CEB-Ace Power deal causes a heavy loss to state coffers
View(s):Power purchasing deal between the Ceylon Electricity Board (CEB) and the Ace Power Embilipitiya (Pvt.) Ltd owned by Aitken Spence during the periods of power crises has caused a loss of billions of rupees to state coffers, Treasury sources revealed.
Power purchasing agreement with this private power provider has violated Sri Lanka Electricity Act bypassing government procurement procedures, a senior Treasury official alleged.
The country has lost a staggering sum of Rs. 4.7 billion due to power purchasing from this company since 2016, a recent Committee on Public Enterprises (COPE) probe revealed.
The Cabinet of Ministers has given its approval to CEB to acquire the Ace Power plant in 2016 after the expiry of a 10 year period of power purchasing agreement in 2016. However the CEB has deliberately desisted from acquiring the power plant and instead extended the power purchasing contract for three more years up to 2021, after an initial extension in 2016, without following proper procedures, COPE report highlighted.
The COPE report further stated the CEB could have been able to save Rs. 101 million if they acquired the ACE Power Embilipitiya paying the quoted price of Rs.2.635 billion. But now CEB has to pay Rs.2.736 billion till 2021 as investment cost as it is compelled to pay the capital cost, interest and return on equity and include it in the unit cost monthly.
ACE Power Embilipitiya had invested around US $ 18 million on the power plant.
The CEB has paid a staggering Rs.912 million to ACE Power Embilipitiya for the period 2016/2017 as capital investment and interest, CEB accounts showed
When the agreement was extended in 2017 once again another Rs.912 million had been paid as compulsory payment, totaling Rs.1.824 billion for the 2016 to 2018 period.
It has made a payment of Rs.850 million for the month of April 2018 with the special approval from the Ministry of Power and Renewable Energy, according to CEB statistics.
Secretary to the Ministry Dr. Suren Batagoda noted that although there were plans to acquire the power plant, the Technical Evaluation Committee and the Procurement Board had not agreed to it at the price quoted by the power plant owner.
Secretary to the “Dushana Vidu nethin” organisation, Engineer Anil Ranasinghe told the Business Times that his organisation has urged the Auditor General’s Department to complete their audit inspection into this corrupt deal and submit a report expeditiously.
COPE has already concluded that the power purchasing deal with Ace Power Embilipitiya had been tainted with corrupt practices and irregularities, he added.
(BS)