NTPC and CEB had signed an agreement in 2011 to set up a coal-based 500 MW plant at a cost of Rs. 4,000 crore at Trincomalee

Work on the power project at Sampur in Trincomalee, Sri Lanka will commence soon, Sri Lanka’s Minister for Power and Energy Pavithra Wanniarachchi said in Colombo on Monday.

The project is to be carried out jointly by the National Thermal Power Corporation (NTPC) of India, along with the Ceylon Electricity Board (CEB), an agreement for which was signed in 2011. About two years after the agreement was signed, the initiative — NTPC’s first overseas coal-fired power project — saw little progress due to various disagreements between the two partners.

Monday’s announcement about the project taking off was made at a meeting chaired by Sri Lankan President Mahinda Rajapaksa here, with representatives of local media in which the recent electricity tariff hike in Sri Lanka came up for discussion.

The hike, coming into effect in a few weeks, has evoked considerable concern and criticism in Sri Lanka.

Chairman of the Ceylon Electricity Board W.B. Ganegala told The Hindu that the Minister said negotiations were nearly over and that the government was keen on commissioning the plant by 2016. “Discussions are on currently,” he said.

NTPC sources in New Delhi confirmed that it has decided to go ahead with the 2X250 MW thermal power project in Trincomalee. The breakthrough came after both the sides held talks in New Delhi recently and decided to take up the project in right earnest.

Both sides have discussed the changes for the power purchase agreement (PPA) and the implementation agreement for the 2X250 MW project that will run on imported coal.

NTPC Chairman and Managing Director, Arup Roy Choudhury said that NTPC is going ahead with the proposed 2X250 MW coal based joint venture in Trincomalee.

A joint venture company (Trincomalee Power Company Limited) between NTPC and Ceylon Electricity Board (CEB) has already been incorporated and the project agreements, including PPA, are expected to be signed soon, he added.

NTPC and CEB had signed an agreement in 2011 to set up a coal-based 500 MW plant at a cost of Rs. 4,000 crore at Sampur. In fact, Mr. Choudhury had led a team of NTPC officials to Sri Lanka in February to hold talks on the project and give a new lease of life to the project that was stuck for some time and was reportedly facing incomplete closure.

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