No corruption charges against CEB and LECO after
Ninety-unit concessionery tariff will remain - Minister Champika
Power and Energy Minister Patali Champika Ranawaka in an interview
with the Sunday Observer complained that the media is slow to pick on
the positive developments in the CEB and LECO adding the great hype over
an electricity tariff revision cutting down the low income 90 unit
concession was just a opposition gimmick to rouse the masses. He said
the CEB is now in a stable position to meet the current demand for
energy in the country and action to streamline LECO operations resulted
in the company recording Rs.1 billion profit for 2011.
Q: People complain that corruption is rampant in the CEB and the
losses incurred due to inefficiency and corruption are ultimately passed
onto the consumers?
A: We have changed the CEB and LECO to a great extent. But the
reality is that we have to abide by the existing financial regulations,
government policies and administrative policies. People allege that CEB
is a corrupt body. But I must disagree with regard to some of the
Our main priority is to have 24/7 uninterrupted and reliable power
supply. That way, we may sometimes compromise financial expectations.
For example, if we can impose a power cut for one hour, the CEB could
save millions, but the loss to the economy will be ten times. That is
the reason why we don't allow the CEB to be driven by profits.
Second issue in the standard of our power supply. We have to maintain
voltage and frequency level at an international standard. If we
compromise on these issues, there will be profits.
Thirdly we have to protect low income groups. 78% of our consumers
are under 90 unit consumption level. From 2008 to 2011 there was no
increase in electricity tariff for this category of consumers.
No other service or good have been able to maintain a stable tariff
like this. Everything else has gone up. According to a new research
conducted by Colombo University with Public Utilities Commission on
relative expenditure of families, in 2005 people has spent 7% of their
earnings on fuel and electricity and now it has reduced to 4%. Their
expenditure on telephone bill too is 4% and for entertainment they spend
We have now started operating gas turbines and a unit cost for CEB to
generate power on gas turbines is Rs.50. But the Rs.3 per unit for the
90-unit category has not changed. These are the economic concerns we
have to endure due to the people friendly policies of the Government.
Government considers Power supply as a service, just like education and
Q: What is the situation with regard to LECO?
A: After I assumed duties as the Power and Energy Minister, we have
been able to transform LECO into a financially viable institution. It
incurred heavy losses in 2008, 2009 and part 2010. But it has been
turned around and made into a profit making entity. There are no charges
against LECO now. LECO profits exceeded Rs.1 billion this year.
If we are allowed to perform independently as commercial entities CEB
too could earn profits. We have proved that. CEB projected a loss for
2010 was Rs.40 billion. But we ended up recording a Rs.5 billion profit.
We managed to save Rs.30 billion due to Hydro power the balance Rs.15
billion save came due to efficient management, due to cost cutting and
Q: Will there be a revision in the electricity bill. There was a hue
and cry that the units 90 concession is going to be cut down?
A: There is no such decision by the Government. The decrease to 30
units was a decision taken earlier. We have stopped implementing that
decision. The low electricity tariff for less than 90 unit category will
not be revised.
Q: Norochcholai Lak Vijaya Plant received wrath from the opposition.
Why has it been closed for so many days after the commissioning?
A: We commissioned this plant in March 22. Thereafter due to various
technical difficulties and other things, we were forced to close down
this power station for 36 days.
Now it is running. After September 6, when the CEB Engineers took
over, its availability and also the running hours took a set back but it
has now gone up to a satisfactory level. We are taking advice from a
Special Chinese team. It takes time to get back to normal operations
when a new plant is commissioned, the manuals are in Chinese therefore
we have to get Chinese help until our officers are fully conversant with
the operations of the plant. The translations of the manuals are also
Q: There are allegations that this plant is substandard and running
it at full capacity is simply unrealistic? These allegations fuelled up
after a recent fire at the site?
A: The plant was a Government to Government agreement. Also CEB
people had been waiting for nearly two decades for a firm power plant
like this. This is a plant that can generate power on 24/7 basis. Our
current requirement for power per day is about 30- 32 GW hours. This
Norochcholai plant can generate 6.8 GW hours per day at its peak
The plant is a new one, the consultants fully recommended us that
this is a new plant. The CEB project team also recommended the quality
and relevance of this plant to meet the growing demand. That was the
reason why the contractors were paid the balance dues - on the basis of
We went by the recommendation of two bodies, the CEB project team and
an Independent Consultancy team. It was not a decision of the minister
or any other individual.
Q: You mean to say these allegations are baseless?
A: Delivery on the part of the Lak Vijaya at Norochcholai has been
below expectations. That is true and we will not try to hide it. We
expected the system control staff to plan 1560 GW hours for the year
2011. Unfortunately this plant, due to unforeseen problems, delivered
about 1000 GW hours of energy. This deficit is expected to seriously
affect the financial position of the CEB.
But most of the allegations by the opposition are baseless. The
allegations that this is a substandard plant, etc. are not true. These
baseless allegations will have a negative impact on the close relations
between China and Sri Lanka. We were badly in need of a power plant that
could guarantee firm energy. We have to rely on this for at least 20
years. Without Lak Vijaya, CEB would not have been in a position to
supply power for entire 24 hours continuously. We have to run this power
station 24 hours a day.
There is a defect liability period of two years for power plants like
these. The contractors have to bear costs incurred due to defects and
breakdowns during this period.
