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Crisis looms as power deal stalls

28 Jul 2019

By Maheesha Mudugamuwa A power crisis is looming with the emergency Power Purchase Agreement (PPA) not yet approved. Cabinet approval has now been sought to push the agreement through as failure to do so could plunge the country into darkness. Institutional bottlenecks have prevented the procurement of electricity from two powerships on an emergency basis. Since the new commissioners of the Public Utilities Commission of Sri Lanka (PUCSL) had not been appointed until recently, the Ceylon Electricity Board (CEB) had not received the PUCSL’s concurrence for the PPA as per the provisions of the Sri Lanka Electricity (Amendment) Act No. 31 of 2013. The Sunday Morning learnt the newly appointed Chairman of the PUCSL, Senior Electrical Engineer Kithsiri Liyanage and other commissioners are expected to meet on Tuesday (30) to discuss the issue. Documents submitted to the Cabinet, seen by The Sunday Morning, show that Power, Energy, and Business Development Minister Ravi Karunanayake has requested the Cabinet to authorise the CEB to sign the PPA, subject to covering approval by the PUCSL as the PUCSL had not been reconstituted yet, and also to direct the Treasury to accept only the golden share for these two powership ventures in terms of Section 9 (1) of the Sri Lanka Electricity Act No. 20 of 2009 (as amended) considering this is a short-term procurement. In a cabinet memorandum, the Minister had explained that the Ceylon Electricity Board (CEB) has referred the PPA to procure barge-mounted power from the two ships to be located in Colombo and Galle to the Attorney General’s (AG) Department and the PUCSL on 18 June 2019 and 25 June 2019 respectively, but the board had not received clearance from both institutions. He further stated that the AG’s Department had stated that the requirement under Section 9 (1) of the Electricity Act No. 20 of 2009 (as amended) stipulated that the eligibility to apply for a generation license was mandatory. Since the commissioners of the PUCSL were appointed until now, the CEB had not received the PUCSL concurrence for the PPA as per the provisions of the Sri Lanka Electricity (Amendment) Act No. 31 of 2013, Karunanayake explained in his cabinet memorandum. Further, Karunanayake had sought the approval of the Cabinet to direct the AG’s Department and other relevant institutes to provide their clearance immediately for the PPA. When contacted, Karunanayake told The Sunday Morning that he was confident in clearing the bottlenecks and procuring electricity from a 200 MW powership which will be stationed at the Galle Port and 200 MW from a one which will be stationed at the Colombo Port on an emergency basis to avoid load shedding. Karunanayake said that even though the procurement of power from barge-mounted powerships was an emergency procurement, it had not been cleared owing to various legal and institutional bottlenecks. When The Sunday Morning contacted Power, Energy, and Business Development Ministry Director – Development and Media Spokesman Sulakshana Jayawardene, he said that on 7 July, the Cabinet had decided to refer the issue to the Prime Minister. A meeting with all relevant stakeholders including the PUCSL, AG’s Department, and Treasury was to be held to reach a conclusion on signing the PPA. According to Jayawardene, unless special approval was given by the Cabinet, the PPA cannot be signed without clearance from the PUCSL and the AG’s Department.

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