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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2427

Amidst reports of severe discrepancies in the Norochcholai deal, work on Sri Lanka's first ever coal plant takes off on Thursday

By Munza Mushtaq – Reporting for Asian Tribune

Colombo, 10 May, With work on Sri Lanka's first ever coal power plant scheduled to begin on Thursday (May 11), informed sources told the “Asian Tribune” that the Norochcholai deal which was sealed recently contains many discrepancies including technical irregularities which could lead to many dilemmas when the plant begins operation.

The US $ 455 million plant which would be built in three separate stages of 300 MW each by China National Machinery and Equipment Import and Export Corporation (CMEC) will also be funded by the Chinese Government.

However though the signing of the Memorandum of Understanding (MOU) is completed, and work on the project is expected to take off on Thursday with President Mahinda Rajapakse being named as the Chief guest for the occasion, a three page report which was submitted recently to the Chairman of the Cabinet Appointed Negotiating Committee on the 3 x 300 MW coal power plant by two members of the Project Committee have highlighted the irregularities of the final technical document submitted to Sri Lanka by CMEC.

The two members, namely D.C.J. Saram and P.W. Hendahewa have in their report pointed out that the final technical document by CMEC consists of 'major deficiencies'. Citing reasons for their claim, the two members noted that CMEC had not identified a manufacturer or provided a shortlist of manufacturers for the majority of plant and equipment to be installed at the power plant. "The information of manufacturers' experience, their capability and product information such as catalogues have not been provided," the two committee members stated in their report.

Furthermore, the members also disclosed that CMEC, incidentally a Chinese Government owned company, had in their final technical document stated that almost all the plants and equipment are to be designed and manufactured according to Chinese Standards.

"These standards are not known to us. Even the plant and equipment that they had earlier indicated to be designed and manufacture, according to international standards are now going to be designed and manufactured under Chinese standards. As such, CMEC should design and manufacture the equipment according to international standards and if they carry out the work according to Chinese standards they should clearly state that the chosen standards are equivalent to or higher than the international standards. If there are any deviations, they should clearly indicate this," the three page report signed by Saram and Hendahewa said.

The two members have also recommended the obtaining of completed technical schedules and manufacturers lists prior to the commencement of price negotiations to lower the contract price as the prices quoted by CMEC are high.

Meanwhile, the three page report commenting on the generator unit size highlighted that the Turbine Maximum Continuous Rating (TMCR) is 315 MW while the capacity of the generator being offered by CMEC is 353MVA/0.85 Power factor which works out to only 300 MW. As such, they observed that 15 MW of electrical power would not be able to be utilized due to the under capacity of the generator. Utilization of this 15 MW would be vital to compensating the high quality auxiliary consumption of nearly 30 MW.

"Therefore we are of the opinion that the negotiations have to be conducted with the CMEC to obtain a higher capacity generator to match the turbine output; otherwise, the net electrical output of the plant would be limited to around 270 MW. Negotiations would otherwise have to be conducted to obtain comparable price reductions," Saram and Hendahewa stressed.

- Asian Tribune -

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