Saturday, February 27, 2016

Power Games Rife As KLS Energy And CEB Clash

From Sunday Leader - By Ifham Nizam
Electricity Board Engineers Union (CEBEU) says a businessman with connections to senior government officials is demanding that a 35MW plant be allowed to operate and that power be purchased at a high rate of Rs. 23 per unit (the Standard Power Purchase Agreement (SPPA) rate paid in 2009).
As the Ceylon Electricity Board (CEB) stood firm against this, the company in question, KLS Energy Lanka (Pvt) Ltd. (a Malaysian company) filed a case in the Commercial High Court against CEB.  (See attachments L5 and L6). The courts issued an injunction order on October 30, 2015 but mysteriously, CEB was not informed of this case. CEB was not aware of anything until the injunction order was handed over, the Union points out.
The injunction specifies:
* Not to cancel their permit to develop 35MW plant
* Not to handover the allocated land to any other developer
* Reserve Grid connection at Chunnakam Grid Substation allocated for their plant without using it for any other purpose
Speaking to The Sunday Leader, CEBEU President Athula Wanniarachchi said they would not give into the whims and fancies of certain individuals.
In 2009, two influential businessmen (Malaysian and Sri Lankan) got a Provisional Approval from the SEA (Sustainable Energy Authority) (Attachment L3) for a 35MW hybrid wind and solar power plant in KKS (Jaffna). As this exceeds 25 MW, it is illegal to go without competitive bidding as per the Sri Lanka Electricity Act No. 20 of 2009.CEB officials said that then Power and Energy Ministry Secretary Shavindra Ferdinando had influenced both SEA (Attachment L8) and CEB (Attachment L2) to carry out this illegal action. They also said that for a project of this nature, the developer needs a license from the energy sector regulator, the Public Utilities Commission of Sri Lanka (PUCSL) as well. However, then Director General of PUCSL, Prof. Ranjith Perera refused to issue it as it was against the law.
According to CEBEU, Perera was under tremendous pressure over this issue from the former President Mahinda Rajapaksa and finally resigned from the post without approving this permit. But the present Director General of PUCSL Damitha Kumarasinghe approved this illegal plant on his first day at work. (Attachment L1) Kumarasinghe has signed on behalf of Prof. Perera by name which is also illegal.
“As a Union we are highlighting the importance of assigning unbiased, educated, honest people to these so called independent commissions. Also this is not something personal against Damitha Kumarasinghe,” the Union said.As the plant was not constructed within the given time-frame, the SEA Permit expired and in 2013, the company made an appeal to SEA to get it back. A committee was appointed to look in to this but then SEA Chairman, Prasad Galhena gave his approval without considering the recommendation of the committee or even getting the views of the other SEA and CEB officers (Attachment L4).However, CEB did not consider this as proper approval. Now the SEA permit has expired for the second time.  The Union says Galhena is still a member of the commission (PUCSL). It is understood that non-conventional renewable power plants (NCRE) with capacity less than 25MW are paid a standard price of Rs.20. (SPPA- Standard Power Purchase Agreement). As this is not economical for the country, CEB decided to call competitive bidding for Wind Power less than 10MW. First tenders for 2 nos. of 10MW plants in Chunnakam, were called on 14/12/2015. The wind mafia however was totally against this competitive bidding process as they needed guaranteed high profits and have, through the court case, indirectly attempted to stop the competitive bidding process of wind plants as well.
In order to bolster their case, they have made false statement to the media that CEB/CEBEU is against private sector participation in wind development. But what they really need, sources say, is selling electricity to CEB at a high price and to avoid competitive bidding. CEBEU stipulates that large wind resources like Mannar (equivalent to Laxapana Hydro) must be handled by CEB and small scale ones (less than 10MW) can be handled by the private sector.
The Union strongly believes that their role is crucial to prevent the government taking an ad-hoc decision again on this matter.
“We have reliable information that they now have connections with the present government as well. There is a massive pressure again on CEB, and the Ministry to allow this illegal business,” the Union stressed.
However, when contacted, PUCSL Director General Damitha Kumarasinghe told The Sunday Leader that they had not approved any such projects but had given a no-objection letter, which he termed a basic for a project of that nature.

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