Statement by SPUR on Rajesh Kurup’s article on Adani’s Wind Power Proposal to Sri Lanka
Our attention has been drawn to an article written by one Rajesh Kurup, courtesy the Financial Express, pertaining to the Wind Power Project proposal that has been made to Sri Lanka by Adani Group of India. We wish to make the following clarifications, for better understanding of the facts by the readers, as the said article appears to be containing incorrect and distorted information. First and foremost, it must be said that the quoted and compared tariffs from renewable and traditional energy sources are misleading. The compared cost from traditional sources appears attributable to diesel power generation. Diesel is backup generation, but not for baseload operations in a power system. For some reason, the cost to CEB of power generation from coal energy, approximately Rs 18 per unit (at the present international prices of USD 110 per tonne of coal), which is much lower than Rs 25 per unit to be supplied by Adani wind power plant but has not been compared or cited by the writer Rajesh Kurup. If such was compared, the reader would immediately perceive that Adani’s tariffs become much more expensive than the present electricity generation using conventional fuels. Besides, the formula-based adjustment of power purchase tariffs from renewable projects less than 10 MW” have not been undertaken since 2022. Had the current dollar
exchange rates and bank interest rates are duly taken into account, the feed-in tariff adoptable for all renewables including rooftop solar and projects less than 10 MW by now should have been lesser than Rs 20 per Unit of electricity. Thus, it may be questioned from the Governmental authorities whether it keeps on postponing adoption of the formula-based tariff calculation to enable this sort of irrational comparisons, and for some elements to twist the picture to show that Adani project is more economical to the Government than the alternatives. We wish to state that the tariff offered by Adani has to be compared against the current electricity generation cost, figuring around Rs 15 per Unit, as we learn, at the Mannar wind power project of CEB; and if anyone does so, will perceive that going for Adani project, at the claimed tariffs, would be economically disadvantageous for Sri Lanka.
Secondly , the writer is surprisingly silent about the fact that the tariff offered by Adani is not based on any competitively bid procurement. One of the most fundamental premises of Good Governance is transparent competitive bidding when even a packet of paper clips is purchased by the Government, and we would urge the writer to comment as to how he could justify these tariffs, not determined
through such competitive process, as the most economically procurable rates for the CEB. Since Adani is not the Government of India, but only a commercial entity of Indian origin”, such a procurement without competitive bidding is contrary to the specific provisions of the prevailing legal provisions. We hope that the stakeholders in Sri Lanka and the political representatives of the public will prevent signing of such a non-transparent and apparently uneconomical deal with Adani. It may also be emphasized here that the Supreme Court of Sri Lanka, it is recent determination, has categorically insisted that procurement of electricity by the State entities has to be compulsorily on competitive basis. It is a matter of concern that this Adani offer, not based on any such competitive process, is rushed now, so that the contract could be signed before the new Act, including the said amendment specified by the Supreme Court of Sri Lanka, gets implemented. We specifically mention that any supplementary cost the Government would incur owing to any sealing of such procurement
deal without competitive process amounts to nothing but corruption, and should be investigated at length.
Thirdly, we wish to state that Sri Lanka and its economy is not the private property of any political party or any Government in power. Those belong to the general public and their future generations.
The decision makers in any given time have to safeguard such sustained welfare of the nation. Therefore, we urge that the proposed Adani project be subject to competitive process and entertain further bids from other potential investors, before determining which offer is most competitive in terms of tariffs and thereby most economically advantageous to Sri Lanka.
Finally, let it also be reminded that renewable energy resources belong to the Republic (ref. Sri Lanka Sustainable Energy Authority Act), and it is the responsibility of Sri Lanka Sustainable Energy Authority (SLSEA) to safeguard the resources and ensure its optimum use for national economic benefit.
RANJITH SOYSA
spokesperson /SPUR – Australia
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