29.08.2012 CMEC
“Puttalam no longer symbolizes the development and prosperity of Sri Lanka, and its image should be removed from the 100-rupee currency note.” A councilor of a major opposition party of Sri Lanka commented recently.
Criticism was aimed at the largest economic cooperation project between China and Sri Lanka. Undertaken by CMEC, Puttalam has broken down for several times since it was put into operation last March, and frequently stopped power transmission due to technical failures in recent two months.
All of a sudden, the quality of China-undertaken projects has become the target of public criticism.
Western Media Take the Opportunity to Attack Chinese Companies
Puttalam coal-fired power plant sits 130km north of Colombo. The construction was started in July, 2007. The Phase I project, which started power generation last March, has an installed capacity of 300,000kW, accounting for 17% of the national total. President Mahinda Rajapaksa attended the inauguration ceremony of the Phase I project. The Phase II project has an installed capacity of 2 × 300,000kW and is expected to be completed by 2014. With the completion of the above two projects, Puttalam will become the largest power plant in Sri Lanka with a total installed capacity of 90,000kW, accounting for more than 1/3 of the country’s total.
Relying heavily on oil-fired power generation, Sri Lanka has been suffering from high generation cost and the shortage of domestic power supply. Since its putting into operation, Puttalam has greatly eased the country’s power shortage. In February this year, the image of the plant was printed on the newly-issued 100-rupee currency note of Sri Lanka to show the plant’s important status. But now the accident has happened, some officials irresponsibly blame the Chinese side for it, making much noise about removing the plant’s image off the note.
Western media including Reuters and BBC quoted comments of Sri Lankan officials to accuse the quality of Chinese power plants. Reuters said on August 13 that, in January this year, the state-owned power monopolist Ceylon Electricity Board (CEB) reported frequent breakdowns of projects undertaken by China. CEB Chairman Wimaladharma told local media that Puttalam coal-fired power plant undertaken by a Chinese company had “quality problem”. Sri Lankan Minister of Power and Energy Champika Ranawaka complained about the location problem of Puttalam and that Sri Lanka did not obtain the corresponding technology. What’s more, CEB Vice Chairman Anura Wijepala alleged that the Chinese company used substandard equipment which caused sea water corrosion on some facilities of the plant.
On August 14, Colombopage, an online newspaper in Colombo, reported that the power generation of Puttalam was interrupted by two breakdowns in late July and early August. Meanwhile, the hydropower generation in Sri Lanka has shrunk greatly due to the prolonged drought this year. The workload of hydropower units dropped to less than 15% from the normal 40%. Against such background, the Sri Lankan government announced two nationwide power outages because the power supply could not meet daily demands. Wimaladharma said that CEB had fixed the problem and planned to resume supply on the night of August 12, but another technical failure occurred and forced the plant to close down for another two to three weeks.
Suspected Man-made Sabotage to the Coal-Fired Power Plant
“We cannot exclude the possibility of malicious destruction. They have found some clues in the plant,” said Mr. Zhao Wenxue, deputy chief engineer of Northwest Electric Power Design Institute and chief engineer of the Puttalam project. Zhao has been following up the project since 2004 and rushed to the plant from China in early August shortly after the accident occurred.
Sri Lankan government spokesman Rambukwella said in a routine press conference: “Evidence shows that some are involved in causing the Puttalam accident. The investigation has begun and I believe we will soon find out who’s really responsible for it.”
But Zhao also told the reporter that even without man-induced factor, Puttalam still had huge risks.
Puttalam started power generation last March and four months later it entered into a two-year warranty period. During the period, the plant was run by Sri Lanka as strongly required by the proprietor CEB.
Puttalam is the first coal-fired power plant in Sri Lanka, where technicians in this field are in a shortage. Therefore, we provided necessary training to local staff, but we were turned down when we asked to evaluate the qualifications of the trainees for plant operation.
“The fact is, such a giant and unknown power plant in Sri Lanka is controlled by a group of people who are possibly incompetent,” said Zhao.
What’s worse, “local staff did not strictly observe the regulations and procedures.” According to Zhao, power plant staff in China works eight hours a day, but they are forced to work 12 hours, sometimes 24 or even 48 hours a day in Sri Lanka, which makes it impossible for them to keep a clear mind, and thus puts the plant in great danger.
What’s more, poor patrol and inspection worsen the situation. The accident in early August was triggered by the fact that the spare diesel generator was not set in “auto” as required in the regulation.
