By Niranjala Ariyawansha

Ceylon Today

The Government has decided to go for a joint venture with India and Japan towards the setting up of a Floating Storage Regasification Unit (FSRU), which would convert diesel plants to LNG, for a sum of US $300 million, despite opposition from top officials.

The Cabinet Committee on Economic Management (CCEM), which has forwarded this proposal, has not included any environment or final feasibility report with it.

With the country being devoid of any energy plan or policy, it would be dangerous to release the country’s power sector in an ad hoc manner to overseas buyers, these officials charged.

Sources said the Government has decided to implement this joint venture, although Australia had earlier submitted a proposal to set up an FSRU for half of that sum.

Also, South Korea, under an agreement that Sri Lanka has to purchase LNG from Seoul for over a 25-year period, had even consented to set up a FRSU free-of-charge.

However, having put aside the proposals from South Korea and Australia, the Government is now preparing to opt for the joint venture by the end of this month with the four firms that are to be submitted by the three countries, a top official from a Ministry told Ceylon Today.

The firms are Sri Lanka Gas Company, which comes under the Treasury, Petromat Oil & Gas Equipment (Pvt) Ltd of India and Sojitz & Mitsubishi for Japan are those companies.

As per the joint venture, these firms are set to import gas to Colombo over a 20-year period.

The Ceylon Petroleum Corporation (CPC) will function as a Single Credible Entity towards the gas imports.

According to this plan, the lowest percentage of shares (15) will be left to Sri Lanka, 47.5 per cent will go to India, while 37.5 shares will be given to Japan.

A top official stated that they had to fight tooth and nail to hold on to the 15 per cent.

The Ceylon Electricity Board (CPC) has already expressed opposition to this joint venture. Ministers Ranjith Siyambalapituya and Dr. Sarath Amunugama having submitted a Cabinet Paper a fortnight ago, noted that they have decided to import gas in a bid to convert the diesel plants owned by the CEB to LNG.

Furthermore it has also been mentioned in the agreement that Colombo will be going for a joint venture with New Delhi regarding the China Bay Oil Tank Farm in Trincomalee.

The proposal which was submitted to the Cabinet, prior to Prime Minister Ranil Wickremesinghe’s visit to India in April last year, had also been ratified.

“The CCEM is taking decisions regarding the country. They think that Government officials, by forwarding various circulars, are placing burdens on the country’s development drive. But we do that not with the aim of scuttling development programmes but towards the betterment of the country. These circulars have been made to prevent both politicians and their henchmen from damaging the country by taking arbitrary decisions. However, these decisions can only help to stall the forward march of the country,” a top official said.

He further charged that behind such unsolicited proposals, invariably there are commissions.

The CPC, the Engineers Union of the CEB (CEBEU) and many other trade unions have already protested to this proposal.

CEBEU Committee Member Athula Wanniarachchi said: “There is no energy plan to the country. Instead there is only a business plan. The country’s energy plan is being designed according to the business plan of their friends and kith and kin,” he charged.

The FSRU is set to be established at the Colombo Port. The Convener of the CPC Trade Union Collective Janaka Rajakaruna alleged that due to the threat posed by the setting up of FSRU in a commercial port, the rest of the shipping firms would automatically seek to increase insurance charges.

http://www.ceylontoday.lk/print20170401CT20170630.php?id=38503

www.hirunews.lk

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The Power and Renewable Energy Ministry has brushed aside warnings of countrywide power-cuts in March and April due to trade union (TU) action by the Ceylon Electricity Board Engineers’ Union (CEBEU). Deputy Minister Ajith P. Perera told the Sunday Times, he did not believe the CEBEU would resort to a measure as extreme as one that would lead to a countrywide power crisis.

He was speaking in the wake of warnings by the Engineers that power-cuts were possible by March, if their TU action continued into the dry season. TU action has been continuing for some months over a dispute between the CEB and the Public Utilities Commission of Sri Lanka (PUCSL), the power sector regulator, regarding the country’s long term power generation plan.

Engineers have to date kept away from Technical Evaluation Committees (TECs) which handle power purchase tenders. In the latest such development, CEBEU members refused to be part of a TEC appointed to procure 100 Megawatts (MW) of emergency power. Tender for the plant was opened on Friday (12) and will now have to be evaluated by a TEC, before a bidder is selected.

