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Biomass power producer forced to shut due to CEB’s unpaid arrears

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Company saves country USD 3 mn. Annually

by Ifham Nizam

An independent power supplier to Sri Lanka’s national grid whose supplies could annually save the country Rs 450 Million in energy costs and USD 3 million in foreign exchange has shut down because of huge unpaid arrears owed to it by the Ceylon Electricity Board and because of the very large recent increases in the cost of wood fuel.

Mirigama Dendro Power (MDP) is a 4 MW biomass plant which provides 3.8 MW of power to Sri Lanka’s national grid annually.

“CEB has not paid us from December last year and owes us Rs 194 million” said MDP Chairman Dr. Romesh Bandaranaike.

The price of fuelwood used by the Plant has increased by over 75% because of the recent exchange rate changes and the price increases in diesel, which has prompted many industries to change the fuel used by their boilers, which supply process steam, from diesel to wood.

“Raw wood has increased from Rs 4/kg. to more than Rs 7/kg and wood chips from Rs 7/kg to over Rs 11/kg. At these prices, it is not economical to run the plant. It will only be viable if there is a substantial increase in what we are paid for the energy we supply to the CEB,” Bandaranaike said.

“We need a minimum increase of Rs 7-8 per kWh from the present Rs 26.65 we are paid if we are to meet our costs and service our bank loans.”

He adds: “The tariff formula in our agreement with the CEB is “backward looking with five year past averages.” It was never designed to handle situations like the present with massive inflation.

The Rs 34-35 per kWh that Dr. Bandaranaike has requested is still substantially lower than what it costs the CEB to generate the same energy, which is Rs 41 per kWh using coal and over Rs 70 per kWh using diesel according to him. The plant can generate 28,000,000 kWh annually.

The savings to the CEB by purchasing power from the plant at Rs 34/kWh rather than generating the power itself at an average cost of Rs 50 per kWh would be Rs. 448 million per year.

Since the plant uses local fuel rather than imported coal or diesel, the foreign exchange savings would be in excess of USD three million, if the average fuel cost per kWh for the CEB’s plants whose power will be replaced is Rs 40.

“We owe the banks Rs 610 million in project loans and Rs 100 million in overdrafts. The collateral for these loans is the plant assets. We have asked the banks to take over our plant because we cannot operate it any more,” Bandaranaike said.

“The shareholders are resigned to losing their equity investment which was in excess of Rs 500 million. The banks will also lose their loan funds because no one will want to take over and run the Plant even if it is given at Rs 1.”

“It is a shame that a Plant which can generate power cheaper than the CEB’s coal power plants and also save USD three million in foreign exchange each year will have to be sold for scrap.”

He says that given his long experience with dealing with the CEB – he used to be the CEO of Sri Lanka’s largest small hydro power developer – there is little hope in approaching the CEB to request a revision in their present tariff and expedite payments.

Repeated requests to the CEB for payments of even a portion of their arrears have also fallen on deaf ears.

“They have so many other problems with power cuts due to fuel unavailability, consumer tariffs substantially lower than costs which result in massive losses, and so on. We are a tiny part of the solution and the CEB has no time for us.”

He says that MDP will make one last attempt to save their plant by going along with the banks to the Public Utility Commission and see if they can make “sanity prevail.”



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Pakistan naval trio leaves Colombo after goodwill visit

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Wrapping up their goodwill and replenishment visit, the Pakistan Navy ships ‘PNS Taimur’ and ‘PNS Aslat’, along with the submarine ‘PNS/M Hangor’, departed the island on 04 Jun 26. The naval units, which arrived in Sri Lanka on 01 June, were accorded a traditional naval send-off by the Sri Lanka Navy at the Port of Colombo, upon their departure.

During their stay, the Commanding Officers of Pakistan Navy ships and submarine called on the Commander Western Naval Area and the Flag Officer Commanding Naval Fleet at the Western Naval Command Headquarters, where discussions were held on several matters of mutual interest.

Meanwhile, Sri Lanka Navy personnel had the opportunity to visit the visiting Pakistan Navy ships and submarine. Furthermore, the crews of the visiting vessels explored the rich heritage of Sri Lanka, taking time to tour several culturally significant landmarks across the island.

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China, Lanka intensify cooperation to fight cross-border crimes spreading across Asia and beyond

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China and Sri Lanka have intensified joint law enforcement efforts to combat cross-border online gambling and telecom fraud, crimes that authorities warn are increasingly spreading across Asia and beyond.

The Chinese Embassy in Colombo said both countries are working closely to dismantle scam centres and fraud networks that have relocated to Sri Lanka from other parts of Southeast Asia. The Embassy noted that such operations often intertwine with human trafficking and other serious crimes, posing grave risks to public security and social stability.

China’s position on cross-border gambling remains firm: Chinese capital is prohibited from investing in overseas casinos, citizens are barred from operating them, and foreign casinos are forbidden from soliciting Chinese nationals. The Embassy stressed that gambling “almost invariably leads to financial ruin,” with tens of thousands of Chinese citizens suffering losses and harm. Recent amendments to China’s Criminal Law have criminalised cross-border gambling activities.

The Embassy pointed out that Sri Lankan authorities have carried out multiple raids in recent months, dismantling gambling and fraud dens and arresting suspects from several countries. Several Chinese nationals, involved in fraud-related crimes, have been handed over to Chinese authorities, producing what officials described as a strong deterrent effect.

The Chinese Embassy praised the efforts of Sri Lanka’s ministries of Foreign Affairs, Finance, and Public Security, particularly immigration and police officials, for their cooperation.

It warned that without firm and immediate measures, the spread of illegal gambling and fraud could damage Sri Lanka’s international image, undermine social stability, and harm the safety and security of its people.

China has already conducted similar law enforcement cooperation with countries including Spain, the UAE, Myanmar, and Cambodia, leading to arrests and repatriations of overseas fraud suspects. It has also proposed the creation of an international alliance against telecom and online fraud to coordinate global efforts, it said.

Going forward, China pledged to actively implement the Global Security Initiative and Global Civilization Initiative, while continuing to deepen law enforcement and security cooperation with Sri Lanka.

The Embassy said these efforts aim to safeguard lives and property, protect financial security, and build a “clean, safe, and beautiful Sri Lanka,” while contributing to a new global framework for combating transnational crime.

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Asst. Manager, security officer arrested over Rs 30 mn snatch at Horana PB branch

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An assistant manager and a security officer, attached to a state bank branch in Horana, have been arrested in connection with the robbery of more than Rs. 30 million that was being transported to replenish automated teller machines (ATMs), Police said.

The two suspects were taken into custody on Friday after statements were recorded from them regarding the incident, which occurred on Wednesday afternoon at the Horana branch of the People’s Bank.

According to Police, a bank employee was carrying two bags containing cash through the rear entrance of the bank at around 2.45 p.m. when an individual, who had arrived on foot, allegedly snatched the bags and fled the scene.

The stolen money, amounting to approximately Rs. 30.5 million, had been prepared for distribution to ATM machines and transportation to other bank branches. Earlier reports had estimated the loss at around Rs. 35 million.

Investigators subsequently arrested a suspect believed to have been directly involved in the robbery and recovered Rs. 17 million of the stolen cash.

Police have not disclosed the exact circumstances that led to the arrest of the assistant manager and security officer but said investigations uncovered information linking them to the incident.

The Western Province North Crime Division is conducting further investigations to determine whether additional suspects were involved and to recover the remaining stolen money.

The daring daylight robbery has raised concerns over security procedures employed during transportation of large sums of cash to/from banking institutions.Further investigations are continuing.

by Norman Palihawadane

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