In a hole over coal

A controversial power plant pits a bishop's word against a president's silence.

Sri Lanka's most senior Catholic bishop recently made a startling announcement at the country's biggest annual Catholic festival. President Chandrika Kumaratunga had scrapped plans to build a controversial coal-powered power station on the west coast 100 kilometres north of Colombo, said Bishop Frank Marcus Fernando, who claimed that he was informed personally of the fact by the president.

The crowd of several hundred thousand faithfuls, gathered at the feast of Saint Ann in the town of Talawila in August, burst into thunderous applause. National newspapers reported the speech on their front pages the next day, for it meant the end  of years of acrimony between the church, environmentalists and residents of the area on one side, and the government on the other.

But strangely, the government stayed tightlipped on the issue. Journalists who tried to get comments from the president's office, got none. A few days later, came a statement from the Ceylon Electricity Board, the state-owned power company that is building the 600 million-dollar station, that contradicted the bishop's announcement. "We have not received instructions to stop work on the Nuraicholai project," said D.C. Wijeratne, additional general manager at the CEB. "Work is continuing." Bishop Fernando, however, stuck to his statement. "She said the government is returning the 600-million-dollar soft loan to the Japanese," he told reporters. But the president continued to remain silent.

Nervous Nuraicholai
The conflicting claims underline the intensity of the struggle over an issue that is threatening to derail Sri Lanka's already-fragile economy. CEB officials say that increasing demand for electricity, rising by an annual 8 percent, will cause a shortfall in supply by 2004, even with the construction of several more oil-fired stations.

Compounding the problem is the government instruction that the CEB provide power to 80 percent of the island's houses by 2005, up steeply from today's 52 percent. A coal power station must be ready by then, the CEB says, or there will be daily power cuts. That will surely destroy the economy since foreign investors are not likely to be interested in a country that doesn't have a reliable power supply, which, as the CEB says, means economic disaster.

But villagers at Nuraicholai, where the coal power station is being built, are staunchly opposed to the project, which they say will bring acid rain and soot down on them, and ruin their fields. This area, bound on one side by the sea, is predominantly Catholic, and the clergy rushed to the defence of its flock. The possibility that the power station will cause acid rain and harm the 150-year-old St Anne's Church, 20 kilometres away, galvanised the rest of Sri Lanka's Catholics, who form 8 percent of the population.

Environmental organisations are also in the thick of protests, lending scientific weight to the opposition. The southwest monsoon winds, blowing for half the year, may spread the acid rain as far as the ancient Buddhist holy city of Anuradhapura, while affecting the much-nearer Wilpattu National Park, the country's largest wildlife sanctuary. CEB officials, however, disagree with such assessments, and have promised to install state-of-the-art systems that will remove almost all harmful chemicals from the power plants' emissions.

Unfortunately for all concerned, with presidential and general elections scheduled in less than a year, the politicians are trying to placate both sides, rather than deal with the issue once and for all and be done with it. With a one-seat majority in the 225-seat Parliament, President Kumaratunga can't risk alienating the Catholics. But neither does she want to be blamed for the possible economic crisis in 2004, predicted by those in favour of the project, if the power station isn't built.

Rumours and fear rule Nurai-cholai. With no clear government policy, politicians and officials in the area are unsure of themselves when they face the protesters. Protests at the site have often turned violent, as happened two years ago when police fired into a crowd of demonstrators, killing one person. Threats to call in the armed forces and push the project through, made by Minister of Power Anuruddha Ratwatte, who is also the deputy defence minister, have only served to strengthen the resolve of those opposed to it.

Energy urgency
For more than a century, Sri Lankans depended on the hydro-electricity generated by the country's plentiful streams and large rivers. Ranging in size from tiny village turbines producing a few kilowatts to power stations at huge dams providing up to 250 mega-watts, hydroelectricity powered everything from street lamps to factories.

But by the mid-1980s, almost all sites suitable for damming rivers had been exhausted. Alternative sources of energy were needed and needed fast. That was the time when the country was surging ahead economically. Diesel power was one option, and a series of diesel-powered stations came up. More are under construction at present and by 2003, oil-fired stations will account for about 40 percent of the nation's power, an alarmingly high dependency for a country that doesn't have its own oil. These power plants come with a heavy price tag, for although they are cheap to build, running them is another story. "Sri Lankans already pay a very high price for electricity. The more we add oil-based stations, the more the price will increase," says CEB's Wijeratne.

Since other sources, such as wind, solar power and natural gas, are also expensive, coal seemed to be the only choice left. Coal is cheap, and available in plenty in India, Australia and many other countries bordering the Indian Ocean. The CEB thus drew up a plan to build a series of coal-powered stations, according to which, coal will supply 65 percent of the country's power by 2012. That will be as much power as the 1200 megawatts produced by all of the hydro and diesel power stations today.

Initially, in the mid-1980s, the project was to be located at Trincomalee, the huge port on the northeast coast. But international financiers shied away, since the area was in the middle of Sri Lanka's ethnic conflict. Next, a town on the south coast was found, but a Marxist uprising against the government with roots in the south, convinced the then President Ranasinghe Prema-dasa to abort the plan. Other sites which were scouted were found to be unsuitable.

Finally, the CEB picked Nuraicholai, and the government gave the green signal. The Japanese government pledged to fund the entire project. Preliminary work has now almost been completed, and the power plant is scheduled to be in operation in 2004. The Nuraicholai station would initially generate 300 MW of electricity, and later be expanded to produce 900 MW. A second power plant is planned for the south coast, but it has already drawn opposition from environmentalists. The activists say there is still time to look for alternative sources of energy. CEB officials do not refute this, but neither are they seeking alternatives. They haven't received instructions from the president, they say.

"We are banking on the Nuraicholai project. The increasing power requirement, and the lack of hydropower makes it essential that we go ahead with the project," says Ananda Dharmapriya, senior assistant secretary at the Ministry of Power. The CEB and the government say there isn't enough time now to find another location. "It takes about eight years to plan a power station, do the feasibility studies, find the money, and then construct it," says Wijeratne. "We originally planned to have the first 300 MW coal plant ready around 1998. We are now six years behind schedule. We have already taken most of the stopgap measures that can be taken, like building more thermal plants."

The indecision even has the Japanese worried, and getting funding for another site will be difficult. Officials of the Japanese lending agency, Overseas Economic Cooperation Fund, which has pledged an interest-free loan for the coal power plant, have expressed concern over the bishop's statement. The controversy does little good to attract loans and investment.

Sri Lanka's economy, once the envy of the Third World, and held up as a model to emulate by poorer countries 50 years ago, is in no shape to face a power shortage. The civil war in the northeast continues to sap the economy of its resources, consuming a quarter of government revenue. Sri Lanka's main money-spinning industries are also suffering. Tea exports are tottering due to low world prices. Garment factories that employ a large percentage of young men and women are shutting down, unable to cope with competition from China and other Asian nations where low wages keep production costs at a minimum. With the United States set to scrap its quota system in 2004, which was the only reason Sri Lanka managed to compete with China all these years, the future is even more grim. Tourism, shattered by Tamil guerrilla bomb blasts in the capital in 1995 and 1996, driving European tour operators away, is only just getting back on its feet.

The energy clock is ticking for Sri Lanka, and the dithering of politicians, more interested in votes than in announcing a clear-cut policy, is doing nothing to help.