Due to various problems, technical, familiarization and others there
may have been certain delays. We have to improve our efficiency
gradually. When the first shipment of 65,000 mt of coal arrived, CEB
staff took 34 days to unload that shipment. For the last shipment they
took only nine days.
There are a number of power projects to be commissioned this year.
How much do you expect this will add to the national grid?
Yes there are some renewable energy sources to be commissioned, such
as wind and solar power. As far the renewable energy is concerned there
is a serious drawback. If the wind is there the energy will be there,
the same goes to the solar power but you cannot dispatch this energy
when you need it. For example our peak consumption is from 6pm to 10pm
but the sunlight is not there during this time.
But the large hydro projects like upper Kotmale, Lak Vijaya and
Kerawalapitiya can generate power around the clock. That is why they are
called firm energy. Other variable energy sources cannot be relied on
for an uninterrupted power supply.
We had a bad experience during this year, because of the change in
climatic conditions. We must build a power system to withstand that kind
of variations. To meet this we have to plan another 2- 3 firm-energy
power stations to supplement the base level and the medium level.
Q: What are the plans on the table to achieve this?
A: As far as firm energy is concerned we are going to get another 300
MW to the national grid from first quarter of the 2013 from Lak Vijaya
followed by another 300MW in 2014.
Then next year we will be commissioning Upper Kotmale, it will
generate 150 MW. We are planning to commission the Sampur coal power
plant by 2016. We are confident that the CEB will be in a comfortable
position by 2016. The uncertainty and mismatch between the demand and
supply will be largely reduced by 2016.
Q: There was uncertainty, even this year, over interruptions to power
supply due to dry weather. But fortunately the rains arrived and eased
off the condition. When can we completely overcome this uncertainty?
There have been strange situations. But I can vouch for continuous
supply of power even without proper rainfall. CEB's installed capacity
now is bout 3000 MW. Our maximum peak demand is about 2000MW. We have
But there had been strange situations. Sometimes the plants suddenly
experience breakdowns. This happened twice this year.
In June five basic thermal machines broke down. I don't know if this
was due to sabotage. On April 2, the day of the world cup finals, the
same thing happened. I can't explain how these things happen.
In March 2004 a fire broke out. We had an investigation but there was
no proof of wrong doing. These are unforeseen challenges. Some of the
plants we have to shut down due to annual maintenance. For example in
Laxapana there is a long overdue shut down. After 60 years of operation
there has been no replacement or refurbishment done at this mega plant.
The Ministry has now given them the green light to go ahead with the
refurbishments to replace the old parts with new ones at the Laxapana
complex. It will be completed within the next two years in several
phases. This will be very advantageous to the CEB since the installation
of new machines will certainly improve its efficiency.
Once these projects are completed the CEB will be in a stable
position. But, as it is, we can meet the current demand. We have the
capacity to supply the demand even without any rain. The hydro power
generation is about 12 per cent at the moment but we are still supplying
Q: There is a second coal power plant that is to be built in Sampur
with Indian assistance. A lot Environmental issues are connected to coal
power generation. When will we be able to finally shut down coal power
stations and rely on an advanced technology of power generation ?
A: As far as the Sampur station is concerned the feasibility is under
way. The report will be available by the end of January. All the
environmental problems will be addressed in that report.
As far as the global scenario is concerned in 1990 the UN and World
Meteorological Association combined with United Nations Environmental
Program formed a scientific body called Inter Panel Commission on
They have deeply studies the issue of climate change and global
warming and arrived at a conclusion that global warming is real and it
may cause serious damage to our planet.
In their second report released in 2007 they identified a carbon
budget for the whole century. The limit is 2 degrees centigrade. If the
mean temperature of this planet is going to increase by 2 degrees
centigrade there is a 50 per cent probability for serious environmental
calamity. It could sometimes mean the end of human race.
In addition they predict 25 of the all the species living on the
planet will be threatened by this phenomena.
Thus the carbon budget was introduced. At the Durban conference it
was concluded that this increase in temperature is going to happen in
2035 not in the next century. If we are not going to cut down on global
emissions by 2015 we will be in trouble. So according to their
calculations all the coal power plants should be shut down before 2013.
If not we will face an unimaginable scale of environmental disaster. It
could be cyclones, flash floods, droughts, earthquakes, tsunamis.
Q: Has there been any internal debate as to how Sri Lanka should
prepare for this ?
There has been no such internal debate so far. We are a very low
emitting country compared to others in the SAARC region. With the coal
power plant in Puttlam, our current per capita emission level is about
700 kg per annum. With Lak Vijaya in Norochcholai and the proposed
Sampur station this may be risen up to about 1000 kg. According to the
carbon budget by the IPCC a single individual can emit 2100kg per annum.
We are already a very low emitting country. But as far as India is
concerned they have already reached their quota.
This figure for USA and Canada is about 25,000. Unfortunately Canada
has backed out from the Kyoto protocol.
They are the worst polluters of the planet. There will be green
sanctions imposed on these countries.
Sri lanka too is concerned about these issues and this is the reason
why we have changed our energy policy from 'least cost' to a new one
which will address the three key concerns 'economy, energy and
The decision to add 650 MW of wind power to our system till 2020 and
another 300 MW of mini hydros was in line with the environment
obligation. We have also formulated a long term generation plan keeping
this in mind.