Eng. Samya Kumarawadu (CEBEU)

Prof. Rohan Samarajeewa

Mr. Jayanath (PUCSL)

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http://www.lankadeepa.lk/news/%E0%B6%BD%E0%B6%82%E0%B7%80%E0%B7%92%E0%B6%B8-%E0%B6%9A%E0%B7%9C%E0%B6%B8%E0%B7%92%E0%B7%83%E0%B6%B8%E0%B7%9A–%E0%B6%9C%E0%B7%90%E0%B6%A7%E0%B7%94%E0%B6%B8-%E0%B7%80%E0%B7%92%E0%B7%83%E0%B6%B3%E0%B7%99%E0%B6%B1-%E0%B6%AD%E0%B7%99%E0%B6%9A%E0%B7%8A-%E0%B6%9A%E0%B7%90%E0%B6%B6%E0%B7%92%E0%B6%B1%E0%B6%A7%E0%B7%8A-%E0%B6%BB%E0%B7%90%E0%B7%83%E0%B7%8A%E0%B7%80%E0%B7%93%E0%B6%B8%E0%B6%A7-%E0%B6%91%E0%B6%B1%E0%B7%8A%E0%B6%B1%E0%B7%9A-%E0%B6%B1%E0%B7%91/101-548243

I have been persistently and repeatedly requesting the scrapping of Public Utilities Commission (PUCSL), for the simple reason, its inter-references with, especially the Ceylon Electricity Board [CEB] and objecting to the Coal Power Project, included in the Least Cost, Long Term Generation Plan, prepared by experts, taking into consideration all factors, both local, foreign, its own organisation and consumers. If the plan of the CEB was accepted, we would not have faced these miserable power cuts, taking advantage of the provision in the Paris Accord, where we had the “right to revise the intended national contributions and targets at any point of time and consider the INDCS to be a living document that should be integrated with changed/modified national development goals and targets”.

Further, advertisements appear from PUCSL, calling for tenders to shift electric posts, a task which the CEB and LECO did efficiently.the most hilarious recent one was, requesting consumers to inform PUCSL of power interruptions, when the usual practice was to contact the local depot of CEB or LECO, trespassing on to the private domain of citizens. Is that also included in the PUCSL Act to harass the consumers.

This is a clear case of PUCSL usurping the duties of CEB and the Minister. In utter desperation, a newspaper report states CEB has arranged for an alms-giving at Mousakelle to invoke divine power – Rain God to come down with torrential rains. This sounds to me, is a defeatism with no self reliance to tackle the problem. Even if one believes in divine power, will the divine power encourage and save the crooks who willingly perpetuated this crisis.?

Since the reshuffle of Ministers in 1988, who did not understand this vital subject and took upon themselves the responsibility. One thing that flourished was Bribery, Corruption, fraud and inefficiency, luring the Public Officers, to tow the line.

The Board of Directors of the CEB should in all earnestness, prevail upon the Minister to have at least CEB excluded from PUCSL, strangulation, else the Ministry, the Board of Directors of CEB, will merely stand as effigies [Pambayas] drawing high salaries and perks.

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 Sri Lanka has started cutting power after failing to award a contract to build a 300 MegaWatt power plant for over three years amid corruption allegations and also cancelling coal plant that was about to be built, making a reality of warnings given by analysts, engineers at the state-run power utility and industry analysts.

State-run Ceylon Electricity Board said up to four hours of power cuts will be imposed on consumers in all parts of the island with one hour in the day time and the rest in the day time. (link to load shedding times)

Three years ago CEB’s engineers union, industry analysts and the power regulator had warned that power cuts were likely in 2018 as the government failed to award a 300 MW thermal power plant to a private firm which was to tide over the country until the coal plant came on line.

But there were no power cuts in 2018 amid better rainfall and slower demand growth.

“We can expect a government announcement by 2018, when indications of the crisis become apparent – typically (during the hot months from) February to April,” power sector analysts Tilka Siyambalapitiya said in 2016 shortly after President Maithripala Sirisena cancelled a coal power plant which was about to be built. (Sri Lanka faces power shortage with coal plant delay)

“The government will say ‘we will pay the bill for diesel and customers would not be burdened’. There will be load shedding (power cuts).”

