Taxpayers burdened by Rs 1.85B in 12 Days


The taxpayer will have had incurred an additional cost of at least Rs 1.85 billion in the 12 days beginning 15 August to Friday (26 August) because of the burning of the expensive diesel to provide electricity to the country due to the malfunctioning of two of the 300 MW machines of the 900 MW (3X 300 MW) Norochcholai Coal Fired Powered Plant (NCFPP) since 15 August, thereby depriving the country of the cheaper ‘coal electricity’ as an alternative, Ceylon Electricity Board’s (CEB’s)  Saturday’s (27) data showed.

Such additional costs on Friday alone amounted to at least Rs 0.14 billion. All costs are based on Central Bank of Sri Lanka’s (CBSL’s) last year’s electricity generation cost estimates. According to the authorities if the NCFPP is fully operational, it has the capacity to meet 45 per cent of Sri Lanka’s electricity needs, but more often than not it has provided only a segment of this need, for instance on Friday it was a mere 20 per cent, resulting in the CEB having to depend on the more expensive diesel to fill the breach.

Further, since the breakdown of the second 300 MW NCFPP machine on 15 August, the consumer has to suffer record power cuts which were increased from one hour to three hours beginning from 16 August. The first of such three NCFPP machines have been out of order since 27 June and since 15 August, only one of three NCFPP machines has been functioning, providing only 300 MW of electricity.

NCFPP was built by the Chinese when Mahinda Rajapaksa was the President at a cost of US$ 1.35 billion to the taxpayer in a mix of commercial cum “concessional” loans, sans tender call. However, since the commissioning of NCFPP a couple of years ago, it has, more often than not, like now, has been at least partially out of order.

All costs are based on last year’s estimates, where, according to the CBSL, it cost the CEB

Rs 10.87 to manufacture one unit (one kilo Watt hour (kWh)) of ‘coal electricity’, Rs 29.01 to manufacture one unit of “’diesel electricity’ and Rs 30.35 to buy one unit of ‘diesel electricity’ from the private sector/independent power producers (IPPs). According to the CBSL, last year, the second most cheapest mode of electricity generation was coal, while the most expensive was ‘IPP diesel’ and the second most expensive, ‘CEB diesel’. Meanwhile, the cheapest source of electricity generation was ‘CEB hydroelectricity’, which, according to CBSL, cost the CEB a mere Rs 1.67 per unit last year.

By Paneetha Ameresekere