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Attempt to thwart mini hydro projects

by Rashomi Silva

CEB officials have uncovered a well-orchestrated attempt by an organised group of officials within the Ceylon Electricity Board to thwart the construction of minihydro projects.

According to authoritative sources in the CEB, the 'diesel Mafia' had placed obstacles in the way of prospective developers to discourage them from undertaking the power projects.

"This group was behind the recent amendments made to the Standard Power Purchasing Agreement (SPPA) aimed at frustrating developers of mini hydro-power stations," they allege.

However, following the matter being brought to the attention of Power and Energy Minister Karu Jayasuriya it has been proposed to remove the objectionable amendment.

It is the CEB Diesel Mafia together with the so-called environmental NGOs who are responsible for delaying the proposed thermal power plants in several parts of the country, the sources said.

CEB Chairman M. Zubair told the Daily News: "It is unfair to brand every CEB official as a mafia member against the mini hydro power stations. The mafia may or may not exist, but most of the officials are not involved."

"In a bid to encourage prospective Hydro Power Plant developers the CEB has decided to review its Standard Power Purchasing Agreement (SPPA) again", Zubair added.

Under the recently reviewed SPPA, prospective investors are required to produce a performance bond to the value of Rs. 2 million per MW of plant capacity to obtain the letter of intent (LOI), an agreement between the CEB and the developer to purchase electricity from the developer.

However, they are required to pay a non refundable LOI processing fee of Rs. 100,000. This was introduced on the request of the developers themselves with the intention of preventing non genuine investors applying for Hydro Power Stations, he said.

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