Despite some teething troubles, NTPC’s first overseas coal-fired power project at Sampur in Trincomalee district is progressing, Sri Lanka has asserted.

Answering questions, Sri Lanka’s Treasury Secretary P B. Jayasundera dismissed news reports appearing in a section of the Indian press that NTPC was pulling out of the project. “In fact, the [NTPC] chairman and team were here last week,” he said, addressing the inaugural meeting of the Foreign Correspondents Association, Sri Lanka, for the year.

It is understood that the financial closure for the new joint venture company has been achieved, but negotiations were still on.

He characterised the negotiations as “tough” and “commercial” and both sides wanted to get a good deal.

Sri Lanka was wiser after setting up a coal plant with Chinese help, Noracholai, and was drawing upon this expertise in the negotiations.

Indian officials have held that the Sri Lankan side was changing parameters after agreeing on a set of parameters.

The negotiations were between “two commercial entities”, NTPC and Ceylon Electricity Board, CEB, and hence, these two have to agree on a host of issues, he added. These were being addressed.

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

Officials of NTPC and CEB will meet next month to discuss changes to the power purchase agreement and the implementation agreement.

Energy PSUs

Jayasundera said that state-owned Electricity and Petroleum companies, Ceylon Electricity Board and Ceylon Petroleum Corporation, will not be privatised.

They will be restructured and given more commercial autonomy to ensure profitability.

Both faced serious pricing issues because of input costs skyrocketing, and this was not passed on to the consumer.

(This article was published on February 27, 2013)
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