Controversy over power purchase agreement with ACE Power

By Maheesha Mudugamuwa


Controversy surrounds the government’s decision to purchase power from ACE Power, Embilipitiya, a private power company.

Trade Unions attached to the Ceylon Electricity Board (CEB) claimed that the country’s electricity distribution sector was a national embarrassment, brought about by decades of turning a blind eye to its misdemeanors.

The JVP affiliated Lanka Viduli Sevaka Sangamaya (LVSS) General Secretary Ranjan Jayalal alleged that the majority of the CEB’s top management was corrupt and they work in favor of private sector power suppliers for commissions.

Commenting on the controversial power purchase agreement with the ACE Power, Embilipitiya, he told The Morning that the top management who earned commissions from the said power plant had somehow convinced the government that the country would not receive rain for another three years and therefore purchasing power from the private sector would be the best solution.

The government without questioning the CEB on what grounds they predict there would be no rains for next three years, had given the cabinet nod for power purchasing from the private sector which had caused a massive loss for the CEB as well as for the public as the board had to pay a large sum of money for the private power suppliers, Jayalal stressed.

According to Sri Lanka Electricity Act, the CEB could purchase power from the private sector only in an emergency situation, he said adding that the CEB’s top management had extended the agreement with ACE Power which had been blacklisted by the Public Utilities Commission of Sri Lanka (PUCSL) by violating the electricity act too.

The issue regarding the agreement had erupted when the ACE Power sent Rs. 840 Million bill to the board and the former Deputy General Manager Sujeewa Abeywickreme refused to approve the payment on the grounds that it was illegal, Jayalal added.

However, Abeywickrama was interdicted on July 2, 2018. The charges against him ranged from not carrying out assigned duties, not following directions given by the General Manager, to conducting his personal business and being an accused in several court cases.

JVP trade unionist Jayalal stressed that the corruption in CEB was continuing and one of the top official of the power sector had accepted that the agreement was illegal but the government had no mechanism to eradicate the corruption from the CEB.

LVSS said they would take legal action against the responsible person in the near future.

Meanwhile, CEB Engineers Union President Athula Wanniarachchi accused the government of non-implementation of a long-term power generation plan which had led the CEB to purchase expensive power from the private sector.

Wanniarachchi said that the CEB was currently paying Rs. 22 per unit even though the CEB was currently run on hydropower.

Since the board was in an agreement with the ACE Power, it had to pay the agreed amount whether the power generated by that plant was not utilized by the CEB, he explained.

Justifying the ACE Power for implementing business strategies, Wanniarachchi said CEB was helpless as it had no other option except purchasing power from the private sector to meet the demand at that time when all reservoirs were dried up without having proper rains for the catchment areas in April.

He further said the country should have more coal and hydro power plants to stabilize the energy demand without depending on wind and solar power completely.