The government also failed to award a stop gap 300 MegaWatt thermal plant for around three years amid allegations of corruption.

CEB’s engineers union had also warned that the scrapping of the coal plant will push up power costs and if the tariffs are not raised taxes charged from other goods will be used to cover losses in power.

“If the CEB makes losses, the costs will eventually have to be recovered from the public with taxes on food or value added tax,” (Sri Lanka consumers warned on impending ‘electric shock’ after coal plant scrapping).

then CEB engineers union chief Athula Wanniarachchi said.

In 2018 the CEB lost 25 billion rupees and losses could worsen in 2019.

The Public Utilities Commission of Sri Lanka has also given similar warnings.

“PUCSL envisages an energy shortage in years 2018/ 2019 unless the plants identified in the approved plan relevant to the period are implemented on time, the regulator said in 2016. (Sri Lanka regulator stresses urgency of new power plants to ward off shortage.)

“The real challenge is to get these plants implemented,” PUCSL director general Damitha Director General Damitha Kumarasinghe told a news conference in 2016.  

“We have only one and a half to two years. We’re looking at very quick implementation.”

There was also a tug-o-war between the regulator and the CEB after amid allegations that data in a power plan was mis-represented to show that long term costs of coal was higher than liquefied natural gas.

The regulator is to take legal action against the CEB for cuting power secretly without getting permission from the regulator, Sri Lanka’s Daily FT newspaper reported.

In Sri Lanka power supply is a state monopoly and the people themselves cannot set up a power plant and even sell to a neighbor, which generates shortages. 

Power cuts are commonplace all over South Asia except in Mumbai, India where electricity is provided by Tata, a private firm, which escaped expropriation by then Prime Minister Nehru.  (Colombo/Mar26/2019)

The regulator is to take legal action against the CEB for cuting power secretly without getting permission from the regulator, Sri Lanka’s Daily FT newspaper reported.

In Sri Lanka power supply is a state monopoly and the people themselves cannot set up a power plant and even sell to a neighbor, which generates shortages. 

Power cuts are commonplace all over South Asia except in Mumbai, India where electricity is provided by Tata, a private firm, which escaped expropriation by then Prime Minister Nehru.  (Colombo/Mar26/2019)

https://economynext.com/Sri_Lanka_imposes_power_cuts_after_delaying_thermal_plant-3-13844-8.html

BY Dr Tilak Siyambalapitiya

There is only one “decision” on which the current President and the Prime Minister agreed with each other wholeheartedly: that is to cancel the Sampur power plant, in 2016. It was a decision to kill, and not to develop, the electricity sector. Even a decision to kill a project would have been compensated, at least partially, if the duo swiftly commenced a systematic approach to build a gas import terminal and gas-fired power plant, but that was not to be.

On 15th May 2016, a state-owned newspaper “proudly” announced: “Sampur shelved: Coal plant off the table” and continued to say, “The CEM has arrived at several decisions which include negotiating the need for a coal power plant (sic) and replacing it with a cleaner model like LNG”. “They have also decided to suspend all activities including tenders that have already been called.”

Given the several technical inaccuracies in the above statement, it could not have been drafted by a person with any knowledge of engineering, but by a politician, but it achieved its objective. The Deputy Minister of Power, who only a few months ago had been specially assigned through a special gazette notification, the task of getting the Sampur power plant project going, was in tears, as he later said.

The aforesaid statement would have brought immense joy to many: (a) the decision-makers of Cabinet Committee on Economic Management (CEM), (b) the anti-coal lobby, (c) contractors-in-waiting, to supply diesel power plants.

The confused public who do not know the actual motive of the cancellation would also have been pleased since the only coal-fired power plant in the country was undergoing numerous outages, generating bad publicity. So why have another one, the common man may argue, happy that another one will not be built. Moreover, residents of Sampur would have rejoiced that the environment had been saved. The President and the Prime Minister seem to know a lot more than engineers, economists and scientists, to have special meetings and decide themselves, about power plants. Just imagine how concerned they are about the country, her people and the electricity supply!

