Wednesday, 7 August 2013 00:00
NTPC’s first overseas project is set to see the light of day. The Sri Lankan Attorney General’s office has approved its proposed 500 megawatt thermal power plant in Sampur, Trincomalee, to be built in association with the Ceylon Electricity Board, around six years after the project was conceived and two years after a joint venture company was formed to take it forward.
The AG’s go-ahead was a major success for the project, particularly considering that the two neighbouring countries are not on the best of terms.
“With the AG’s office giving the go-ahead, the approval from the Power Ministry is expected soon, while a revised Power Purchase Agreement has been worked upon,” said an NTPC official. The project is estimated to cost about $ 500 million (3,000 crore), with NTPC and the Ceylon Electricity Board having a 50% stake each. It is to be funded with a debt equity ratio of 70:30.
The plant would use imported coal and consists of a transmission line, to be built from Trincomalee to Madurai, including 39 kilometres of submarine cable. But hurdles remain, with some alleging undue benefits were granted to NTPC. Though the charges are unsubstantiated, the high cost of power remains a sore point.
In fact, Coalition Against Corruption, an affiliate of Transparency International, had charged that the power plant would incur a loss of Rs. 76 million per year. “We urge the Government to forthwith annul the proposed Sampur power project,” it had said. Officials of Ceylon Electricity Board in fact have alleged that each unit of power produced at the joint venture project would cost Rs. 18, much higher than the cost of Rs. 13 from for a similar project at Norochcholai.
There were also disagreements over the high heat rate – signifying higher consumption of fuel to produce a unit of power, and the maintenance cost. The heat rate has been brought down to an acceptable level by the parties, NTPC officials said.