Site for second coal power plant chosen

By Rohan Abeywardena

Facing impending acute power shortages, the Government has now surveyed a 500 acre block of land and is now in the process of securing it at Veloor, about nine kilometres north of Trincomalee town for the proposed Joint Venture 500 MW coal power plant between the Ceylon Electricity Board and the National Thermal Power Corporation of India.

But there already appears to be rumblings of future protests, possibly egged on by the LTTE and other interested parties. Official sources admitted that at least one organization has already written in sounding its concerns especially about the project endangering cultivations in the area.

Sources said those concerns were unfounded as the US$500 million plant would be constructed almost entirely in Government owned land in this sparsely populated and almost entirely barren brush land region in order to avoid any protests and resulting delays.

Earlier when the Government proposed that it be constructed at Sampur after the Memorandum of Understanding was signed between the two countries for the project in December 2006, the Indians backed out of that site following threats from the LTTE. Recently it was erroneously reported that it would be put up at Nilaveli, a few kilometres north of the site now being surveyed.

The project which is expandable to 1000MW is now expected to be completed in May 2012, about the same time as the first coal powered power plant at Norochcholai, the construction of whose 300MW first phase began in the latter part of 2007.

Sources however said the actual building work on the Veloor joint venture would take at least two more years to begin. In the meantime the Joint Venture and Power Purchase Agreements have to be finalized.

In the Joint Venture, the CEB and NTPC will each take an equity stake of US $75 million while the balance fund requirements are to be borrowed.

The joint venture will also have the responsibility to carry out a detailed feasibility study, provide an EIA compliant with Sri Lankan environmental standards, obtain finance, and implement the project.The Government on the other hand has to in addition to arranging the relevant land provide the venture with tax concessions under BOI laws, provide infrastructure facilities at Trincomalee for unloading of about 2.5 million tonnes of coal per annum required by the project and construct a 220kv line from Trincomalee via Habarana to Veyangoda/Kirindiwela