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Power play continues over India’s Sampur plant
India’s National Thermal Power Corporation (NTPC) sent negotiators to Colombo this week in a fresh bid to resolve outstanding issues related to the Sampur Coal Power Plant.
Authoritative sources said the agreement is currently stalled over a formula to calculate operation and maintenance costs. These payments are to be met by the NTPC’s local project partner, the Ceylon Electricity Board (CEB), which will buy power from the plant.
In December, it will be seven years since the NTPC and CEB started talks to set up a coal power plant in Sri Lanka. Requests to the Indian High Commission for information on the current status of the Sampur Coal Power Project went unanswered.
The NTPC officials returned to India after discussions on Thursday. They will inform their higher-ups of concerns raised by the CEB, the sources said. Since no other decisions were taken, the points of contention remain.
Ironically, talks between the two sides are continuing despite the draft Power Purchase Agreement (PPA) –of which operation and maintenance costs is a component — recently receiving Cabinet approval.
In July, Power and Energy Minister Pavithra Wanniarachchi said construction on the long-overdue plant was scheduled to begin. But official sources said this could not happen unless the PPA was finalised. They said the CEB, the power purchaser, was wary over signing anything that would prove disadvantageous to it.
“The secretaries of the relevant ministries in India and Sri Lanka reached consensus some time ago that the CEB will pay actual expenditure when it came to operation and maintenance costs,” a CEB source said, requesting anonymity. “This was different from the original concept which had been to pay according to an agreed rate.”He said there was difficulty now in concluding the deal because actual expenditure could be variable, thereby resulting in the CEB having to pay whatever was cited by the NTPC as operation and maintenance costs. “Anybody could interpret actual expenditure to mean anything,” he said.
“The latest talks were aimed at resolving what would comprise actual expenditure,” he explained. “The CEB put forward its point of view and it was agreed to address the difference of opinion.”
“The subject of operation and maintenance costs is crucial as far as the CEB is concerned,” another official said. “We must be in a position to define the components that go into calculating actual expenditure. Both parties have to concur on this.”
Meanwhile, earlier differences over the “heat rate” of the proposed plant are “almost settled”, CEB sources said.
The memorandum of understanding between the CEB and the NTPC was signed in December 2006. The joint venture and shareholder agreement — setting up the Trincomalee Power Company — was signed in September 2011. The land in Sampur has long been sectioned off. Construction cannot start, however, till the power purchase agreements and the implementation agreement are signed.
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