Sahashdhanavi and LNG: Search for real costs in the midst of obfuscation

SAHASDHANAVI power plant has been in the news from April this year due to multiple controversies, from the infamous picture of Dr. Tilak Siyambalapitiya signing the Power Purchase Agreement (PPA) with Deputy Chairman Ravindra Pitigalage.

- By Dr. Vidhura Ralapanawe

It was soon revealed that Dr. Siyambalapitiya was also the Chairman of LTL Holdings, thus appeared to be in flagrant violation of the CIABOC Act of 2024 provisions on conflicts of interest.

Soon it transpired that the cabinet approval for the PPA was obtained by showing a ridiculously low figure of Rs. 20.15/kWh, using historical rates for diesel, Natural Gas and exchange rate. PUCSL issued a clarification letter to the ministry, that changing these incorrect information would lead to Rs. 43.25/kWh and if LNG is not procured, the costs ballooning to Rs. 72/kWh.

Dr. Siyambalapitiya soon departed, and his roles at the helm of CEB and LTL Holdings were assumed by Professor Udayanga Hemapala, the Secretary of Ministry of Power, raising even bigger red flags on conflict of interest. During his period at the helm, both CEB and Sahasdhanavi issued statements giving figures close to what PUCSL stated, confusing the public.

When Professor Hemapala was asked about the cost of Regassified Liquefied Natural Gas (R-LNG) based power, by a journalist, he was unable to give a figure albeit heading all three institutions! Talk about accountability!

But none of these figures are closer to the real cost of the power plant, due to flawed assumptions. Here, I am using the official data to construct the cost of a unit of electricity for Sahasdhanavi for the year 2028.

Assumptions and the financial model