Sri Lanka’s CEB to re-negotiate heat rate of West Coast plant

Apr 23, 2013 (LBO) – Sri Lanka’s state-run Ceylon Electricity Board will re-negotiate the heat rate of a controversial 270 MegaWatt power plant, officials said, which was brought in to the grid without competitive bidding. Power ministry secretary M M C Ferdinando, responding to questions at a meeting of media heads with President Mahinda Rajapaksa, Monday said action will be taken to re-negotiate the heat rate of the plant as permitted in its power purchase agreement.

Commissioned in stages from 2008, the West Coast combined cycle plant, built by Sri Lanka’s LTL group with capital contribution from state-managed agencies including the Employees Provident Fund, is the largest private plant in the system.

No Competition

But it came into the system not only without competitive bidding, but without a guaranteed heat rate which determines the efficiency at which fuel is converted into electricity, an unusual occurrence in the global power generation landscape according to critics.

A turnkey contractor is usually expected to guarantee a heat-rate, which along with a capacity charge helps an independent power producer (IPP) win a contract under a competitive bidding process.

The West Coast plants