Power generation, CEB and IPPs
By Murli Dhar
The question that arises: why has this decision taken so long coming?
This case has been surrounded by a maze of controversy since 2007. First, it was alleged that the Malaysian promoters of this coal-based power generation project (CT Power) were not publicly solicited and therefore the project ought not be considered. Second, views were expressed about its potential to cause pollution in the Pointe aux Caves region, where it was intended to set up initially. The project was then moved to Albion, but it met with the same objection of the pollution risk it represented to the area.
In the course of time, the EIA committee which considers the environmental impact of projects, turned it down as it presumably did not satisfy its criteria. The promoters thereupon referred the matter to the Environment Appeal Tribunal for a decision. This case has been dragging on in the absence of valid counter-arguments by the EIA committee to those put up by the project’s promoters. This week the Tribunal, (chaired by P.M.T Kam Sing, assisted by H. Gunesh and B. Sewraj as Members) gave out its decision in favour of the project in view of the “lack of any proper evidence” to support the objection that had been raised at an earlier stage by the Ministry of the Environment. It follows that the Tribunal should have been convinced about the non-polluting character of the project. It has been convinced more fully by the arguments of Senior Counsel Désiré Basset as also by Counsels Nandraj Patten and Hitesh Dhanjee duly supported by Attorney Pazhany.
The question arises as to why this decision has taken so long coming. There is a potential shortage of installed power-generating capacity in the country with a projected deficit of 100 MW in the near term, unless new capacity is installed. If there was a danger of environmental pollution due to the use of coal in power generation, that should have applied equally to the half dozen IPPs (CTBV in the North, FUEL in the East, CEL Beau Champs, CTBS South, CT Savannah in the South) who have been given authorisation to produce electrical power from a mix of renewable inputs (e.g., bagasse) and coal but most of which finally ended up producing up to 60 % of the country’s electrical power almost exclusively on coal, especially during the intercrop season when there is no renewable input for power generation.
One needs to be informed whether the latter have put in place better performing technologies to keep under check the coal pollution they cause whereas CT Power hasn’t, even though the CT promoter just vindicated by the Tribunal is coming on the market much later than the first generation of local power producers and should presumably be better equipped with finer technologies of coal pollution control. If the EIA Committee was rejecting CT Power, it ought to have applied the same standards to all. One is at a loss to explain this ambivalence in decision-making.
The CEB’s dependency on electricity produced by the IPPs has increased over the years and become pronounced enough for the IPPs to go unchallenged, at least not so by the CEB. The CEB has been hands and feet tied up to them by cast-iron long duration power purchase agreements On the other hand, the producers can, by combining among themselves in one way or another, render the CEB powerless to challenge their cost structures. This means they can go on escalating the price at which they deliver electricity to the CEB as rise in their input costs are passed on to consumers by contract entered into with the CEB. The CEB has no recourse to make them go for the cheapest coal supplier in a bid to get them to lower electricity delivery prices. Were CT Power to operate independently outside the IPPs’ own coal input arrangement, it might drive down the per unit price the IPPs may be charging the CEB for on-charging to consumers. They would therefore have a good enough reason to do all they can to defeat the CT Power project before it materialised both so as not to concede market space to a competing unit and to present an unchallenged unified cost structure to the CEB over the next decade or more.
We are not saying that it would serve their interest to put up the public to protest against potential pollution by the CT Power project. But this cannot be ruled out since economic interests are frequently defended by diverting the debate to social issues. The policy of “divide and rule” is fairly well known by now and needs no elaboration. One can always use it to lobby against non-member “intruders”.
We do not carry any brief from CT Power whom we don’t know. We consider rather that it would be fair to share business in a transparent and accountable manner among a larger number of stakeholders than what the current legacy of wealth-owning has permitted in this country. The latter has foreclosed avenues for others’ development and sharing gains from the country’s economic adventure by using very many devious strategies.
One can break the gridlock that has come into place by driving better sense among those who have kept seizing one bastion of economic growth after the other: they need to share benefits and refrain from having recourse to the rentier mentality each time there is an opening up of economic space. They hardly realize perhaps that had new inroads into economic development not been made, they would not have widened their own economic horizons by as much as it is today. By not standing in the way each time a new entrepreneur appeared on the scene, they could have helped the country occupy a much bigger global economic standing than what obtains today.
The decision given in the CT Power case represents an appeal to change a mindset that has occasionally dwarfed the economic ambitions the country could have contemplated had it benefited from unhindered progress free of perverse lobbying. However, the breakthrough should go in more directions than one. For this, we will need another class of public servants who will take their decisions fearlessly but with fairness to one and all. It requires a bit of courage to move from a lower station to a higher one and there are men and women enough in this country who can achieve the kind of overhaul of the full system we are in need of.
* Published in print edition on 27 July 2012