented to the Ministry of
Power and Energy by M/s Karadeniz Holdings of Turkey to supply 200MW
by Turkish ship mounted power plant (Powership) with a letter of
endorsement by the Turkish Ambassador to Sri Lanka in the first week of
April.
Meanwhile by letter dated April 22, 2019, Chairman CEB, R. Jayawardena to
General Manager CEB says that after a detailed discussion at the Board
Meeting, held on same date, approval had been granted to commence
negotiations with M/s Karadeniz Holdings with the objective of entering into a
power purchase agreement enabling CEB to procure 200MW of capacity
offered by the said company in its proposal dated April 11, 2019.
According to CEB Board Paper dated April 12, 2019 (Ref: AGM/TR/2/2), the
tariff proposed by the Turkish company is US$ 0.1388 per kWh or LKR
24.984 per kW at which rate the estimated cost of power purchase for a period
of six months will be approximately Rs.15 billion.
Forecasting a power shortage
Although the Public Utilities Commission of Sri Lanka (PUCSL), which is the
regulator for the electricity industry in the country has advised the CEB since
2016 to implement the approved Least Cost Long Term Generation
Expansion Plan (LCLTGEP) 2015-2034, the official documents this
newspaper is in possession shows as to how the CEB has systematically
delayed implementation the said plan. In 2016, the PUCSL had forecast a
possible power shortage in 2018/2019, as none of the major power plants
identified in the LCLTGEP except for the Norochcholai, Colombo Barge and
few other hydropower plants have not even started commencing the
construction work.
CEB’s failure to abide by the PUCSL directives, made its Chairman Saliya
Mathew to send a letter on November 18, 2016, to General Manager CEB,
Y.M. Samarasinghe, to submit the reasons for the non-compliance with the
least cost long term generation expansion plan 2015-2034 and that this delay
would result in failure to meet the electricity demand during the 2017-2020
period.

As there was no proper response from the CEB, the PUCSL has brought this
to the notice of the Sectoral Oversight Committee of the Parliament. When
the PUCSL informed this to the Cabinet Committee on Economic
Management by letter dated November 18, 2016, it had been referred to the
Sectoral Oversight Committee. As a result, line Ministry Secretary by letter
dated June 15, 2017, has requested the CEB to appoint project managers in
order to carry out the stalled work but nothing happened thereafter.
A Member of Parliament who is one of the members of the Sectoral Oversight
Committee of the Parliament told this newspaper that the reason for the non-
compliance of the LCLTGEP is solely because of a particular union in the
CEB. “There is a mafia in this sector. This union is powerful and work hand
in glove with many companies in the power sector and they want these
companies to get the power plant contracts. If these companies do not get the
tenders, this union takes every possible step to hinder the projects. In this
particular low-cost power plan project, the Parliament Oversight Committee
has unearthed the exact reasons for non-implementation of this plan. It is high
time that the Government calls explanation from these officers rather than
allowing them to ‘flourish’ by granting the necessary approvals to go ahead
with their goal- to procure emergency power,” the MP said.
Meanwhile, questions have been raised as to why the CEB Engineers Union is
accusing the PUCSL of sabotaging their plans to build new power plants and
that was the reason for them to restrict power supply before the Sinhala New
Year.

Highly reliable CEB official under the strict condition of anonymity told the
Daily Mirror that they are not surprised as to why the Ministerial Committee
on April 11, 2019, after granting permission to purchase 100MW following
tender procedure decided to determine that the country is in a calamity and
needs to purchase more emergency power. “We are neither facing a national
calamity nor a long-term forced outage of a major generation plant. The CEB
in one of its reports had informed the Minister that the immediate capacity
required to meet the country’s demand for the coming six month period is
470MW and need to procure this immediately to avoid power cuts. Why
couldn’t the Government in January take a decision to purchase a higher
capacity emergency power rather than going only for 100MW and a few
months later 200MW without following a tender procedure?
“It is a known fact that a certain high profile group in the CEB and the
Ministry do not want to implement the low-cost power plants though it is
beneficial to the country’s economy and the electricity consumers, but not
benefit them ‘personally’. Even the politicians know this well. In such a
background, why cannot this ministerial committee call explanation from
these officers who have failed to implement low-cost power plants since 2016,”
sources said.

Meanwhile DGM Eng. N.S. Wettasinghe has sent an e-mail to the President
CEB Engineers Union on May 3, 2019 asking what their stance is in procuring
emergency power from Turkish ship on short term basis whether the union is
withdrawing their TU Action with PUCSL of this procurement or accepting a
procurement carried out without a proper competitive tendering procedure to
which there was no response from the EU.
High cost of emergency power
Ceylon Electricity Board’s
(CEB) power purchase data shows clearly how costly emergency power is,
compared to the prices they could have purchased it from least-cost power
generation plants.
Chairman PUCSL Saliya Mathew’s letter to General Manager CEB, Y.M.
Samarasinghe further states, ‘The PUCSL approved the LCLTGEP on
September 15, 2016, and it is the sole responsibility of the transmission
licensee to adhere to approved LCLTGEP and take immediate steps to
implement it, given the criticality of the power supply during 2017-2020.
‘The Commission observes, that the transmission licensee has deviated from
the approved LCLTGEP according to the letter dated November 11, 2016.
Delay in implementation of the power plants from the approved LCLTGEP
will result in failure to meet the electricity demand during the 2017-2020
period.

