Sri Lanka power ministry raked over the coals on Turkey deal at COPE

ECONOMYNEXT – A parliamentary committee on state enterprises took Sri Lanka’s power ministry to task over a failed deal to buy electricity from Turkish powerships, with claims and counterclaims being made.

The Turkish powership deal involved a by-passing of competitive tenders for state-run Ceylon Electricity Board to buy emergency power.

Chairman of the Committee on Public Enterprises (COPE) asked Power Ministry Secretary B M S Batagoda, how the CEB was ordered from above to buy power from the Turkey firm.

Batagoda told the hearing that the cabinet decision was taken because technical evaluation committee were too frightened to evaluate the deal since they could be taken to the CID.

Cabinet however had decided power could be purchased as long as it was below the cost of other plants supplying to the CEB.

The cost proposed was around 24.85 rupees per unit and it could be over 25 or 26 rupees a unit when taxes were added.

CEB’s gas turbines, which were peaking plants, were now generating base load at around 35 rupees or more.

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Batagoda said a letter had come from the Turkish ambassador to Colombo after the Ceylon Electricity Board placed an advertisement for alternative sources of power.

But CEB officials denied that it was in response to the advertisement for expressions of interest saying there were about 17 responses, and the Turkish letter was not among them.

The bids for the EOI closed on May 02, 2019.

“This proposal was not related to the EOI, it came before bids closed,” the CEB official said.

The bids were being separately evaluated and a requests for proposals (RFP) would be made to short listed bidders, he said.

Handunetti said the power secretary had said forwarded the proposal from the Turkish company and questioned the link to the advertisement.

Batatogoda the Turkish ambassador had proposed the powerships to the minister after they saw the advertisement but it was a unilateral proposal.

He asked for a copy of the letter from the Turkish ambassador.

Handudetti said he knew taht at some ministries trainees were taken on a letter from the minister, but whether it was correct to take 200 MegaWatts of power in the same manner, without competitive tender.

Handunetti quoted from a letter sent by the Turkish company dated April 02, making reference to a meeting with the minister and the secretary ‘last week’ on a proposal made in February 2019.

CEB officials said the advertisement was called six weeks before May 02, which was around March.

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Handunetti asked how the proposal was made in February when the advertisement came later.

Batagoda said the Public Utilities Commission of Sri Lanka had later rejected the deal.

The rush to get Turkish powerships came from a government decision not to cut power during the Vesak season.

In any case in early 2020, Sri Lanka was against heading for a power deficit, Batagoda warned. (Colombo/Oct10/2019)