NTPC's Trincomalee project at Sri Lanka back on track-I: JVA to be signed this month

In a major breakthrough, the state-run NTPC and Ceylon Electricity Board (CEB) have finally concurred on the execution of the requisite project agreements, including the joint venture agreement (JVA), power purchase agreement (PPA) and implementation agreement (IA), for the 2x250 MW coal-based Trincomalee power project in Sri Lanka. These draft agreements were, reportedly, finalized by the partners over the last visit of the NTPC-officials to the neighboring country, end of last month. Subsequently, the draft documents have been put up for the approval of the concerned authorities in the two countries. If everything goes right, NTPC and CEB are expected to ink the much-awaited JVA by the end of this month, followed by the signing of other agreements. This comes in the wake of a joint declaration by India and Sri Lanka, pertaining to various issues of bilateral interest, made during the visit of the Lankan President, Mahinda Rajapaksa, in June 2010.

Notably, most of the outstanding issues pertaining to these agreements, which have been hampering the project for quite some time, had been resolved when the officials of the CEB and the Sri Lankan Government visited India in October 2009. However, there were still some stumbling blocks, which both the developers, especially NTPC, had to make all out efforts to weed out during subsequent rounds of meetings. These issues had to do with the continuing rights of NTPC subsequent to an exit from the joint venture, and the laws governing the JVA. Moreover, the IA could not be finalized, primarily, because the Sri Lankan officials were reluctant to make commitments with respect to infrastructural inputs for the project and other support services, points on which which they had agreed in the Memorandum of Agreement signed, earlier, among NTPC, the Sri Lankan Government and CEB. However, with the intervention of the two governments at the diplomatic level, these pending issues seem to have been settled during the last round of negotiations, held over June 21-27, 2010.