Sri Lanka’s imported coal stock piles up amid Norochcholai power plant breakdowns
Sri Lanka’s imported coal stock piles up in huge quantities amid frequent breakdowns of Norochcholai power plant and the country stands to lose millions of rupees if the massive stock becomes unusable, Ceylon Electricity Board (CEB) engineers warned.
The 300MW coal fired power plant is not operating since January 10 due to technical defects and coal stocks are piling up as coal imports continue to beat the onset of monsoon, they said.
The CEB has spent an additional sum of Rs.25 billion to purchase power from private power producers due to breakdowns of the Norochcholai power plant.
Around 20 such breakdowns had been reported since its commissioning in July 2011.
Chairman and Managing director of state-owned Lanka Coal (Pvt) Ltd, Menaka Upali Liyanage told the Business Times that it is essential to stock coal before April due to rough seas for five months on the west coast.
He noted that the break down in the power plant was unexpected and another shipment of coal has already started unloading coal into barges in mid -sea and it will be transported to the jetty soon.
The coal stock piled up at the site could be used for test running of the second phase of the Norochcholai power plant which is expected to begin operations within a few months, he said adding that the coal stock pile up would not be a major issue as it was kept in a moist condition.
On the other hand, it can also be used for the second power plant once it starts generating power and for the first plant after repairing it.
However engineers were of the view that coal would lose its efficiency owing to moisture and the quality would also be deteriorated in the long run.
This high-moisture, highly volatile sub-bituminous coal will not only smolder but catch fire while in storage piles at power plants and coal terminals, they warned.
However Secretary to the Ministry of Power and Energy M.M.C. Ferdinando said that prompt action would be taken to make the Norochcholai power plant operational to generate a unit of electricity by coal is Rs.9 which cheaper than any other energy source.He added that the CEB needs to import coal and the ministry facilitates the importation process. “We cannot delay these requirements and that is why we have extended the coal contract of Nobel Resources Ltd, canceling the second tender which was not in conformity to the contract law.”
Rejecting allegations of tender ‘bending’, Mr. Ferdinando noted that the Cabinet in March 2010 decided to award the coal procurement tender for the power plant to Noble Resources Ltd. as the lowest evaluation bid of Holcim was erroneous.
However local commodity traders told the Business Times that these tenders were pre-planned, well designed, well coordinated frauds in which the winning party was pre-determined.
They alleged that the second coal tender was cancelled purposely to extend the contract given to Nobel Resources with involved officials saying the selected bidder Taurian Iron had no local agent and therefore was not qualified under the contract law. Speaking to the Business Times, Nobel Resources owner Ravi Wijeratne said that he is supplying high quality coal according specifications of the CEB and he received the contract following proper tender procedure. He said his company has not received any undue favour from government authorities.
He pointed out that he is obliged to supply coal on time in accordance with the agreement and the stock piling of coal was beyond his control.
Sri Lanka will use between 650,000 to 700,000 metric tonnes of coal a year for its first 300 MegaWatt coal power plant when it is in full operation.
Sri Lanka has imported 1.3 million tonnes of coal up to July 2013 after the coal plant started operations in July 2011. Nobel Resources will have to supply not less than 1 million metric tonnes in the next couple of years, Lanka Coal Chairman Mr. Liyanage revealed.