Sri Lanka and India are locked in a tug-of-war over the controversial coal-fired joint venture power generation project at Sampur near Trincomalee. Worldwide tenders for the supply of coal to start the project were due to be called as early as the end of this month. Sri Lanka is now seeking to replace the proposed [...]

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India non-committal on Sampur request

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Sri Lanka and India are locked in a tug-of-war over the controversial coal-fired joint venture power generation project at Sampur near Trincomalee.

Worldwide tenders for the supply of coal to start the project were due to be called as early as the end of this month.
Sri Lanka is now seeking to replace the proposed coal plant with an LNG (Liquefied Natural Gas) plant. A request for this switch-over was made last week by President Maithripala Sirisena when he had talks with Indian Prime Minister Narendra Modi at a dinner-meeting during a stop-over in New Delhi on his return from an anti-corruption summit in London.

Pointing out that the use of coal-power was becoming obsolete worldwide and that Sri Lanka wanted to move away from coal as an energy source, President Sirisena appealed for a change in the status of the Indian-backed Sampur project. Premier Modi had remained non-committal over the request. Though sections of the media claimed Premier Modi has accepted the request, the Sunday Times has learnt he did not express a view except to hear the Sampur: Lanka wants LNG, India coal Sri Lankan President making the appeal.

Indian officials and diplomats have contended that the 500 megawatt power project, for which an agreement has already been signed, should go ahead. They contend that they are amenable to listening to Sri Lanka’s position on the matter, but there would be an escalation of cost and extension of the time duration to complete the project should they switch to LNG. They content that India itself was moving towards LNG and they would find it difficult to justify opposing Sri Lanka’s request on environmental grounds.

A Joint Venture Company (JVC) of both India and Sri Lanka state concerns with equal equity will undertake the task. While the Ceylon Electricity Board (CEB) is the local partner, the Indian side is represented by the National Thermal Power Corporation Ltd. (NTPC).

Government sources concede that Sri Lanka’s move now to change the production process to LNG would necessitate the revision of the agreement. They said it would be possible only with the concurrence of the Government of India as it was already a “done deal”.

Indian official contended this week that India had incurred considerable expenditure in planning the coal-fired power project. They said this was done with the “full concurrence of the Government of Sri Lanka. To change it while it was about to be implemented is no easy task. It would mean that we have to re-start the process by evaluating how LNG would have to replace coal. That is a long-drawn process and will take time.”

Locally, the Sri Lankan Government leaders, including Prime Minister Ranil Wickremesinghe, have made clear they want to opt for LNG and not go ahead with coal as part of the energy mix for the future. This position has been strongly backed by Tamil National Alliance (TNA) leader Rajavarothayam Sampanthan and Sri Lanka Muslim Congress (SLMC) leader Rauff Hakeem mainly on environmental grounds as the proposed coal fired plant is situated in the vicinity of their constituencies in the Eastern Province.

The former Sri Lankan Government yielded to the Indian-backed coal plant in Sampur despite protests from environmental groups as a quid-pro-quo to allowing the Chinese to build the Norochcholai coal plant in the North West coast. Meanwhile, a delegation from the Indian Petroleum Ministry was in Colombo this week. They met Petroleum Minister Chandima Weerakody, Development Strategies and International Trade Minister Malik Samarawickrama.

The discussions revolved around joint venture projects between the LIOC (Lanka Indian Oil Company) and the CPC (Ceylon Petroleum Corporation) to manage the 100 oil tank farm around Trincomalee, only 15 of which are now being used by the CPC. The land on which the World War II British built oil storage tanks are situated belongs to the Lands Ministry.
The Indian Petroleum Ministry has purchased assets in several countries, including the United States and Australia, especially in the field of gas for the country’s energy needs in the future.

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