By P.K.Balachandran
Colombo, December 13: Days before Sri Lankan President Anura Kumara Dissanayake’s visit to India, a group of professionals and university dons have asked him to cancel Gautam Adani’s wind power projects in the country in fulfilment of his election promise to “safeguard Sri Lanka’s energy sovereignty”.
Dissanayake will be on a visit to India from December 15 to 17, his first as President.
The visit is crucial for both Sri Lanka and India as Adani’s ambitious project proposals have run into public opposition in the island nation. Those who oppose the projects, especially the Mannar wind power project, expect the President to take up the issue with Indian leaders.
But the million-dollar question is: Would Dissanayake be able to face the might of India and the clout of Adani?
In a strongly-worded Open Letter released to the media on Wednesday, the professionals said that Adani’s wind power project in Mannar island in North West Sri Lanka should be cancelled on environmental, financial and national sovereignty grounds.
As per the Open Letter, in March 2022 the then Lankan cabinet had decided to award a tender of the value of US$ 2,600 million to Adani Green Energy without competitive bidding. The power purchase rate was fixed at US cents 8.26 per kWh for 20 years. This controversial decision was kept concealed for two years.
The then Lankan government had agreed to buy power at US cents 8.26 per kWh, whereas the purchase price for a kWh unit offered by local companies generated from much smaller wind power projects was half that price.
Significantly, even Adani Green Energy’s Application for “Approval of an Investment” dated 18.01.2022 submitted to the Board of Investment, had quoted the price as US cents 6.50 per kWh, which was much lower than what the Cabinet of Ministers had approved.
The letter points out that Saudi Arabia has signed an agreement with a Japanese consortium to purchase wind power at a cost of US cents 1.56558 per kWh unit, while a second agreement was reached at the price of US cents 1.70187 per kWh.
“A comparison of these global prices with the price offered by the Adani Green Energy to Sri Lanka, US cents 8.26, leaves no room for doubt of the disingenuous nature of the project and possible corruption involved,” the letter said.
Lopsided Agreement
The letter said that the agreement was one sided. Documents submitted by different Sri Lankan government agencies in the court cases filed against the contract, clearly pointed to a “shockingly one-sided economic benefit to Adani Green Energy from the proposed project and at a severe disadvantage to Sri Lanka”.
As per the 2022 cabinet decision, all imports, including the wind turbines and all other material required for building the wind farm will be exempt from applicable taxes such as import duty, VAT etc. The Lankan government will be required to develop the transmission evacuation infrastructure at its own cost, or pay Adani Green Energy the cost of such development.
The earnings of Adani Green Energy from the wind farm will be fully exempt from Income Tax. The government will be required to provide the ‘Adani Green Energy’ security for the above payments under the Power Purchase Agreement (PPA), with an International Letter of Credit duly backed by a Sovereign Guarantee of the Government of Sri Lanka.
Adani Green Energy will be free to repatriate such tax-free earnings generated in Sri Lanka back to India without any exchange control constrains or any tax deductions.
“In essence, the Government of Sri Lanka will not generate any income for itself from Adani Green Energy’s commercial activity in Sri Lanka,” the letter said.
Environmental Concerns
The chosen location for the project, the Mannar Island, is another critical issue.
The citizens’ letter says that the wind farm will be located in an environmentally and ecologically “highly sensitive area of global significance.”
The Environment Impact Assessment (EIA) report had identified three other locations – ‘Kalpitiya Peninsula’, ‘Ambewela Cattle Farm’ and the South East Coast as being more suitable locations for building and operation of a windfarm, over and above the Mannar Island.
However, most shockingly, the EIA itself arbitrarily made a completely different final decision, recommending Mannar Island, without any factual evidence, the citizens’ letter said.
“Thus, the irresistible inference is that Mannar Island has been selected notwithstanding the grave and irreparable damage it will cause to Sri Lanka, singularly due to its proximity to India, as opposed to the other more suitable locations,” the letter alleged.
Migratory Bird Corridor
The project site is positioned within one of the most important migratory bird corridors of a major global flyway, recognized by the United Nations Convention of Migratory Species (CMS) (to which Sri Lanka is a signatory), known as the ‘Central Asian Flyway (CAF)’. The Mannar island is one of the main entry and exit points for Sri Lanka to the ‘Central Asian Flyway’, through which over 15 million migratory birds of 250 species fly annually.
Mannar Island and other islands on the Gulf of Mannar have been identified by both local and international scientists and experts as a Key Biodiversity Area, as well as a globally Critical Site for water birds. It is also the most important seabird breeding site in Sri Lanka, many of which are listed as globally critically endangered in the National Red List of Threatened Species of the Government of Sri Lanka and the International Union for Conservation of Nature and Natural Resources (IUCN).
The region harbours more than 200,000 water birds during the migration season that spans from September to April, and 72,000 birds fly in a single day, which includes the rarest species of birds recorded in Sri Lanka as well globally.
Giant Turbines
The proposed Mannar Wind Power Project (Phase-II) will comprise a staggering 52 wind turbines (140 meters in height with the diameter of the rotor blades extending to 160 meters), placed in parallel with the existing Thambapawani wind farm (Phase I), which comprise of 30 wind turbines.There is a further proposed extension, which will be established in Pooneryn (Phase III).
“If all three phases are implemented, the Mannar Island will be completely covered with 103 wind turbines, spreading right across the entire width of the Mannar Island, which will irreversibly change the topography of the island and irreparably destroy the Avians and other biodiversity thereof,” the citizens’ letter said.
Energy Sovereignty
According to the Environment Impact Assessmemt report, the Adani Green Energy will also build a 5 GW wind power plant in the north Sri Lanka to generate electricity and export to India.
In addition, there is a further intention to establish a “floating solar and wind facilities in the territorial waters of Sri Lanka, bordering northern province”.
The citizens’ letter said that the “Adani Group aims to create a monopoly in the Mannar North Wind Production in their favour, and their bid, planned capital investment and pricing are developed to support such intent. The Public Utility Commission of Sri Lanka (PUCSL) has strongly opposed the deal,” the letter pointed out.
Seabed Exploration
The letter drew attention to the Adani Group’s proposal for “sea bed exploration in Sri Lankan waters” in the Mannar sea basin for valuable minerals in Sri Lanka’s Ocean bed.
In addition to the above, there is also a proposal to build a bridge connecting India to the Mannar Islands across the ‘Adams Bridge’ in addition an ‘Energy Highway’ between the two countries.
“Thus, it cannot be overstated that the implementation of the above proposed projects, will place the North and North-Western territory of Sri Lanka and the adjacent territorial seas belonging to Sri Lanka, under the control of India, which will severely compromise not only the Energy Sovereignty of Sri Lanka, but most alarmingly the territorial integrity of the country,“ the citizens’ letter warned.
Public Opposition
Large numbers of citizens of Sri Lanka, including organizations and most importantly the rural communities living in the area, and the fishing communities have “protested, pleaded and railed against the proposed wind power project during the former Government’s regime but to no avail,” the letter said.
“The indecent haste with which the former Government has pursued the proposed Project is fully reflected by the quick acquisition of private lands in the area for the proposed Project, even before the EIA was published, and in complete disregard of the objections of the people affected by the process,” it added.
A number of individuals and organizations filed public interest litigations challenging the proposed project in the Supreme Court. The said cases are presently pending before the Court.
An Election Pledge
The letter to the President said that he should implement his election promise to cancel the project. “Excellency, your citizens have elected you and given you the mandate to implement your manifesto. So, we respectfully ask you to honour that promise and not to proceed with the ‘Adani’ wind power project in Mannar.”
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