Outdated agreement causes Rs. 8 b loss to CEB

• Potential for geothermal power plants

By Skandha Gunasekara

A loss of Rs. 8 billion had been incurred by the Ceylon Electricity Board (CEB) during the last five years as a direct result of the failure of the institute to amend its power purchasing agreement with the West Coast Ltd. power plant, Parliament was informed yesterday. 

UNP MP Ashu Marasinghe, during yesterday’s oral question session, pointed out that the agreement with West Coast Ltd. had to be amended four years ago and the CEB’s failure to do so had caused a loss accumulating to Rs. 8 billion since then. He remarked that according to official statistics the annual loss for the CEB as result of this failure was Rs. 2 billion. 

In response, Power and Renewable Energy Deputy Minister Ajith P. Perera said that a committee had been appointed to probe the issue and that West Coast Ltd. would have to settle the due amounts to the CEB.

“When the power plant was set up, the initial agreement was that we would revisit the power purchasing agreement a year later to renegotiate the price of a single unit. The agreement was to be amended after a test was carried out to ascertain a unit price. It had to be done but was delayed; we did not have enough experience in the field. This is a serious issue.”

The Minister said there were several thermal and renewable power plants in the Western Province supplying electricity to the CEB, namely the Sapugaskanda Power Plant, Kelanitissa Power Plant, Kelanitissa Combined Cycle Power Plant and Barged Power Plant which belonged to the thermal power complex of the CEB while Sojits Kelanitssa Ltd, Asia Power Ltd. and West Coast Ltd. were thermal power plants from the private sector selling electricity to the CEB. 

Superba Hydro Ltd, Vibhavi Hydro Ltd, Hulkiridola Hydro Power Ltd, KMRISMG Asset Company Ltd. and Dikkanda Plantations Ltd. were small sector power plants generating hydroelectricity belonging to the private sector, the Minister said. 

Disclosing to the House the power generation capacity of the power plants, the Minister said that the Sapugaskanda Power Plant produces 160 MW, Kelanitissa Power Plant 195 MW, Barged Power Plant 60 MW, Sojits Kelanitissa Ltd. 163-150 MW, Asia Power Ltd. 51 MW, West Coast Ltd. 270 MW, Superba Hydro Ltd. 0.500 MW, Vibhavi Hydro Ltd. 0.990 MW, Hulkiridola Hydro Power Ltd. 0.750 MW, KMRISMG Asset Company Ltd. 4 MW and Dikkanda Plantations Ltd. 0.080 MW. 

Meanwhile, raising a supplementary question, JVP MP Nihal Galappatti noted that a study had found potential in converting geothermal energy from hot springs to supply the national grid and that residents living near hot springs were relocating. 

“We are not against producing energy from renewable sources but there are complaints from people living near the hot springs. A study had been conducted to make use of the geothermal power of the hot water wells to produce electricity. Upon finding the potential of these natural hot springs, people have started moving away from those places. Some have commenced leaving the country too. Those people have put their complaints on Facebook,” the MP said. 

In response, the Minister said that such sources of renewable energy should be tapped and that the Government was open to proposals for a renewable energy project for hot springs.

“We should utilise this and tap into it. Anyone can come up with a technically sound proposal. If it is feasible to obtain electricity from geothermal sources we are ready to purchase electricity from them at the price of Rs. 23.10 per single unit. We are ready to help them with lands and other facilities but none have come forward so far. For those who are afraid of the ill-effects, we are ready to listen to them. Our offices are open. They could come to me any day, any time and I would look into the matter. There is no point in putting their complaints on Facebook. They should complain to us. We have called for tenders but so far only to purchase electricity produced from wind and solar power sources,” the Minister revealed.