We have seen and heard similar statements, precisely when the same individuals were at the helm, not at the Power Ministry but on various dubious “committees” of the government:

1992: “HE the President advised me to instruct CEB to refrain from proceeding with the Mawella coal-fired power plant”, said the Secretary to the President, in a letter to CEB. A committee called the “Power Committee” was sitting at that time, chaired by the Secretary to the Treasury. So, the President decides, not the engineers.

2002: “The Prime Minister called the Japanese Ambassador to his residence and said that the CEB has misled both the previous government and the present government. The Prime Minister has informed the Japanese Ambassador that the government has decided to cancel the Norochcholai coal power plant.” This time the committee behind it was called the “Energy Supply Committee”. So the PM decides, not the engineers.

2016: Precisely by the same individuals as in 1992 and 2002 who sat in various dubious committees outside the Ministry of Power and Energy, dictate to the Ministry on how to run the electricity supply system. And each time they failed the country miserably. This time the committee was called the “Cabinet Committee on Economic Management”.

So, after the decision, in 2016, which brought tears to the Deputy Minister of Power, following the “tradition”, the Prime Minister appointed yet another a “committee” and all its members, except one, had no experience, at all, in the subject of electrical power systems, and the committee report came out precisely as expected “build gas power plants; bury Sampur”. What else can you expect of a committee appointed after the decision is made?

Although the “bond committee” report was challenged, this committee’s recommendations went unchallenged. With little knowledge of the media on matters that are electric, the committee report was not even published widely.

To add insult to injury, the Cabinet Committee on Economic Management has since been abolished by the President. Now there is another committee: “National Economic Council”. So now, who is responsible for the mess created by CEM in the power sector?

Who killed the power sector?

So, who killed the electricity supply industry? The President says that he did not. The CEM or the inner Cabinet or what remains of it says it does not exist; the Ministry of Energy says CEM did it, the CEB says we did not do it. The Public Utilities Commission of Sri Lanka (PUCSL) says that the killing power plants was “government policy” but the President says he did not say so, and it was “not government policy”.

So, the electricity generation is moving in the direction the saboteurs wanted it to. The retired oil power plants are been reived; companies are writing reports on how one oil power plant is more expensive than the other; the PUCSL is not approving contracts as regards oil power plants; there are accusations and counter accusations against oil power plants; in the end,

it is oil and more oil; more oil power plants have to be purchased on an emergency basis to avoid continuing blackouts in view of elections to be held towards the year end; such emergency procurements will be approved by Cabinet and the PUCSL instantly, without batting an eye lid.

Mark my word; there will be a lot of “emergency power” in 2019 and in 2020.

Procuring emergency power is also very good—not for the electricity customer or the taxpayer but the decision-maker.

Are we really building a gas terminal?

Natural gas prices declined since 2013. A feasibility study was concluded, in 2014, and gas power plants entered the planning cycle and subsequently the national long-term generation plan in 2017. The government began “negotiating” with various parties to build gas terminals and gas power plants whereas the Electricity Act says power generation has to be procured on a competitive basis. News items such as the following appeared during the 2015-2018 period:

BOI Chairman: “We have received six proposals for gas terminals and negotiating with all of them”.

CEM: We are negotiating to form a joint venture between India, Japan and Sri Lanka.

President: I have received a proposal from a Korean Company to build a gas terminal; here it is. It will be a take-or-pay contract.

China: We will build a gas terminal in Hambantota

So, the number of gas terminals being contemplated by various arms and individuals of the government is nine, but none has reached the construction phase. All proposals and their hidden sponsors within various government committees try to evade the competitive bidding process. The spoils too attractive to shared. So, bury the National Procurement Commission, procurement policies and the Electricity Act!