‘The Commission wishes to draw your attention to Section 24 of Sri Lanka


Electricity Act No: 20 of 2009 (as amended) and condition 30 of Electricity
Transmission and Bulk Supply Licence no: EL/T/09-002 issued by the
Commission, in fulfilling the duties as the Transmission Licensee.
‘Therefore the Commission directs Transmission and Bulk Supply Licensee
No: EL/T/09-002 to-
(i) Provide reasons for the deviation from the approved LCLTGEP for each
and every power plant
(ii) Provide a report on the impact of the power situation during 2017-2020
due to deviation from the approved LCLTGEP
(iii) Provide solutions/ proposals in meeting the electricity demand, in the
event if there is an impact on continued power supply due to the deviation
from the approved LCLTGEP during 2017-2020 period

(iv) Provide evidence to the Commission that Transmission Licensee is not


likely to contravene Section 24 of Sri Lanka Electricity Act No: 20 of 2009 (as
amended) and Condition 30 Electricity Transmission and Bulk Supply
License No: EL/ T/09-002
You are hereby requested to submit the requested information on or before
November 29, 2016’.
According to the PUCSL data, the delay in implementation of each power
plant by the CEB is as follows-
The LCLTGEP 2015-2034 (Ref: PUC/LI/TL/2016/38) has been approved on
September 15, 2016, and the major power plants given below were to be
commissioned onthe given dates. According to CEB letter dated November 11,
2016 (Ref: AGM (CS)/ DGM (CSRA)/GEN/4) these plants were expected to be
completed on the given dates.

"It is high time that the Government calls explanation from these officers
rather than allowing them to ‘flourish’ by granting the necessary approvals to
go ahead with their goal- to procure emergency power"

(i) 100MW furnace oil-fired power plant 1, was to be commissioned on


January 2017 and expected to be completed by December 2018 (yet to
implement the work).
(ii) 70MW Furnace oil-fired power plant 1, was to be commissioned on
January 1, 2017, and was expected to be complete by December 2018 (yet to
implement the construction work).
(iii) 35 MW Broadlands Hydropower plant was to be commissioned on
January 1, 2018, and expected to be complete by June 2019 (yet to start the
work)
(v) 100MW Mannar Wind Park Phase 1 power plant, was to be commissioned
on January 1, 2018, and expected to be completed by July 2019 (not yet
commenced the construction)
(vi) 2 x 35 MW gas turbine power plant was to be commissioned on January 1,
2018, and expected to be completed by June 2018 (yet to start the construction
work).
(vii) 1 x35MW gas turbine power plant, was to be commissioned on January 1,
2019, and expected to be completed by June 2019 ( yet to start the work) and
(viii) 1 x 300 MW natural gas-fired combined cycle power plant, was to be
commissioned on January 1, 2019, and expected to be completed by June 2020
(yet to commence the construction work).

It was at this stage, Director General


PUCSL, Damitha Kumarasinghe by letter dated March 31, 2016 to Secretary
Ministry of Power and Energy, Dr. B.M.S. Batagoda, states that although the
CEB forecasts that the power generation is expected to grow at 5.5% per
annum during 2015-2022, in addition, to expect the peak demand to grow at
4.4% per annum, as per the PUCSL’s analysis considering the low reliability
of the Norochcholai coal power plant, the country could face energy and
capacity shortages during 2018/2019 and beyond under drought conditions
even with the planned plant additions.

National Demand Side Management Programme


It further states, ‘CEB has indicated delays in commissioning Sampur coal
power plant in 2021. Hence the Commission wishes to emphasise the need for
rigorous implementation of the National Demand Side Management
Programme, development of planned conventional power plants on time and
expedite grid integration of planned renewable energy based plants in order
to evade the possible shortages in 2018/2019’.
President CEB Engineers Union, Saumya Kumarawadu refuting allegations
levelled against the Engineers Union on its involvement in the delay in
implementing the low-cost power plants, accused the PUCSL of not granting
the necessary approvals on time.
“PUCSL granted their approvals for the LCLTGEP 2015-2034 in 2018
although the CEB made several requests from 2016. That is the reason for the
delay in implementing these power plants,” Kumarawadu told the Daily
Mirror.