Mr Perera however, was hopeful that such action would not result in a power crisis in the next several months. “There have been occasions in the past where the CEBEU have helped us in times of dire need, even in the midst of TU action. I don’t believe that stance will change.”
The CEBEU held a different view. “If 100 MW emergency power is not available by March, there will definitely be power-cuts, as we can’t expect any rain during this period,” claimed CEBEU Committee Member Athula Wanniarachchi. In case of a breakdown in a major power plant, the situation will be aggravated further. Mr Wanniarachchi insisted the CEBEU was standing firm its members would not take part in TECs for any power procurement project, unless the Government resolves the dispute surrounding the Least Cost Long Term Power Generation Plan (LCLTPGEP).

Several power plants, namely Unit 3 of the Lakvijaya Coal Power Plant in Norochcholai (300 MW), Kelanitissa Combined Cycle Power Plant (160 MW) and Kelanitissa Gas Turbine 7 (100 MW) are also due for shutdowns at different times, from February to April, for routine maintenance. Meanwhile, private power plant Sojitz-Kelanitissa (160 MW) has been out of order from July 2017, due to a mechanical breakdown.

“The combined capacity of all the country’s hydropower reservoirs currently stand at about 68%. Once that level falls to 35%, the situation would be critical, as priority would have to be given to release water for drinking and agricultural purposes,” Mr Wanniarachchi elaborated. “As such, customers, especially industries will suffer.”

“The CEBEU would not take any responsibility if power-cuts do occur,” Mr Wanniarachchi stated, arguing that the Government and PUCSL should take the blame. “We are taking several measures to meet energy needs during the coming dry season, and purchasing emergency power is only one measure,” maintained Deputy Minister Perera, claiming plans are being put in place to avert power-cuts. Meanwhile, the Ministry was working hard to resolve the dispute between the CEB and PUCSL.

Mr Perera also said that, when it came to the country’s long term power generation plan, both the CEBEU and the Ministry are in agreement. That policy envisaged what he claimed was a “correct combination”, which saw a mix of hydro, renewable energy sources and coal among other things.

The problem, he stressed, was due to some officials of the PUCSL who were “clinging firmly to their own opinions.”
“We acknowledge the PUCSL has a right to voice its thoughts. What we are trying to do is narrow down the differences between their opinions and those of the CEB,” he remarked.

Ceylon Today

By M Rishar M Saleem

Sinister moves by the authorities to sabotage awarding the Kerawalapitiya-ii combined cycle power project to a local company could cause Rs 204 billion in losses to the State, alleged senior engineers of CEB, speaking to Ceylon FT yesterday.
Furthermore, the engineers opined that it was the right of the public to know such moves which affect public life and enormously affect Government coffers. “This would be a much greater scam than the Rs 11 billion Bond scam if it goes unnoticed”, they alleged.
It was brought to light that some authorities with vested interest were favouring the 300 MW Kerawalapitiya-ii combined cycle power plant to be awarded to Samsung Korea, overlooking local bidders whose tariffs were much lower. This is a definite saving of Rs 204 billion to the country; the loss could be 20 times greater than the now-infamous Bond scam.

This scam is now being exposed, thanks to some concerned parties who stand against corruption, whose eyebrows were raised by the fact that Samsung, who was disqualified for non-submission of signed documents for the financial bid was considered a genuine bidder.

Engineers charged that “Despite the scam under the carpet being exposed, players with vested interests lament over fairytales and keep dragging the issue without awarding the contract to the deserving bidder, which is a serious violation of Government tender awarding procedures.” According to sources, the margins between the lowest and second-lowest bidder were no less than a staggering Rs 34 billion, which is three times greater than the Bond Scam losses.

At the beginning of this month, the Director General of the Public Utilities Commission of Sri Lanka (PUCSL), Damitha Kumarasinghe warned that the Kerawalapitiya Liquid Natural Gas (LNG) plant would need to be started soon if they are to keep to the CEB’s timeline of commissioning it by 2019. The PUCSL has repeatedly warned that the country will face an energy crisis soon unless they keep to the approved generation plans and implement what has been proposed.

