Will the new combined cycle power plant benefit the country?

Will the new combined cycle power plant benefit the country?

Will the new combined cycle power plant benefit the country?

Written by Keshala Dias

12 Apr, 2018 | 10:51 pm

COLOMBO (News 1st) – Power generators at two key power plants attached to the national grid are not in operation.

According to the Ministry of Power and Renewable Energy, two generators at the Norochcholai and Kelanitissa power plants have been shut down due to maintenance.

Recently, one of the units that restrict the release of toxic fumes from one of the generators at the Norochcholai Coal Power Plant malfunctioned. News 1st reported the manner in which fly ash mixed with material from the toxic fumes was released into the environment and its impact on the seas off the coast of the power plant.

The North-western Province Environmental Authority on many occasions has released instructions to the Norochcholai Coal Power plant with regard to environmental issues. The Authority says, despite calls for a technical report from the power plant, those responsible have failed provide one, adding that the respective units must be shut down if the impact on the environment needs to be minimised.

The Secretary to the Ministry of Power and Renewable Energy says the tender for the 300 MW combined cycle power plant proposed to be constructed in Kerawalapitiya, has been awarded to the Lakdhanavi power producer.

Sri Lanka called for tenders for the 300MW combined cycle power plant at Kerawalapitiya, and eight companies put forward their proposals. The tender process faced numerous obstacles since the very beginning and now it has been awarded to Lakdhanavi of which a majority share is owned by Lanka Transformers Limited.

Lanka Transformers Limited is a subsidiary of the CEB, of which the CEB has majority of the shares. Therefore, an issue arises as to how this tender was awarded at a time the evaluations were done by the Procurement and Assessment Committee of which the CEB had its representatives.

The most pressing issue is the country called for international tenders for the construction of this power-plant without adding another burden to the country. However, what is the advantageous situation that would arise by awarding the tender to a firm of which a majority share is held by a state-owned enterprise?

Previously, the tender for the construction of the 300MW Yugadhanavi Power Plant in Kerawalapitiya was awarded to West Coast Power Pvt Ltd which is attached to Lanka Transformers Limited. The project cost $294.8 million and a majority of the funding was from loans obtained at high-interest rates.

$200 million dollars was obtained from the Exim Banks of the US, Germany, Netherlands and France as well as from the UK branch of the HSBC. As such an issue arises as to how the funding for this new power-plant will be procured?

Over the recent days, trade unions and anti-corruption activists condemned the conduct of Ravindra Kumara Pitigalage and M.J.M.N Marikkar who are shareholders and board members of Lanka Transformers Limited and its associate companies.

Will the contract for the construction of the 300MW combined cycle power plant in Kerawalapitiya benefit the country?

Or is it a venture that will benefit some and cause a loss to the state?


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