Norochcholai stages II, III to begin

On completion project will provide 900 MW power:

Chaminda Perera

Sri Lanka entered into agreement with the Chinese Government yesterday to commence the second and third phases of the Norochcholai coal power project which is aimed at generating over 600MW.

The Exim Bank of China has provided a loan of US$ 891 million for the second and third phases of the project which will begin in October.

This loan is repayable in 20 years at two percent interest.

Ceylon Electricity Board Chairman E.A.S.K. Edirisinghe and President of the China National Machinery and Equipment Import and Export Corporation (CMEC) Jia Zhiqiang signed the agreement on behalf of the two Governments in the presence of President Mahinda Rajapaksa, Power and Energy Minister John Seneviratne and Chinese Ambassador in Sri Lanka Yang Xiuping .

The Chinese Government agreed to provide financial assistance to the country’s biggest ever power generation project on a request by President Mahinda Rajapaksa during his State visit to China in 2006.

The first phase of the project generating over 300MW is expected to be completed by next year. The Chinese company which undertook the construction has decided to complete the construction one year before it was originally planned.

Power and Energy Minister John Seneviratne at a press conference held at the Information Department said the first, second and third phases of the project is expected to generate over 50 percent of the country’s power requirement and power sector will see massive development with the completion of this project.

The coal power project will halve the production cost of an electricity unit and this will directly help boost the country’s economy, he said. The Minister said the country’s daily power requirement is 1800MW and this project will add 900MW to the National Power Grid.

He said the diesel power generation plants can be removed after this project is completed by the Government. “The production cost of an electricity unit is Rs. 14.50 but the CEB sells it to the public at Rs. 13.00 incurring a loss of Rs. 1.50 for every unit.

The production cost of an electricity unit can be brought down with the completion of Norochcholai Coal power project. The diesel power generation is very costly when compared with coal power generation.

He said the main objective of the project is to reduce the existing electricity tariff which is the highest in the Asian region.

“Power supply to the Northern and Eastern areas will be expedited with the completion of this project. We find it difficult to provide electricity when there is drought and this situation will change after this project is completed,” the Minister said.

Under Phases II and III of the project, a substation is expected to be constructed at Chilaw and a transmission line will be extended from Puttalam to Anuradhapura. Over 3000 youths in the area will get direct and indirect employment opportunities due to this project.

The Minister said the families who were evacuated from the construction site in Norochcholai have been provided fully equipped houses . “We provided each family two acres of lands.

The infrastructure facilities in the area were developed, he said. Addressing the media CMEC President Jia Zhiqiang said the Government and the CEB has provided all assistance they required to complete Phase I construction one year before it was scheduled to be completed.