The large Indian market so far has only four gas terminals; three of them hardly used, owing to the higher costs of gas compared with coal and renewables. Politicians at all levels in tiny Sri Lanka are toying with nine gas terminal proposals! This game will become more aggressive in the run-up to elections, for obvious reasons.

All these games are played while the country is paying for oil to run power plants. More are on the way. The share of electricity produced from oil reached a 20-year low of 18%, in 2015, and now it has risen back to 34% by 2017, and will surely exceed 50% by 2020.

In 2020, the Central Bank will write in its annual report: “Bad weather has caused more oil to be used for power generation!” Will they dare say “the cancellation of Sampur and not building a gas terminal was the reason”?

Kill an ongoing project, then call friends and ask for proposals for gas plants and confuse all the dubious proponents by accepting all nine proposals whereas the need is for just one. All this, they do, knowing very well that procurement has to be through competitive bidding, as stated in the law.

Since the planned power plants are not allowed to be constructed with government’s meddling with the next best solution to build a gas import terminal, by year 2020, the additional oil consumption for power generation would be, at least, 400 million litres. At today’s costs, it will be at least Rs 32,000 million. This cost will be passed on to electricity customers, not only in 2020, but year after year.

Did someone say the Central Bank bond issue (the scam) was the biggest financial irregularity in the country’s history? Isn’t Rs 32,000 million lost to the country year after year bigger than Rs 11,000 million, which is said to be the loss due bond scams?

When will a Presidential commission to probe meddling with power plant projects be appointed? The Commission can begin work with the 15th May 2016 decision of the CEM, as the first piece of evidence.

Swiss Challenge

Numerous newspaper articles claimed that the real reasons for the October 26th fallout between the two individuals sharing power was the gas terminal contract. Since we are not privy to what goes on in the inner rooms of the Presidential Secretariat or the Temple Trees, it is hard to say yes or no. However, within days of the October 26th fallout, an official newspaper advertisements appeared requesting alternative proposals for the gas terminal, to be submitted within five weeks. The advertisements, obviously published by the arm of government that remained in power, tell us all about it.

The advertisements literally said that we (meaning the surviving arm of the government) had got a proposal for an LNG terminal, and anyone could match that could send counter proposals within five weeks. The terminal is at least a 300-million-dollar investment; and what is more; against all advice and protests from almost all who know the energy industry, the President was asking for proposals to match the take-or-pay contract offered to him by a Korean Company. The total value of the contract would have been 5,000-million-dollars, if the deal went through, when there was no government!

Surely, no company of repute would even attempt to send a counter proposal to finance and build a 300-million-dollar asset in five weeks! Even a building contractor takes two weeks to send his pricing to build a 10-million-rupee house! Here, we have a government which has received a proposal from an interested party, which was not solicited (meaning there was no tender process in the first place) now trying to rush the proposal through by inviting counter proposals in five weeks so that there will be no counter proposals. Respectable companies with worldwide experience in building gas terminals must be laughing at the Sri Lankan way of handling multi-million dollar projects.

And the end result? There will be no gas terminal, someone in the Cabinet will shoot it down, because the procedures were not followed.

So, that’s how our President and Prime Minister agreed on the cancellation of the Sampur power plant and disagreed on the gas terminal. The government will go down in the history as the administration that cancelled all power plants and did not build a single power one.

In fact, it is not the government that decides which power plants to build and where. Such decisions in other countries are made by technocrats. The government ensures that laws are made and adhered to. Here, such decisions are made by all-knowing politicians, and the result is obvious.

The on-going blackouts are only the beginning. The power generating system is planned to meet customer demand even when hydropower is low and when a large generator is out of order. But when politicians do not allow the construction of new power plants, and tinker with plans and projects, then crises are to be expected when the rainfall gets low and a power plant goes out of order.

Then, the weather or the power plant can be blamed for the blackouts!

The game (of meddling with power plant projects) is the same, and this time around, the players are the same as in 1992, 1997, 2002, and the result: more blackouts, higher costs and a nation eternally in a power crisis!

