Economic blunders

How prudent is it to let go of a power station and let it be sold for scrap at this juncture in Sri Lanka? In the middle of a power crisis of catastrophic proportions? Where industries are staring at a dark abyss of continued power cuts. In the midst of a massive economic downturn? I am referring to a power plant in Sapugaskanda, which is currently nonoperational, waiting either to be commissioned again, or scrapped.

Scrapping seems to be its fate going by the reluctance of government to get it online again. This power station has let go of the engineers and personnel already. Only the power station awaits its fate, gleaming and maintained in impeccable spruce condition. How prudent is it to let go of a 50 MW such power station and scrap it? At the same breath we are moaning that no power stations have been added to the grid in the last five years! And we’re suffering the repercussions of it, like power cuts lasting about four to five hours. What sense does it make to scrap an existing operational power plant maintained in prime condition? This is not an emergency power genset. I think the government is smudging the line between emergency power and standard regular power suppliers. The PUCSL has started to call the three IPP’s currently standing decommissioned as emergency power. They are not emergency power suppliers. They have been a part and parcel of power generation plan of Sri Lanka for the past 22 years. The one in Sapugaskanda is a power station built in 1998 at an exorbitant cost at the time. The people of Sri Lanka has paid for building it. As well as for operating it and supplying electricity for the last 22 years. They should be the rightful owners of this fully paid up power station by now. It is fully capable of generating for another few good years to come. Having recovered the investment and costs, the company is able to offer CEB unparalleled thermal electricity unit rates of Rs 20/. It also is an IPP operating on cheap heavy fuel oil, which is only a byproduct of CPC’s refinery processes. Even if it was imported it’s the cheap leftover stuff in the petroleum industry, unlike diesel. A ministerial visit by the current Power Minister saw the startlingly new condition of it compared to other state-run power plants. So, it beats all reason and credibility that at the next turn, the Power Minister is seen shedding tears the country lacks power generation plants. This, while they are letting go of 50 MW generation plant for no apparent reason, beats all rhyme and reason. In fact, all the three IPPs have laid idle for nearly an year, leading up to the current power situation in the country, by over using hydroelectricity. And they are still idle in the midst of the power crisis.

The shuffling and reshuffling of this ministry also would have added fuel to the already burning power ministry. The plans have changed along with each minister sitting at the helm. Three ministers in two years. Dallas Alahapperuma saw the long-term generation paths clearly, alongside the President’s renewable energy proposals. He proposed viable plans, even in the back drop of the looming power crisis with screaming consumer demand no match for the frugal supply available with the CEB, for not just for now, but for a few more years to come. He fore saw the current blackout looming then, and made plans accordingly. I think they must have been scuttled when bungling Lokuge came in and bungled there for a few months before being replaced with Rajapaksa faithful, Pavithra Wanniarachchi. What her plans are, if any, nobody knows yet.

In the middle of this chaos somehow the Cabinet approved the commissioning of the three IPPs which have been idling last year. This happened only two weeks ago. The CEB welcomed this decision with a huge sigh of relief as a short-term measure to handle the power crisis in full swing by now. The directors of the company heeded the appeal of the government to help the country in its hour of need. They complied. It conceded a one-year contract, to a six months contract. It further reduced the rates. Everything was ready to get started to supply electricity to a country starved of power, 180 MW altogether in a few days, it seemed. We, the public of Sri Lanka, could have finally breathed a sigh of relief of coming out of the darkness of five-hour power cuts. The factories, restaurants, etc. could get going about their business again. But No! The devil struck this time, in the form of the PUCSL guru. He threw a spanner in the plans by demanding to cut down of prices further. He wants to purchase electricity like we buy peanuts or pineapples from a street vendor. A Little ‘gotta’ at a time. Even CEB-operated power stations will not accept such terms he is demanding. For example, now he wants this particular power station to come online for a few weeks only. The reason, just to use up some CPC fuel stored in their silos! He wants a power station to recruit a whole team of operational personnel for just three weeks of operation! Where does Sri Lanka go after three weeks? Back to darkness. Its clear PUCSL head is incapable of seeing the bigger plan at all. He’s got the blinkered view of his job, that is only to cut the costs. Even at the expense of people suffering power cuts. Funnily, In Friday’s papers, PUCSL is warning Sri Lankans to expect power cuts even if all power stations in Sri Lanka are running!! What a joke. May be its cheaper for them to keep the people in the dark.

So unfortunately, at this juncture, this particular IPP Company is saying enough is enough. They have made their money. And recovered their costs. They are going to dismantle it and sell it. To Africa or Asia somewhere and make some more money. This is a power station that should rightfully belong to the people of Sri Lanka who have already paid for it. To facilitate this, the company have offered the whole plant for one dollar to the CEB at the end of a one year’s contract. Alternatively, they have offered to operate it, even for three more years and give power at an unmatched price of Rs 20/ per unit. But the government is not interested in either of these proposals. They are too busy building new power stations at exorbitant costs. Or purchasing power from emergency power suppliers at double the price of the IPPs, which is Rs 45/ per unit!! That was before the diesel price hike. Since these emergency power sets are diesel operated, Now, it would be about Rs 60/ per unit I should think.

How did we end up in such a decision-making mess? Different ministers had different manipulations and schemes after their own hearts. PUCSL have their own tunnel-vision cost saving ideas. The government has the big plans. The CEB have their own long-term least cost plans in their pocket. These don’t amalgamate nor match with each other to give Sri Lanka a cohesive long, medium and short-term power plan. The on again, off again, contract to the IPP s is a prime example of the flaws in governments decision making process. It’s only a week ago that it came up in the newspapers of the cabinet approval for re commissioning of IPPs. But this week, PUCSL’s cost saving plan for the government, has scuttled it. The ministers might have a different game plan altogether. She seems to pinning her hopes in the sky, the rains, just like her predecessor Ravi Karunanayake did. He even squandered millions of rupees on cloud seeding/ rain-making because that was his own pet idea. He managed to plunge the country into unprecedented darkness not seen since 1997. How can Sri Lanka come out of darkness in midst of such chaotic decisions? And indecisions? Over to you, Mr President, and Power Minister. You are the decision-makers Sri Lanka appointed two years ago. Sri Lanka trusted you to get them out of the darkness, not just physically, but of ministerial incompetence, lack of planning and corrupt officials. Please do your job. Make the right decisions.

Concerned citizen