Mini Hydro power firm gets enjoining order against CEA

By S.S.Selvanayagam

The Colombo Commercial High Court issued an enjoining order restraining the Central Environmental Authority from interfering with the commissioning of Gurugoda Oya Mini Hydro Power Project.

High Court Judge Rohini Walgama issued this order until 26 November sequent to the litigation filed by Bhoruka Power Lanka Ltd.

The Plaintiff Company cited the Ceylon Electricity Board (CEB), Central Environmental Authority (CEA), its Director General Ramani Ellapola and its Director Kanthi de Silva as defendants.

Upul Jayasooriya with Farman Cassim instructed by Gunawardena & Ranasinghe Associates appeared for the Plaintiff.

Bhoruka Power Lanka (Pvt) Ltd had stated in its plaint that it submitted the preliminary feasibility study for a mini hydro power plant at Gurugoda Oya in the Kegalle District and that the CEB issued a letter of intent on 27 November, 2002.

It also stated that in order to obtain the environmental approval from the CEA, it had obtained water rights from the relevant Divisional Secretary of Galigamuwa and no objection letter from the Galigamuwa Pradeshiya Sabha as well as the minor irrigation clearance.

It said the CEA having fully satisfied itself in respect of the Environmental Questionaire and the Technical Committee’s assessment, decided that the project was environmentally feasible and the relevant licences and permits were in tact, granted project approval and issued environmental clearance certificate on 5 November, 2003 to the plaintiff Company.

The Company, consequent to obtaining the environmental approval from the CEA submitted it to the CEB and obtained a licence dated 14 July, 2004 to sell such energy exclusively to the CEB.

The Company, having obtained all clearances and licence, entered into a Power Purchase Agreement with the CEB and invested Rs. 238 million on the said project.

Having completed work on the project for the generation of hydro electrical energy, the said project was commissioned in April 2007 and the power energy was added to the national grid as per the power purchase agreement with the CEB.

The plaintiff complained that whilst the project was functioning and the repayment of loans to the banks was being effected smoothly, the Director General of the CEA by letter dated 1 December, 2006 abruptly ordered to cease operations of power generation.

The Company alleged that the Director General of the CEA maliciously and with a collateral purpose issued the said directive in order to sabotage the said project and stop the generation of power.

It also alleged that the CEA had shifted away from the original position it had taken up, and had embarked upon a voyage of discovery.

The Company complained that the CEA by letter 8 January, 2010 had informed the Plaintiff that its request to re-commission the project would not be considered and stated that the first ever power project of the Company would be put into jeopardy causing irreparable loss to the business reputation and the credibility of the Company.

The Company is seeking a permanent injunction from the Court restraining the CEA from interfering in the commissioning of the said hydro power project in order to supply power to the CEB as per the power purchase agreement.