Business Times

Sampur coal power project to proceed under Indian pressure

By Bandula Sirimanna

Despite differences of opinion of the top level authorities of Sri Lanka’s Power and Energy sector and issues concerning the resettlement of the displaced, the 500 MW Sampur coal power project is to proceed under Indian pressure, official sources said.

They said Indian High Commissioner to Sri Lanka, Ashok K. Kantha, has persistently pushed for the project ever since he was posted here, adding that India is exerting pressure on Sri Lanka to build a 283 km high voltage DC (HVDC) transmission line from Trincomalee to Madurai in Tamil Nadu, comprising 264 km of overland line and 39 km of submarine cable and to connect the grids of two countries. Indian embassy officials, who declined to be named, refuted claims of Indian pressure.

The coal power plant is a joint venture project between the Ceylon Electricity Board (CEB) and the National Thermal Power Corporation Ltd. (NTPC) of India. A Joint Venture Company (JVC) will be incorporated in Sri Lanka, with equal equity (50:50) contributions by NTPC and CEB, for implementing the power project.

The JVC upon incorporation will sign other agreements including a Power Purchase Agreement with the CEB, Board of Investment and an Implementation Agreement with the Government of Sri Lanka. These agreements have already been finalized, Power and Energy Minister, Patali Champika Ranawaka told the Business Times.

A feasibility study report on the project will be handed over to the Power and Energy Ministry soon.
Sri Lankan power and energy experts and the ministry will study the report before giving the green light for Ceylon Electricity Board (CEB) and National Thermal Power Corporation (NTPC) of India to go ahead with the project, the Minister said.

Minister Champika Ranawaka noted that international tenders will be called to purchase required parts of power generator including turbines, control systems, and boilers for coal-fired power plant.
All procurement and construction work will be carried out by duly selected contractors in a transparent tender procedure, he said adding that the Ministry will not award contracts to any party without calling for tenders.

He firmly said that no preference will be given to Chinese companies to supply and install power generators or any other part of the coal power plant. Land for the project shall be provided by the Government to the JVC on a long term lease.

The coal for the project shall be imported and supplied by Lanka Coal Company (LCC). The power generated shall be supplied to CEB through CEB grid system, he revealed. The construction of the power transmitting component and the jetty for the Sampur power plant will begin shortly Minister Champika Ranawaka said adding, that the construction of these were the responsibilities of Sri Lankan government

However, the Ministry of Power and Energy sources said that the original plan of developing the Sampur coal power project up to 3,600 megawatt in several stages has been curtailed and limited to 500 MW.
The construction is to begin this year and the power generation is to be linked to the national grid in mid 2016. The Sampur coal power plant project will get many benefits including priority status and tax exemptions after being recognized as a Strategic Development Project under the purview of Economic Development Minister Basil Rajapaksa.

This will be NTPC’s first overseas venture. It will also be India’s largest project with Sri Lanka.
India considers this project has a massive strategic significance as China has already made an entry into the country’s electricity sector, through Norochcholai coal power plant, official sources said.
India will offer a line of credit of $200 million to Sri Lanka for the joint venture project. Mr Ranawaka, responding to a query from the Business Times on the Indian plan to connect power from Trincomalee to India’s southern region, said it is impossible to connect the two grids and the 283 km high voltage DC (HVDC) transmission line and submarine cable project has not been finalized as yet.

The Tamil National Alliance (TNA), a major political party in the North, has said that several thousands of Tamil civilians were driven from their homes, which were razed to the ground making way for the power project. The vast majority still remain displaced. They accused the Sri Lankan government for pledging the land in Sampur to India to build a power-station on it, and designated it as another ‘High Security Zone’.

At the moment, people have been denied access to 2,795 acres of land demarcated for the coal power project, they alleged in a statement. Speaking to the Business Times, Deputy Minister of Resettlement Vinayagamurthi Muralitharan said that there are around 2200 people of Sampur still in welfare centres.
“Their lands were taken over by the government for the coal power plant. This has been gazetted unlike in the case of Mullaithivu. Therefore, there is no chance of them going back to Sampur,” he said.
The Cabinet has given approval to allocate Rs. 1800 million from the Treasury for the relocation of the displaced from Sampur and Mullaithivu.

“We have already received some amount from the Treasury, which will be used for relocation of the displaced to Kombavil,” he said. “These resettlement villages will contain all the basic facilities such as health centres and schools. We will make sure people will have access to all their basic needs,” he added.

With the increase in the dependence on coal for the generation of electricity, Sri Lanka’s carbon dioxide emission from the power sector is likely to increase to about 26 million tonnes (Mt)/year by 2020 under base case scenarios given in CEB’s long term generation expansion plans, whereas it has been only about 6 Mt/year in 2010 – a 333% increase, CEB officials said.

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