“We have asked the CEB to seek external support for smooth operation of the plant for several times, which has been repeatedly turned down. The accident once more exposed the poor operation level of CEB.” Zhao said that China would make another try to negotiate with CEB, in order to involve the Chinese side or a qualified third party in operation support.
In Zhao’s point of view, the Chinese company has nothing to do with the location problem of the plant. “The decision to build the plant on the northwestern coastline of Sri Lanka was made by the government of Sri Lanka and a Swiss consultant firm in the 1980s, and the Chinese company was not involved.” Moreover, after undertaking the project, the Chinese company has adopted countermeasures to fight the corrosion problem in the local environment.
Active Response from the Chinese Side
“This is ridiculous. It is like a terrible driver crashed into a tree and blamed the car maker for it and questioned the quality of the car which was fine.” Zhao said China has mature experience in the field of thermal power and our equipment, technology and construction team are all among the best in China.
“We feel indignant at the gratuitous accusation from Sri Lanka and we will actively make responses and stop playing a scapegoat.” Immediately after the accident occurred, CMEC Vice President Li Chaoyang led an expert team and relevant equipment and flew to Sri Lanka.
After the accident, leaders of the Chinese embassy in Sri Lanka and CMEC talked to Sri Lanka Minister of Power and Energy and CEB Chairman and hoped that they would not make any irresponsible statements concerning the Puttalam accident.
In response, Sri Lanka’s attitude changed. Ranawaka told the media that the temporary plant breakdown was caused by technical failure and it was not a quality problem. According to him, this is Sri Lanka’s first coal-fired power plant and considering its special geographic environment, the occurrence of minor technical problems is understandable. Ranawaka believed that such technical problems would be overcome in time with the joint efforts of the two parties
In fact, it is stipulated that a new unit should be examined within one year of operation to ensure smooth running and normal equipment life. But Zhao said that the drought this year caused severe shortage of hydropower generation in Sri Lanka, and our repeated requests for overhaul were refused by the CEB and the units in the plant were still in overloaded operation.
After the 8•8 Accident, the Sri Lankan side forced the units to restart even though the technical problem was not fixed completely, which caused another breakdown and forced the plant to be shut down for another two to three weeks.
Both Li and Zhao said that after the accident, Sri Lanka was anxious to put the plant into operation again to fight the drought-caused power shortage. The Chinese side would do its best to cooperate with the CEB, eliminate defects and restart the plant as soon as possible with technical safety ensured. The restart was expected to be launched between 28 and 30, August.
“If the Sri Lankan side fails to draw lessons from it, more problems will be inevitable, which will have negative impacts on the economy and people’s life of Sri Lanka.” Chinese experts expressed their deep concern.
Media Observation: How to Avoid the Fate of Scapegoat in Overseas Markets
International Herald Leader, reporter: Che Hongliang from Colombo
The accident in early August caused nationwide power outages in Sri Lanka, which gave some local and western media the opportunity to make a scene of it. The Sri Lankan side, to protect their own interests, however, refused to take their due responsibilities and blamed the Chinese company for the accident.
There are more reasons behind such response of the Sri Lankan side. In September, the local election will be held in three provinces of Sri Lanka, which the government and opposition parties attach great importance to. As the competition gets fierce, opposition parties won’t miss any chance to attack the government while the government, in response, will look for a scapegoat for distraction.
Meanwhile, western media is crazy about stories on the interests of China in Sri Lanka. For example, China National Aero-Technology Import & Export Corporation bought lands to build a hotel in the core area of Colombo, the capital city of Sri Lanka, and China Harbour Engineering Company Ltd. is building a sea port in Hambantota in south Sri Lanka.
This incident also reveals a problem frequently encountered by Chinese companies in their overseas projects, that is, poor public relations. Many large overseas engineering projects undertaken by Chinese companies, particularly state-owned enterprises, are vital to the national economy and people’s livelihood of the country where they are located. Therefore, local people and media will pay close attention to such projects, and build up their impression about China based on these projects, which will in this way affect the bilateral relationship.
For major overseas engineering projects, Chinese companies should have personnel dedicated to external communication for clarification and dissipating the doubts of local people. Inthis case, all the statements concerning the China-undertaken project were made by Sri Lankan authorities, which, to protect its own interests, might not be telling the exact truth or even hurt the interests of the Chinese company. Unfortunately, without an effective information release channel, Chinese companies fail to effectively respond to media accusation.