India’s NTPC asked to shift power plant location

Sri Lanka has asked India to change the location of the proposed 500MW coal power plant to be built by the State-owned NTPC Ltd., a report said.

Sri Lanka has requested India to move the proposed $ 500 million project to set up the power plant from Sampur to Foul Point area in Trincomalee District of the Eastern Province.

The request was made by Prime Minister Ranil Wickremesinghe on his maiden overseas visit to India after taking charge in August.

This is the second time Sri Lanka has asked to change the location. In the first time in 2007 Sri Lanka requested NTPC to move the project site from the south of Trincomalee to the north.

Any change in the project’s location will require new studies to be conducted at the fresh site, potentially delaying the project by another two to three years, according to financial newspaper Livemint.

NTPC initially signed an agreement with the Ceylon Electricity Board (CEB) in December 2006 to set up the project with an investment of $ 500 million in a joint venture and the project was initially expected to be commissioned and start generating power in 2011. However, Sri Lanka and India finalised the deal in October 2013.

It was to be set up on a build, operate, own and transfer basis with a debt-equity ratio of 70:30. It was to have been NTPC’s first overseas project.

The long-delayed power project in Sri Lanka is part of India’s strategy to wield greater economic and strategic influence in South Asia by helping to develop infrastructure projects.

With substantial Indian investments already put into the project, there is growing doubt in New Delhi now about the Sri Lankan government’s seriousness to set up the project with India’s support.

The Sri Lankan Government’s concerns regarding the Sampur site include changes in local socioeconomic conditions due to settlements by the displaced Tamil population; its reluctance to give environmental clearance; and expected litigations going forward.

The spokesman for the Ministry of External Affairs has said that New Delhi is in touch with the Sri Lankan Government on the project and waiting for the environmental clearance for the project.