Frequent Power Blackouts Could Darken Sri Lanka’s Chances for Foreign Investment

RAJAGIRIYA, SRI LANKA — The sounds of printing machines working at full speed create a loud, almost unbearable din inside the printing plant of K S U Graphic Pvt. Ltd., in Rajagiriya, a suburb of Sri Lanka’s commercial capital, Colombo. The workers move with purpose and efficiency, going from one task to another, barely raising their eyes from the machines.

It’s a regular day at this privately owned printing plant. But for this hive of activity to function, electricity is essential, says Kamal Peiris, the owner of K S U Graphic Pvt. Ltd.

From September 2015 to March 2016, Sri Lanka has experienced three unannounced, multihour, islandwide power blackouts during which the entire country was thrown into darkness, the first time it has happened nationwide at close intervals since 1996.

The most recent incident was a more than six-hour blackout on March 13, though some areas of the country were in the dark for much longer.

Peiris says his staff of 17 employees was at work on a large printing order that day, and the blackout ruined the material that was in the machines. Since the papers and ink could not be taken out until power was restored after more than six hours, the workers had no choice but to wait.

“We were helpless during the power failure in March,” Peiris says.

Peiris, 50, says he and other small-scale entrepreneurs are the worst hit by these blackouts, because they cannot afford large generators to provide alternate power.

“The amperage of a normal generator is not sufficient for our machines,” he says. “We will have to invest at least 10 million rupees [$68,400] for big generators. That’s a big challenge for a businessman like me.”

Power supply has been reliable in Sri Lanka in recent years, but the string of blackouts has many residents concerned about the ability of the national power grid to provide the electricity the country needs.

Sri Lanka reached 98 percent electrification by the end of September 2014, according to a report from Sri Lanka’s energy ministry.

The main source of electricity in Sri Lanka is hydropower, which provides about 40 percent of the country’s electricity needs, says Anura Wijayapala, chairman of the Ceylon Electricity Board, the country’s largest electricity company, operating under the Ministry of Power and Renewable Energy.

Thermal, wind, solar and biomass are some of the other sources of electricity in the country, Wijayapala says.

The islandwide blackout that lasted more than six hours in March was caused by an explosion in a key transformer in the power network, Wijayapala says.

“According to technical knowledge, 90 percent of the crisis was due to internal errors,” he says. “I had never seen such an explosion in my life. Due to the power of the explosion, some parts had been thrown about 40, 50 meters away.”

President Maithripala Sirisena deployed the military to protect the country’s main power stations from possible sabotage after the blackout.

Tilak Siyambalapitiya, an energy consultant, says failings in the electricity network are caused by human error and lack of maintenance.

“We can say that the failures are 100 percent technical faults,” he says.

As an energy consultant who provides services to the private sector, he often works with investors who are considering setting up industrial factories and manufacturing plants in Sri Lanka.

At present, Sri Lanka doesn’t have sufficient resources for power generation because the national power grid hasn’t been upgraded regularly, he says.

These failures have left the power grid weak and vulnerable, Siyambalapitiya says.

“The blackouts are very bad for the country,” he says.

Sri Lanka has been focusing on developing its industry and services sectors and becoming a hub in South Asia for many sectors. All these efforts could be jeopardized by the weakness in power supply, he says.

“The few foreign investors that come to Sri Lanka are actually discouraged due to power cuts,” Siyambalapitiya says. “They are not ready to experience losses in a foreign country.”

Many companies have to budget for private generators as part of their operational costs, he says. But even when this cost is borne by the investor, the lack of reliable power supply can still affect the economy.

“When there is no electricity at home although the factory has power, the employees’ mentality is affected,” Siyambalapitiya says. “They report to work in a depressed mood. It may affect productivity and efficiency.”

Entrepreneurs and small businesses in Sri Lanka are already feeling the crunch of the recent trend of blackouts.

Beach Wadiya is a seafood restaurant on a Colombo beach. It has been in operation since 1974 and has hosted members of international royal families and other celebrities. The restaurant has been featured in international publications and travel guides.

But regular and repeated power blackouts are affecting business, says Olwyn Weerasekara, the owner of Beach Wadiya. His main fear is that the blackouts will lead to poor service for his customers.

“How can we provide them with an efficient service when such sudden blackouts occur?” he asks. “The recurrent interruptions were a headache to us. Refrigerators are essential to store drinks, ice cream, desserts and alcohol, etc.”

The restaurant has four deep freezers and three electric ovens, Weerasekara says.

“Therefore, electricity is essential to us,” he says.

The restaurant has used small generators during times when there were scheduled power cuts, he says. But the unscheduled blackouts have caught them unawares, he says.

“Foreign clients call us before they visit us,” Weerasekara says. “After the blackout in March was in the media, a lot of our clients called us and inquired about it. No businessman wants to make losses.”

Wijayapala says the Sri Lankan government is considering turning to its neighbor India for electricity.

“Countries like Thailand, Myanmar and Vietnam have connected their networks with neighboring countries,” he says. “Likewise, we too may decide to come to such an agreement with India in the future.”

A feasibility study is currently under way, Wijayapala says, and the government will soon be able to evaluate the pros and cons of such a partnership.

Peiris says he remembers the unannounced blackouts in 1995 and 1996, because it was around the time he was setting up his printing business.

“I was alarmed by experiencing the blackouts again,” he says.

While expressing real fear for the future of his business if the power supply becomes unstable, Peiris says he understands that blackouts and other infrastructure failures are part and parcel of living in a developing country.

“We are still not a developed country,” he says with resignation. “We must expect such situations.”

 

Ajith Perakum Jayasinghe, GPJ, translated this article from Sinhala.