News
Bidding suspended as storm brews over Chunnakam wind power plants
View(s):The Power and Renewable Energy Ministry has suspended the competitive bidding process for two 10 Megawatt wind power plants in Chunnakam in the North after ‘concerns’ were raised by the Treasury. Power and Renewable Energy Deputy Minister Ajith Perera said the bidding process would remain suspended until the concerns raised by the Treasury were addressed.
However, he said the decision to suspend the bidding processes should not be construed as a move to veer away from the ministry’s policy of open and competitive bidding. The Sunday Times learns that the Treasury had raised issue because the ministry had adopted two types of bidding processes for the two plants, with one plant coming under a general competitive bidding process aimed largely at local operators, while the other plant was open to international competitive bidding.
Meanwhile, the Ceylon Electricity Board Engineers’ Union (CEBEU) alleged that the bidding had been suspended due to pressure exerted by some powerful ministers. CEBEU President Athula Wanniarachchi stated that they had received information that, at a meeting of the Ministerial Committee on Economic Management on May 25, some ministers called for the suspension of the bidding processes.
He said the existing wind power plants, which had a cumulative capacity of 130MW, were paid Rs. 20 or Rs. 23 per unit under a Standard Power Purchase Agreement (SPPA) signed between the CEB and plant developers. “Buying power at this rate is not economical for consumers or the country. We are paying the highest unit price in the world to these developers. The standard world price is around Rs.10-12 per unit,” Mr. Wanniarachchi claimed.
The CEB called for competitive bidding for these two power plants through newspaper advertisements published on December 14, 2015. About 20 bidders submitted bids. Mr. Wanniarachchi charged there was intense lobbying by interested parties to stop the competitive bidding process due to fears it would expose the fact that power generated by wind power plants could be bought at Rs10 per unit.