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| Saturday, 25 September 2004 |
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The Upper Kotmale Hydropower Project and Norachcholai Coal Power Project were identified as too vital projects to meet the increasing demand for electricity in Sri Lanka. They were planned to be operational by 2001 and 2002 respectively. Unfortunately for the power sector in particular and the whole economy in general, they were not implemented. This has led the country into an enormous power crisis which is not visible merely because there are no power cuts. The shortfall in power and energy supply is being met since 1997 through purchases from Independent Power Producers (IPPs) and emergency/supplementary power suppliers at high prices (as high as Rs. 12 per unit of electricity and escalating with the depreciation of the rupee since the purchase contract is in US dollar terms). The Upper Kotmale hydro and Norachcholai coal fired power stations will produce electricity at costs (to the economy) less than Rs. 2.50 per unit, the CEB Engineers' Union said yesterday. In a latter sent to professional organisations. It said: "The financial burden forced on the Ceylon Electricity Board (CEB) for power purchases has now accumulated to over Rs. 25,000 million. The country is now incurring a loss of around Rs. 30 million each day due to the non availability of the two power projects. Even though there were positive signs for their implementation, seemingly it is again turning out to be yet another false hope. It is pathetic and sickening to note how the irresponsible and short sighted decisions sacrifice projects of such importance and magnitude for political gain. The crisis has brought immense benefits to a handful of businessmen who are now making use of all means at their disposal to keep the problem unsolved. They are the IPPs and the suppliers of emergency power. The crisis has presented them with a virtually risk free business opportunity with assured exorbitant profits. Naturally they do not want to lose this cash cow and are doing everything possible to halt large power projects. Widely used methodologies have been employed and all viable technology options have been considered. All the approvals required according to the law of the land have been obtained and all environmental clearances have been granted by the government and independent authorities. No amount of reforms would resolve the ills of the power sector unless and until the fundamental requirement of least cost power generation is secured. As the group of engineers most knowledgeable on the issues in the power sector, we wish to inform that these projects must be implemented at the shortest possible time if our country is to think of any economic development. Nearly forty per cent of the population is still without electricity. The electricity prices in the country which are already extremely high (one of the highest in the world) are bound to increase further with the oil price hikes. The consequences to the economy are extremely harmful. In addition to scaring away the new investors, even the existing industries and businesses have been made to fight a losing battle for survival in the face of fierce international competition. High electricity prices are one of the main contributory factors for the high cost of living. First priority with regard to emerging out from the precarious power supply situation in the country is the implementation of the two vitally important power generation projects. Ceylon Electricity Board Engineers' Union (CEBEU) has taken a decision to firmly stand by these projects and extend our support in their implementation. |
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