In this respect, PUCSL officially noted that delaying this essential power plant will certainly cost the country to the tune of Rs 1.55 billion per month when compared to the high cost of short- term emergency power plants required to bridge the gap.
Over the last 20 years, the country has had to resort to diesel and thermal power plants to meet increasing power needs, as the long-term power plants proposed for over 20 years have not materialized in keeping with failures of CEBs project proposals.
The 300MW Kerawalapitiya-II tender was floated by the Ceylon Electricity Board (CEB) as a fast-track power plant, by squeezing the time spans required for each aspect of the project.

Proposals were opened in April 2017 and now a total of eight months have lapsed; the fast-track project has become an off-track project. This delay has already resulted in a loss of Rs 12.4 billion, a figure exactly close to the Bond Scam, unheeded by the public.
The delaying stance adopted by the authorities is questionable as the country faces a severe energy crisis and it is time for the concerned parties to prioritize the country instead of personal gains, the engineers alleged.

Meanwhile, the authorities have issued a drought warning for the March-April 2018 period, which could result in imminent power cuts.

Ceylon Today

By Niranjala Ariyawansha

Minister of Power and Renewable Energy Ranjith Siyambalapitiya is to present a Cabinet Paper next week requesting to dissolve the Public Utilities Commission of Sri Lanka (PUCSL) and appoint suitable intellectuals instead, Ceylon Today reliably learns.
According to sources, Ministry Secretary Dr. Suren Batagoda is also preparing to include several negative observations regarding the PUCSL in that particular Cabinet Paper.

He is due to point out that the membership of the PUCSL is not acting professionally and by submitting false figures and statistics in connection with Power Plants, they have misled the public.

They have decided to submit this Cabinet Paper after the PUCSL had last week rejected a Joint Cabinet Paper submitted three weeks ago by Ministers Siyambalapitiya and Dr. Amunugama, saying that a generation mix was required for the energy security of the country.

Simultaneously, this took place within a backdrop where the Least Cost Long Term Generation Expansion Plan (LCLTGEP) 2018-2038 which the CEB had submitted to the PUCSL had been set aside.

This Cabinet Paper had emphasized that, similar to all countries in the world, Sri Lanka too, without depending only on one source of energy to fulfil the future energy needs of the country, should use all other sources including coal.

The LCLTGEP prepared by the CEB states that all energy sources including coal had been mentioned. However, the PUCSL had removed the coal power plants and included many Liquid Natural Gas (LNG) plants instead, pointing out falsely that Coal was far more expensive than LNG, the CEB Engineers’ Union (CEBEU) has alleged.

In a case filed at the Appeal Court by two others including member of the CEBEU Athula Wanniarachchi it has been requested that an order be issued to the PUCSL that the illegally prepared LCLTGEP be withdrawn.

According to the Sri Lanka Electricity Act, No. 20 of 2009, Clause No. 5 and the Public Utilities Commission Act No. 35 of 2002, Clause No. 30, the Subject Minister should prepare the General Policy Guidelines on the Electricity Industry and submit it to the Cabinet. All amendments submitted for these too should be approved by the Cabinet and it should be laid before Parliament and only then be presented to the PUCSL. According to this policy of the government, the LCLTGEP should be prepared by the CEB.

The role of the PUCSL is to regulate whether the CEB complies with implementing the policy provided by the government or not.

Under these circumstances, what the government has done by referring the generation mix policy document prepared by the two ministers, to the PUCSL requesting them to submit their observations is reversing the legal framework that exists. Professor Kumar David, a veteran energy expert and an electrical engineer warns that the government has yet to realize the danger of the ad-hoc decisions they make in the power and energy sector sans any proper policy and as a result Sri Lanka will have to face a severe energy crisis in the near future.

He also emphasized the fact that the beginning of this was the decision taken by the government, to halt the construction of the Sampur Coal Power Plant made without any foresight.

He further told Ceylon Today that even now, the government has set aside preparing an energy policy and instead it is making stupid decisions based on inaccurate guidance of advisors.

By bring to a standstill the Sampur Coal Power Plant a sum of Rs 220 billion would have to be spent to purchase power from high cost diesel power plants and it is a serious mistake, he added.

http://www.ceylontoday.lk/print20170401CT20170630.php?id=38457

BY Niranjala Ariyawansha

Ceylon Electricity Board (CEB) engineers have decided not to participate in the technical evaluation process of the 100 megawatt (MW) emergency power tender, which is to be purchased by the Government,……as a solution to face up to the drought conditions which may occur during the months of March and April this year.

