During a meeting between the Committee on Public Enterprises (COPE) and the Ceylon Electricity Board (CEB), it was revealed that the CEB had consistently purchased power at higher prices from the Ace Power Plant in Embilitpitya.
Therefore, COPE members revealed that the CEB incurs an annual loss of nearly Rs 300 million when purchasing electricity from the aforementioned power plant.
Despite the fact that the amount invested in the Ace Power Plant was recovered by 2015, payments for a unit of electricity were made using an old price formula, which included the capital cost every time electricity was purchased after that.
It was revealed that approximately 40-60 million units are being purchased from the Ace Power Plant at the moment.
COPE Chairman Prof. Charitha Herath, addressing the meeting, said that according to documents provided by the Public Utilities Commission (PUCSL) for the month of June, a unit of electricity is purchased from this power plant for Rs 101.16, with 95 percent of the capacity charge included.
When COPE member MP Harsha de Silva inquired how long the CEB had been purchasing power from the Ace Power Plant, Additional CEB General Manager (Transmission Division) Palitha Hendahewa said that the initial agreement was between 2005 and 2015.
He also noted that a unit of electricity now costs Rs 95.20.
Dr.Rohantha Abeysekara, Acting General Manager of CEB, explained that this includes a capacity charge as well as an energy charge. He added that the capacity cost has not changed, but the energy cost fluctuates in line with diesel prices.
MP Harsha de Silva questioned why a capacity and energy charge were included when the total capital investment had already been recovered.
“Let’s say it is 50 million units, and if you multiply the difference, which is Rs 6.00, it amounts to Rs 300 million,” Harsha de Silva emphasised, adding that the numbers presented by the CEB differ from the figures provided to COPE. So, conduct the audit. The audit should include all power plants, not just the Ace Power Plant. The most serious accusation in the country right now is that power is purchased at higher prices when it could be obtained at lower prices,” he said.
Meanwhile, a CEB official explained that if the power plant in Embilipitiya is not considered, the Southern Province will face 10-hour power outages. He said,“there was an urgent need to purchase power at the time, and we couldn’t wait for tenders to be called. As a result, they extended our agreement with them.”
Meanwhile, the COPE concentrated on the failure of 150 generators purchased for Rs 3,100 million in 2018 and 2019.
Dr.Herath brought this to light in order to investigate the Auditor General’s reports for 2017 and 2018, as well as the Ceylon Electricity Board’s current performance.
Members of the committee commented on this during the discussion of the 50 generators, pointing out that these generators were not operational at the time of purchase. So they inquired about the quality of these purchases as well as the price charged for them.
Officials present at the meeting stated that the purchases were inspected, that Rs 3,100 million was spent on the purchases, and that all 50 generators are still operational today.
The Committee Members also said that these generators were not operational at the start but will be after the modernisation. As a result, regardless of the time period in which they were purchased, a formal investigation into the purchase of generators that are no longer in working condition should be conducted.
The COPE Chairman suggested that the Auditor General’s Department receive a report within two weeks.