Colombo High Court Rules in Favor of Bhoruka Power Lanka for Gurugoda Hydro Project

The Colombo Commercial High Court ordered the Central Environmental Authority (CEA) to desist interfering with the commissioning procedures of the Gurugoda Oya Mini Hydro Power Project.

Ms Rohini Walgama of the High Court bench delivered an enjoining order opposing the CEA as a consequence of the litigation filed by the Bhoruka Power Lanka, the plaintiff. The Ceylon Electricity Board (CEB), along with the Central Environmental Authority (CEA), its Director, Ms Kanthi De Silva, and Ms. Ramani Ellapola, its Director General was named as the Defendants by the Plaintiff.

Gunawardena & Ranasinghe sent Farman Cassim and Upul Jayasooriya to act for the Plantiff. According to the Plantiff, it had given a preliminary feasibility study to CEB for a mini hydro power plant in the Kegalle District’s Gurugoda Oya and was later issued a letter of intent on 27th November, 2002 by the CEB. Further to gain environmental approval from the CEA, the petitioner had also acquired a no objection letter from the Galigamuwa Pradeshiya Sabha, water rights from Galigamuwa’s Divisional Secretary and also minor irrigation clearance.

After being completely satisfied with regard to the Technical Committee’s assessment and the Environmental survey, the CEA issued on the 5th November,2003 an Environmental Clearance Certificate to the Plaintiff. Following this, the company submitted the certificate to the CEB and gained a license dated 14th July 2004 for the sale of the energy generated from this project to the CEB. It signed a Power Purchase Agreement with the CEB having a total amount of Rs 238 million invested in this project. The project was then commissioned in April 2007 and as per the agreement the power was transmitted to the national grid.

With the project’s smooth operation and automatic loan repayments taking place the CEA via a letter on 1st December 2006 unexpectedly cancelled power generation operations. The plaintiff’s complaint was that the CEA with the intentions of a malicious nature wanting to sabotage the project, had changed stances moving from its original position. It also states that the CEA on 8th January 2010 had sent a letter refusing a request for re-commissioning the project thereby causing severe loss to both the Plaintiff’s credibility and business reputation. With this suit the Plantiff is trying to obtain a permanent order from the court preventing the CEA from interfering with the commissioning of the hydro project for providing power to the CEB as per the power purchase agreement.