Due to this decision taken by the CEB engineers, there could be a strong possibility of power cuts coming into effect during the months of March and April, informed sources informed Ceylon Today.

The tender is to be opened today (12) and the CEB Engineers’ Union (CEBEU) said that the arbitrary conduct of the Public Utilities Commission of Sri Lanka (PUCSL) and the failure of the Government to control the PUCSL, had prompted them to opt out of the evaluation process.

The sources said that during the dry spell even if one unit of the 300MW Norochcholai coal power plant were to breakdown, the situation could become worse.

They added that further complicating the situation would be the third phase of the Norochcholai plant having to be shut down for a 45-day period for scheduled maintenance work and thereby 300MW will be lost to the National Grid during that period.

Though the CEBEU is opposed to the purchase of high cost emergency power, Committee Member of the union, Athula Wanniarachchi said that it was with the greatest displeasure that the tender book, for this tender, had been prepared owing to the failure to build at least one Big Firm Power Plant since 2013.

“But, we are not participating in this tender evaluation. Due to this, during the dry spell, expected in March and April, there is a likelihood of power cuts taking place. If such a scenario is to take place then, the rap for it should be taken by the officers of the PUCSL and those bigwigs of the Government who support such actions,” said Wanniarachchi.

The CEB engineers, upon having completed the technical evaluation process within a fortnight, will need to submit its recommendations to the Technical Evaluation Committee (TEC) which in turn will hand over its recommendations to the Standard Cabinet Appointed Procurement Committee (SCAPC).

The SCAPC will, after having considered the recommendations, award the tender to a suitable bidder.

Due to an ongoing internal battle within the CEB, regarding the Least Cost Long Term Generation Expansion Plan (LCLTGEP), which was filed by the CEB for 2018-2038, the CEBEU had withdrawn its members from the TEC and resorted to trade union action in the past few months.The General Manager of the CEB also had informed the PUCSL that they cannot implement the LCLTGEP compiled by the PUCSL instead of the LCLTGEP compiled by the CEB.

http://www.ceylontoday.lk/article20171001CT20180331.php?id=7265

http://www.ceb.lk/ceb-highlights-serious-errors-in-pucsl-report-on-cost-estimate-for-delays-of-power-projects/

CEB Highlights Serious Errors in PUCSL Report on Cost Estimate for Delays of Power Projects

The Public Utilities Commission of Sri Lanka (PUCSL) has recently released a report titled “Financial Delay in Implementation of Power Plants” which estimates the financial losses due to power plant delays between 2018 to 2020 period at 50.6 billion. CEB had replied to PUCSL stating that the report has over estimated losses by 650% and “has serious calculating errors and major omissions and is prepared without an in-depth analysis”.
This is the second occasion in the recent past where PUCSL had published reports giving figures that carry serious errors as per later CEB findings. In this latest CEB reply, the General Manager CEB had stated that PUCSL’s calculation of the delay to proposed 300MW Kerawalapitiya LNG power plant is a 1300% overestimate. As per CEB calculations the estimated financial losses should be 2 billion and not 28 billion as per PUCSL report. CEB highlighted the major mistakes committed by PUCSL in its estimation, which includes considering the power plant to operate on Liquid Natural Gas (LNG) from 2019 whereas the plant is to be partially operated on Oil in 2019 due to lack of availability of LNG supply infrastructure by then. CEB reply further highlights other mistakes by the commission such as considering the cost of Rooftop Solar as Rs 11.86 per unit whereas the current price paid for a unit of Solar rooftop is Rs 23 per unit. As 60% of current solar additions are from rooftops, such omissions create serious overestimations.
CEB reply also extended CEB assistance to commission staff and states “We accept the need to have an independent, professional regulator and would fully extend our support for your staff to develop such knowledge and skills required. We do acknowledge that electrical power systems is a highly specialized subject area and long years of experience in the fields of power planning and system operations is required to properly understand the intricacies. We cordially invite your staff to develop a close communication with the ministry, CEB and other agencies and understand the practical realities of power plant implementation in the country beyond the ideal, theoretical, isolated world within which they seem to operate.”
The CEB reply concludes by stating “However, if your staff fail to do so, their conduct not only would make timely development of power plant even more difficult to CEB and to the ministry but also would lead to develop a general distrust of reports and figures published by the commission.”