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=201552

COLOMBO (Reuters) – Sri Lanka’s state-run power firm has imposed daily power cuts for the first time in more than two years as a drought has slashed hydro-power output, highlighting the government’s failure to build new power plants, officials said on Monday.

The drought has cut the hydro-power generation in half to 15 percent of the nation’s total electricity production as the Ceylon Electricity Board (CEB) seeks to save water for household and irrigation requirements, the firm said.

That has resulted in a four-hour rolling power cut on weekdays, between the hours of 8:30 a.m. and 10 p.m. (0300-1630 GMT), that began without notice on Friday and was then announced on a scheduled basis for Monday. The four-hour daily cuts hit different places at different times.

If the power cuts are extended for any length of time they could hurt Sri Lanka’s already weak economy. Its GDP growth slowed to just 3.2 percent in 2018, the lowest in 17 years.

Sri Lanka’s peak demand is 2,400 MW and the country is generating 1,950 MW at the moment, CEB officials said.

“We have to impose power cuts to bridge the shortage,” Saumya Kumarawadu, head of the CEB Engineers Union, told Reuters. “The main reason for the power cut is the government’s failure in implementing the planned power plants,” he added.

Officials from the Power and Energy Ministry were not immediately available for comment on the power cuts.

Health Ministry officials said key hospitals in the country had emergency power backup.

In an indication of how severe the situation has become, a Power and Energy Ministry official said the government had on Friday started trying to produce artificial rain with the help of Thailand’s Department of Royal Rainmaking and Agricultural Aviation – so far only a pilot project.

The power cuts come after delays in power plant projects.

In 2016, the government canceled a 500 MW coal power plant through a joint venture between CEB and India’s National Thermal Power Corporation in the eastern port district of Trincomalee, citing environmental pollution. That coal power plant was originally due to start producing later this year.

A 300 MW liquefied natural gas plant (LNG), which was to be started in January this year, has been held up for more than two years due to a court battle between local firm Lakdhanavi and a joint venture between China’s GCL and a Sri Lankan firm.

Lakdhanavi had filed a legal case against the Power and Energy Ministry in 2017 for awarding the LNG tender to the joint venture for $307 million against its bid of $175 million.

Sri Lanka has total electricity generating capacity of 40 GWH, as it mainly relies on thermal power, including a Chinese built coal power plant, which account for 45 percent of its supply.

Additional reporting by Ranga Sirilal; Edited by Martin Howell and Alison Williams

Despite strong assurances from the Power and Energy Ministry that power cuts imposed due to the sudden breakdown of the Norochcholai coal power plant on Monday, people are left without electricity for three to four hours at times.

Households and business large and small, are all counting the cost of power cuts and failures.

The power interruptions in turn have raised questions about future supplies and whether the Ceylon Electricity Board (CEB) can ensure uninterrupted power with only three more weeks left for the Sinhala and Tamil New Year.

The Ceylon Electricity Board Engineers Union President, Saumaya Kumarawadu, told the Sunday Times that the board faces a shortage of 300 Megawatts of some 2,600MW needed every day, thereby triggering power failures.

The problem has been building up over the years due to the failure of authorities to implement at least five key proposed power projects due to a variety of reasons.

According to the engineers union, since the completion of the final stage of Norochcholai power plant in 2014, not a single power station was built to meet the increasing electricity needs in the country, leading to the current crisis.

The union claims the projects were “stopped or purposely delayed” by organised groups with vested interests eager to promote projects beneficial to them.

They blamed politicians, senior officials in the ministry as well as members and officials in the Public Utilities Commission of Sri Lanka (PUCSL).

A long-lerm, least cost electricity generation plan prepared by planning engineers in CEB was finally approved by PUCSL in 2018 amid severe pressure by the Engineers Union.

The engineers raised issues about the transparency of the proposed LNG projects.

The proposed Sampur power station with a capacity of 500MW was the next biggest power station to be built after Norochcholai and due to be completed by next year, but the project was held back due to a range of reasons.

Earlier, a long-term power generation plan prepared by the CEB up to 2034 was sent to the PUCSL in 2016, but was delayed for more than a year and approved only with fewer power stations.