When brought to his notice that this paper is in possession of letters


exchanged by the PUCSL and the CEB over the delay in implementing the
projects, and that there was no reference by the CEB that the delay was due
to PUCSL’s failure to grant the necessary approvals, but had pledged to
commission the operations within a stipulated time frame, Kumarawadu said
that the General Manager’s stand cannot be considered as the CEB’s stance.
“The GM is under pressure as he has to abide by what the politicians want
him to do. Hence what the GM writes is not the CEB’s stance. When the
politicians, the Power and Energy Ministry and the PUCSL is disrupting the
CEB, we cannot achieve our targets. It was only after we instigated trade
union action, that the PUCSL granted their approvals in 2018,” Kumarawadu
said.
When told that the member of the Sectoral Oversight Committee of the
Parliament alleged that the EU is a mafia and does not allow any project to
come up if its interested parties are not offered the tenders, Kumarawadu
refuting the allegations queried as to who was behind the awarding the tender
that was called to supply 50 diesel generator units, 25 step-up
transformer/switchgear units and 25 diesel fuel tanks to a company that did
not comply tender clauses.
“Was it the EU involved in it?” Kumarawadu queried.

He further said as to how members of two or three cabinet appointed tender


boards had to resign when tenders were called for the Kerawalapitiya power
plant as a result of political influence. “These politicians wanted to offer the
tender to a certain party. As a result, a few members of these tender boards
that were appointed by the cabinet had to resign. It was the same with the
Sampur Coal plant as well. It was to be commissioned in 2020/2021 but the
Power and Energy Ministry and the PUCSL got an Environmental NGO to
file legal action against the project and we had to stop it on a court order,”
Kumarawadu alleged.
Meanwhile, CEB Media Spokesman Sulakshana Jayawardena said that the
reason for the non-implementation of the LCLTGEP 2015-2034 which is
being reviewed once in two years is because of political, social and
environmental issues but not the CEB’s fault.
“For the Sampur project, we were to float tenders in 2016 but it had to be
called off due to the reasons I have given.
It was the same with the LNG power plant as well. For the Moragolla Plant,
the environmental organizations said that there are endangered fish species
and the project had to put on hold. The Mannar wind power project had to be
held due to some protests by environmental organizations. We are under
tremendous pressure and that was why we could not implement the
LCLTGEP 2015-2034 plan,” he added.

When asked as to why the CEB is planning to procure emergency power


without calling tenders from a Turkish company under the pretext of an
emergency situation when there is no such a crisis as of now, Jayawardena
said that it was based on a cabinet decision.
“If the country faces a power crisis we have to purchase emergency power,”
he said.
The proposed plan to procure 200MW emergency power from Turkey for a
higher rate comparing to the 100MW that is to be procured from UK, Dubai
and Hong Kong, Jayawardena said that Turkey’s prices are much lesser than
the prices submitted by the UK, Dubai and Hong Kong rates.
“The Turkey prices are Rs.26.20 per unit inclusive of taxes but the rates
quoted by the other three companies are much higher than the former,”
Jayawardena said.
When asked whether the prices, the UK, Dubai and Hong Kong companies
have quoted are including the applicable taxes, Jayawardena confirmed that
the quoted rates include the applicable taxes, but he could not answer whether
the given Turkish prices are including or excluding the government taxes.
"This union is powerful and work hand in glove with many companies in the
power sector"
Meanwhile, Director PUCSL, Jayant Herath said that the CEB as the
transmission licensee is responsible for procurement of generation plants and
added that although approvals have been granted for several long-term
generation plans, to date they have not been implemented for no reasons.
“After 2014, we have not seen a single mega plant that has been added to the
national grid. Some plants have been tendered. But selections are not being
finalized yet. Since 2016, CEB purchases power on a short term basis which is
costly. Delay in construction of low-cost plant pave the way for high-cost short
term energy purchases. CEB has to expedite the construction of plants in a
timely manner,” Herath added.
When asked as to whether the PUCSL will grant approval to procure
emergency power from Turkish ship, Herath said that the PUCSL need to
analyze the data such as current available capacity, demand, etc; to assess the
requirement of the additional power

“ Since May 2018, the Ceylon Electricity Board has not provided any data to
PUCSL. Therefore, PUCSL is facing greater difficulty to analyse and
determine the gap between the exact demand and the supply. There were
instances where we rejected the emergency power requirement due to non-
availability of electricity shortage as such. One classic example is the
emergency request in 2016. When the CEB requested to purchase 60 MW in
2016 on a short term basis, this Commission analyzed the data and sought for
clarification to identify the real need. In that process, CEB accepted that the
proposed short-term power purchase is not required. So, if we had required
data to analyse the current situation we could have assessed and verified the
said shortage without any delay and the process also will be very transparent
for anyone. CEB’s power plant procurement is guided through a transparent
process stipulated in the Sri Lanka Electricity Act. PUCSL, being the
regulator for the industry, is responsible for ensuring that the CEB purchases
power at the least cost because the cost of power purchases is borne by the
poor tariff consumer at the end of the day. According to Section 43 (2) and
section 43 (4) of the Electricity Act, CEB should obtain prior approval from
the regulator in order to procure any power plant. As of today, we have not
received a request to purchase emergency power from Turkey,” Herath
stated.
All attempts to contact Secretary Power, Energy and Business Development
Dr. B.M. S. Batagoda for a comment failed. Although a text message was sent
seeking a comment the Ministry Secretary till the paper went for
publication.
Posted by Thavam