CEB engineers divided over Lakvijaya extension tender

Senior Ceylon Electricity Board (CEB) engineers are divided on whether or not a tender should be called for the proposed extension of the Lakvijaya coal power plant in Norochcholai.

Meanwhile, a Cabinet approval granted this week to a Power and Energy Ministry memorandum has unexpectedly raised the number of additional coal power units proposed for Norochcholai from one to two.

In November, the CEB issued a letter of intent (LoI) to China Machinery Engineering Corporation (CMEC) to carry out a detailed feasibility study for a fourth unit at the 900mw plant

in Norochcholai using the existing infrastructure and the same or advanced systems and facilities.

But Cabinet this week said it had approved two-- not one-- additional units of 300Mw each “as an extension to the coal power plant at Norochcholai”.

Outgoing CEB General Manager S.D.W. Gunawardana said he did not know who suggested a second unit at Norochcholai and that it was not in line with the utility’s own proposal.

The CEB had presented a draft Cabinet memo to the Ministry which, he said, had undergone changes by the time it reached the Cabinet.

Meanwhile, the thinking among some senior CEB engineers is that the contract to build the fourth unit must also be given to CMEC without calling for international bids. They say it is not technically feasible to alter common systems or infrastructure for a third party and that it also depends on the terms of the soft finance that could be granted by the Chinese Government for the project.

However, other engineers-- like Additional General Manager Susantha Perera-- point out that the LoI was issued only for the purpose of a feasibility study with no further strings attached.

While CMEC has shown an interest in doing the project, the thinking of the new administration, particularly the Ministry, is to go for competitive bidding for this and any other future power projects.

The regulator Public Utilities Commission of Sri Lanka will also turn down any initiative that does not follow a competitive bidding procedure, he warned.

The Cabinet decision this week also envisages the establishment of a 300Mw liquefied natural gas ( LNG) plant at Kerawalapitiya as a joint venture between the CEB and India/Japan.

However, the CEB’s original Cabinet paper proposed that the utility will call open international tenders for a floating storage and regasification unit ( FSRU) which is an import station for LNG-- without which the plants cannot operate.

“There were some Governmentto- Gover nment stories in the Cabinet paper,” Mr Gunawardana said. “What the CEB proposed was with regardsto an FSRU for which we categorically said there must be a tender. We have designed our own tender document with Asian Development Bank assistance. It is an IPP model tender document.”

He also said that, if the LNG power plants were to be built, it was important to fast- track the LNG fuel procurement processes.

Meanwhile, power sector analysts pointed out that, while President Gotabaya Rajapaksa’s English language manifesto said he wanted 80 percent of electricity to be from renewable energy sources by 2030, the current trend will miss that target by a wide margin.

Fossil fuels are receiving prominence on the ground, they said, with renewable energy being delegated to paper.