Industry

Sampur project uncertainty continues

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The uncertainty over the Sampur thermal power project continues as the NTPC, Indian partner in the coal-fired 500-megawatt (MW) project, is awaiting advice from the Central government on the issue of change of fuel for the proposed plant.

The issue has been raised by Sri Lanka, which apparently now favours liquefied natural gas (LNG) as the fuel.

In February this year, the project received environmental clearance and about a month ago, even a decision was taken by the Trincomalee Power Company Limited (TPCL), a special purpose vehicle floated by the NTPC and the Ceylon Electricity Board, to float bids for the project.

U.P. Pani, Director in the NTPC, says the Sri Lankan side has now sought a formal discussion to consider “the possibility of the change of fuel.” It is for the two governments to decide.

There is also a view in the Indian establishment that if the Sri Lankan government is insistent on the change of fuel, nothing can be done about it as, after all, the proposed plant is meant for the benefit of people of Sri Lanka. At the same time, the implications of such a move will have to be conveyed clearly to the other side. Apart from time and cost overrun, the entire process – from the project preparation to power purchase agreement to environmental clearance - has to be started afresh. It is for these reasons that the discussion between the two governments should take place, says an official.

On Thursday, Tilak Siyambalapitiya, senior energy expert of Sri Lanka, explained to the audience of a high-profile seminar on the India-Sri Lanka relationship why the project should not be delayed any further. Referring to the steep growth in energy sales in Sri Lanka this year, he said the growth rate for the period up to May end was 11.7 per cent, which was “very high.” Besides, no other major power plant was in the pipeline and only by 2020, a LNG terminal could be set up, if the decision to go in for LNG was taken now. All these might lead to an energy crisis in a few years and the focus would again turn to diesel power plants to overcome the problem. Advocating that the Sampur power project should be pursued, Dr. Siyambalapitiya suggested that some clauses in the power purchase agreement be renegotiated.

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Printable version | Jan 28, 2020 6:00:16 AM | https://www.thehindu.com/business/Industry/Sampur-project-uncertainty-continues/article14427982.ece

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