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Loss of Rs. 5 b through 2 private power agreements?

Electricity Users’ Association Convener Sanjeewa Dhammika claimed that two private power purchasing agreements are due to be approved by the Cabinet – one for 100 megawatts (MW) from the Ace Embilipitiya Power Plant, and the other for 20 MW from the Ace Matara Power Plant.

“The agreements are to be signed for three years although that much is not needed. The estimated loss due to this is Rs. 5 billion. This is a complete mafia that is serving a purposefully created power shortage and crisis. This month’s crisis was due to a fuel shortage, not due to a power shortage,” he claimed, speaking to The Morning yesterday (31 January).

Power Minister Gamini Lokuge said over the weekend that a cabinet proposal for the CEB to purchase emergency power, in the short term, from private power plants, was to be discussed at the Cabinet of Ministers’ meeting yesterday, while the CEB has already begun considering and evaluating private power purchasing plans.

In a statement to the press, the Electricity Users’ Association alleged that the CEB Engineers’ Union (CEBEU) was making the aforementioned private power purchasing proposal to the Power Ministry and suspected the union of obtaining a commission from each unit of power that is privately purchased during emergencies.

CEBEU President Saumya Kumarawadu was not available for immediate comment.

Last week, Lokuge alleged that “certain parties” wanted the Government to sign private power purchasing agreements, in order to acquire power at a higher cost. “Some people want private power purchasing agreements to be signed, which is why some engineers are accusing the Government of not taking alternate paths to avoid a power crisis. But we have taken our own measures to avert the power crisis, by depending on our existing power plants. We will have to consider these kinds of agreements in April anyway, when the drought worsens. We have not forgotten that, but we are trying to do this at the lowest cost possible,” Lokuge said at a media briefing.

He said that in the past, the CEB had received electricity from private power plants through such agreements, which had been terminated in April and June 2021.

“We wanted to extend them only temporarily, for maybe three or six months, but the companies did not agree to do so.”

Furthermore, Lokuge said that the cost incurred by the CEB reduced significantly this January (2022) when compared to January 2021. “We were able to reduce this cost because last year we mostly relied on coal power and hydropower to generate electricity. These days, we are focusing on running our fuel power plants.”

In 2020, the Cabinet did not grant approval to extend the power purchasing agreements with three private power companies – Ace Power Matara, Ace Power Embilipitiya, and Asia Power Sapugaskanda – which together supplied a total of 170 MW to the national grid.