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Sri Lanka to probe sudden power cuts, shut down plant owed Rs27bn: Minister

ECONMYNEXT – Sri Lanka has called for a probe into a shutdown of a power plant that was owed 27 billion rupees by state-run Ceylon Electricity Board, that led to sudden power cuts on February 03, State Minister for Power Mahindananda Aluthgamage said.

The private combined cycle generator, know as the West Coast plant, linked to Sri Lanka’s LTL group, was shut down for lack of fuel Monday, leading to 2.0 to 2.5 hour power cuts in many areas of the country.

“We want to find out whether this was an act of sabotage,” Aluthgamage said. “President Gotabaya Rajapaksa has said that there should be no power cuts.”

Aluthgamage said there was information that the 1,500 tonnes of fuel was available at the plant when it was shut down.

Sector officials say that it is highly unlikely that the CEB would shut down a plant when fuel was available.

“However there may have been fuel available at the bonded storage with Ceylon Petroleum Corporation,” the official said.

“That fuel is delivered to the plant when payment is made. That fuel is not with the CEB,”

Sri Lanka’s Power Minister Mahinda Amaraweera had intervened to get CPC to release fuel and re-start the plant, the ministry said earlier.

Sri Lanka’s power regulator, the Public Utilities Commission has also called for a report on the power cuts, saying the CEB is not allowed to cut power without giving prior notice.

The CEB is in a financial crisis, and the utility owes 32 billion rupees to Independent Power Producers, with the West Coast Power, the shut down plant, owed 27.1 billion rupees by January 31.

Aluthgamage said debts had mounted in 2019 but the CEB was now paying some of the debts, blaming the last administration for running up huge debts.

The total owed to IPPs had been brought down from 39.8 billion rupees on December 31 to 32.7 billion rupees in January 31, he said.

The CEB is in a financial crisis because there had been no tariff hikes since 2013.

An independent regulator was set up to ensure the economic viability of the sector following earlier crises, with six monthly reviews of prices following earlier financial crisis.

But the mechanism has failed and the sector is again in a crisis. (SB-Colombo /Feb05/2020)

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