Another proposal to add 230MW of LNG power to the national grid by this year has run into controversy with seven companies placing bids for the tender and authorities attempting to favour one bid from a South Korean company. The CEB Engineer’s Union objected to the move and eventually all bids were evaluated, but this has run into legal issues.

Meanwhile, the government is attempting to build three more LNG power stations through several companies from Japan, India and China, but the engineers union claims that there is neither any appropriate proposal nor any agreement on pricing to date.

Approval for another 100MW and 24×4 MW power stations which are to be fuelled by heavy furnace oil — proposed as medium-term solutions — has been further delayed with engineers refusing to sit on the technical evaluation committee.

The CEB Engineers Union claims that six months have passed after the draft tenders were submitted for ministry approval, but the secretary to the ministry is proposing alterations to technical specifications to appease a few individuals with business interests.

The union also claims that due to long delays in implementing low-cost coal and LNG power plants, several interim proposals were also made for a number of furnace oil-fuelled power plants as an alternative to the costly diesel powered plants, but the ministry had delayed approval for the bidding process.

They claim that delaying tactics of the ministry in granting approval for the bidding process to continue would eventually lead to a situation where emergency power purchases at exorbitant rates from the private sector is the only option left.

Cabinet approval was obtained for purchase 100MW of power from diesel generators during the first few weeks of February, but the plan did not materialise. Discussions on power purchases from Ace Matara and Asia Power which could yield 70MW has been suspended by the ministry, the unions claim.

The hydropower generation capacity, too, has been dropping due to the adverse weather. The capacity at Castlereigh and Maussakele Reservoirs have dwindled to 8% and 25%, respectively.

The capacities in reservoirs of the Mahaweli complex, including Kotmale, Victoria and Randenigala, are at a minimum. The remaining water in these reservoirs is needed for irrigation and the water released for hydro generation has been curtailed by the water management committee.

However, the Secretary to the Ministry of Power and Energy, Dr Suren Batagoda, told the Sunday Times that the crisis was not a result of the development over the past three to four years, but a long standing issue.

He said one of the reasons was that the engineers had declined to sit on technical evaluation committees resulting in the delay of project approvals.

“We have even asked the engineers to put forward the least cost of the supply of power so that we can ask bidders if they could provide power at those prices so that we can get the projects moving,’’ he said.

He said there are plans to award five LNG projects within the next month to ensure uninterrupted power. “We also will be awarding tenders for heavy furnace oil plants and also get the services of a barge from which 100 megawatts could be supplied.”

Dr Batagoda said disputes between the engineers and the PUCSL were also worsening the power crisis.

Power generators add to cost burden

The unannounced power cuts are also adversely affecting exporters including the tea and apparel industry.

“Tea Exporters are very concerned about the frequent power cuts and power interruptions,” Mr Jayantha Karunarathne, chairman of the Tea Exporters Association of Sri Lanka told the Sunday Times.

“To continue with our production to meet shipment deadlines we need to use generators. However, using generators is expensive [and] that could have an impact on our costs depending on the duration of power interruptions,” he explained.

“It is important that we resolve this issue without any further delay as continuous use of generators would lead to various other problems.”

“The apparel industry is very concerned about the power crisis and unannounced power cuts, we have strict time lines for deliveriesm,” Mr. MPT Cooray, the general secretary, Joint Apparel Association Forum of Sri Lanka, told the Sunday Times.

“Fake news on social media and communications platforms regarding pending power outages created disruptions and had compelled some companies to obtain back up power sources at significant cost,” said Rohan Masakorala, the chief executive officer, Shippers Academy Colombo. He is also chairman, Advisory Committee for Logistics.

Mr Masakorala pointed out that while the power disruptions haven’t had a significant impact on shipping yet, a prolonged power crisis and unannounced power cuts, may complicate matters.

He said the authorities need to be proactive to reduce the spread of fake news.

http://www.sundaytimes.lk/190324/news/festering-power-struggles-bubble-over-again-342427.html