CMEC Sees Attempt To Disrupt Project
Industrial Park in Hambantota
- Moves to disrupt Industrial Park in Hambantota
- Norochcholai has a saving of more than USD one billion
- If the country switched to oil, the cost will increase
by Ifham Nizam
The proposed Industrial Park in Hambantota
The proposed Industrial Park in Hambantota would give immense benefits to the country, however, certain political moves are on the cards to disturb this massive investment project despite the blessings of Prime Minister Ranil Wickremesinghe, said a senior official of a top Chinese establishment which works closely with the Chinese government.
A senior official of the Chinese Machinery Engineering Corporation (CMEC) told The Sunday Leader that they have no political affiliations but China is always a true friend of Sri Lanka and wants to see the island nation prosper.
He declined to comment when asked whether India is blocking China’s latest brainchild after the Indian proposed coal fired plant in Sampur had come to a standstill.
“We can invest anywhere we want. China had partnered with a large number of countries worldwide,” he said.
China strongly believes that the Hamabantota Project is very crucial for Sri Lanka, because the area itself is not developed. However, he says there are few stumbling blocks.
He said that it is up to Sri Lanka to get the maximum out of this project. “We can assure that within 20 years Hambantota would be a modern city with the proposed projects.,” he added.
He also said that there talks about their land country’s first coal fired power project, citing examples that it is ultimately Sri Lanka that has gained from the project. “Already the cost is covered…local engineers are now capable of handling most of the technical issues etc,” he added.
The first coal fired power plant in Norochcholai has now contributed to a staggering saving of more than USD one billion, since its operations from March 22, 2011.
In other words, if the country had switched to oil, the cost would be six-folds more.
With receding water levels in the catchments, the Ceylon Electricity Board (CEB) think-tank is committed to provide electricity at any cost. CEB Chairman Anura Wijayapala said that their duty is to provide uninterrupted electricity at any cost. However, he agreed that if the First Unit is back in operation they could cut down on expensive oil.
The CMEC official also said that the hydro levels had come down very badly and even with the Unit one back in operation, the CEB should look into other options.
Already, the CEB has saved more than USD one billion in power generation cost by not going for alternate costly thermal power generated with oil.
The CEB Chairman stressed that if the plant was commissioned as scheduled in the year 2000, the country would have gained much more. He said that critics have to be cautious prior to protests and other campaigns and think about the country’s gains.
The CMEC countered allegations against their brainchild, stressing there were a number of reasons. First and foremost Sri Lanka was not in a position to tackle technical problems and the transmission lines were not suitable. However, the good news is that a majority of the issues were now identified.
New project in Hambantota
The Chinese government has expressed willingness to construct a USD 1.4 billion worth Liquefied Natural Gas (LNG) based venture in the Magam Ruhunupura Mahinda Rajapaksa Port (MRMR Port) in Hambantota.
The Sunday Leader learns that Chinese officials have made their interest known to Power and Renewable Ministry Secretary Dr. B. M. S. Batagoda and senior officials of the CEB that China would invest USD 1.4 billion in constructing a terminal plus storage complex along with an oil refinery and tank farm. They also expressed their willingness to fund a transmission line from the south.
“ A Cement project, ship yard and number of sub projects are on the cards,” the official said.
CEB senior officials recently stated the project was not feasible without a transmission line from Hambantota. But some engineers were of the opinion that the CEB is in not in need of 200MW.
Energy experts point out that Sri Lanka should go all out to get the maximum out of this project rather than thinking of options to build LNG elsewhere in the country.
However, under the projected generation plan Sri Lanka needs some 1,200MW additional capacity. Of the 400MW, 200 MW would be sold to the national grid with the remaining used 200MW for their industrial investment activities, the Chinese officials stressed.
Energy sector regulator – the Public Utilities Commission of Sri Lanka (PUCSL), is likely to endorse the project because it is negotiated on a G2G (government to government) basis.
The Chinese government has recommended that the Chinese Machinery Engineering Corporation (CMEC), the builder of the first coal fired power plant in Norochcholai, to construct the 400 MW LNG-based power plants in the port-related industrial zone in Hambantota. A few months ago, Chinese Ambassador Yi Xianliang told journalists that the recent breakdown at the Norochcholai Coal Power Plant was not triggered by substandard components used by the Chinese as alleged by parties with vested interests but were caused by the incapacity on part of the national grid and the transmission network.
Some engineers endorsed the statement of the Ambassador. They said that the network set up is not geared to handle such plants. The engineers also pointed out they cannot rule out sabotage too with the objective of discrediting the Chinese government.
The government is keen to go ahead with the Chinese government recommendation that the Chinese Machinery Engineering Corporation (CMEC), the builder of the first coal-fired power plant in Norochcholai, constructs the 400MW LNG plant at an industrial zone in Hambantota, Power and Renewable Ministry Secretary Dr. Suren Batagoda said.
The Sunday Leader reliably learns that an American firm has already completed a feasibility study on the project.
Experts point out that under the Electricity Act, such contracts cannot be awarded without tenders and the power sector regulator, the Public Utilities Commission of Sri Lanka (PUCSL) should be notified.
Meanwhile, they point out that electricity consumers will have to pay a higher price – at least four times more than the current cost – if the government decides to go for LNG in Sampur. It is understood that it would cost the CEB some Rs. 10 billion annually if the proposed Sampur coal power plant is converted into a LNG plant.
The CEB is concerned about the move to prepare the much discussed, long-term power generation.
When asked for his remarks, CEB Chairman Anura Wijayapala agreed with the CEB estimate for this project. He reiterated that they carried out the instructions of the government, and it is up to them to deal with the electricity consumers and cover up the additional cost needed through other means.
The CEBEU strongly believes that the government’s ad-hoc decision to convert the fuel option of Sampur plants to LNG would end up with a combined cycle plant running on diesel.
Citing examples, they said it would be similar to running the costly 300MW Kerawalapitya Plant which was initially planned to run on LNG but actually runs on expensive diesel even after eight years after its inception.
According to CEBEU President Athula Wanniarachcchi the bottom-line is, it is not prudent to replace the proposed 1700MW coal power plants (2x250MW and 4x300MW) at Sampur with LNG-fired thermal power plants in an ad-hoc manner.
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http://www.thesundayleader.lk/2016/12/25/cmec-sees-attempt-to-disrupt-project/
