PowerGrid’s Lankan project put on hold

PowerGrid’s Lankan project put on hold

New Delhi: An ambitious project for supplying power to Sri Lanka using a 200km undersea cable has been put on the back burner because the island nation has so far shown no interest in the proposal.

The project is part of an attempt to help enhance economic and political ties between India and Sri Lanka.

“There has been no initiative on the part of the Sri Lankan government," said a senior Power Grid Corp. of India Ltd (PGCIL) official, who did not wish to be identified. “In such a situation, we cannot do much."

The project was to be implemented by PowerGrid, India’s main power transmission company. It is unclear why the Sri Lankan side has not responded to the proposals.

This is not the first time that the project has run into problems. The proposal earlier faced opposition from the Tamil Nadu government as reported by Mint on 14 February.

The project hoped to supply 1,000MW power to Sri Lanka, boosting its power situation. Sri Lanka has a total power-generation capacity of only 2,500MW, against India’s capacity of 130,000MW.

The India-Sri Lanka transmission link was to run from Madurai in Tamil Nadu to Anuradhapura in Sri Lanka’s north-central province.

The transmission project, with a budget of Rs2,000 crore, was to be funded by Sri Lanka, for which PowerGrid has already sent a proposal to the Sri Lankan government. The proposal details how the undersea high-voltage power cable would be laid out.

“This situation has two sides to it," said Hitul Gutka, an analyst at Mumbai-based India Infoline Ltd. “On the one hand, as the power demand within the country is so high, any excess capacity can easily be absorbed within India. On the other hand, there will be a minor revenue hit on the part of PGCIL as it would have been paid to undertake the work."

The transmission link is not the only project between the two countries. NTPC Ltd has drawn up plans to set up a 500MW coal-based thermal power plant in Sri Lanka as a joint venture project with the Ceylon Electricity Board, involving an investment of $500 million (Rs1,995 crore).

Other PSUs such as Indian Oil Corp., which are present in Sri Lanka, plan to increase their presence in that country.