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JAAF denounces PUCSL-approved 66% electricity tariff hike

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The Public Utilities Commission (PUCSL) granted approval to a 66% electricity tariff hike effective 15th February 2023, resulting in exponential increases in costs in the apparel industry, which in turn threatens the continuity of operations, competitiveness and sustainability of a USD 5.5 billion industry, which remains the backbone of Sri Lanka’s economy. The current increase is a further 31% with overall increase of 165% since June 2022. This translates to an increase in manufacturing costs of close to 5% just on electricity.

The Joint Apparel Association Forum (JAAF) is perplexed and surprised that the written and oral submissions presented by the industry on tariff hikes to the PUCSL public consultation have simply been overlooked. It discerns that the approved tariff hike was effected devoid of stakeholder consensus and done simply as a tick-box exercise to concede to legal processes.

The following are the industry-relevant cautions and proposals submitted by the Secretary General of JAAF Yohan Lawrence at the PUCSL public consultation:

Overestimation of demand by CEB – As highlighted by JAAF numerous times, Q4 of 2022 experienced a 15-20% decline in orders (reduction in demand) due to the continuing global recession. JAAF estimated this downturn of economic activity to continue into the 2H of 2023. With this abrupt fall in demand, the industry faced shorter working hours and decreased demand for electricity. PUCSL’s documentation too acknowledged that electricity generation in January 2022 was much higher than in January 2023. However, the then-proposed tariff increase was based on an increased electricity demand as estimated by the Ceylon Electricity Board (CEB), which was not quantified taking the January 2023 pattern into account.

JAAF raised caution stating that the overestimation of electricity demand will result in higher projected costs and requested the CEB and PUCSL to hold off on electricity tariff revisions until an accurate assessment of electricity demand was made. JAAF further requested the CEB to lower its own generation costs before tariff adjustments.

JAAF iterated that with the country’s single biggest industrial exporter facing a reduction in demand, an electricity tariff increase based on an unsubstantiated increased electricity demand makes limited sense.

The impact of increased tariffs on competition – It is vital that Sri Lanka apparel remains competitive with other apparel manufacturing nations and in the international market. With last year’s electricity tariff increases, Sri Lanka stood on par in US dollar terms with regional giants like India, Bangladesh, Vietnam, Indonesia and Thailand offering USD 9 to10 cents per kWh. Meanwhile, African countries including Benin and Togo which are aggressively pushing for foreign investments offer a much lower rate of USD 8 cents per kWh.

With the increases that have gone through, this will leave Sri Lanka with a tariff of around 12cts per kWh, which will undoubtedly make Sri Lanka uncompetitive and unattractive to investors.Impact of repetitive off-peak tariff increases on Sri Lanka apparel – As highlighted by JAAF during the previous tariff hike, off-peak tariff increases defeat the very purpose of having an off-peak tariff slab, which is to incentivize businesses to operate during off-peak hours.

The off-peak tariff was increased from LIKR 6.58 / kWh to LKR 15 in 2022. The new PUCSL document suggested an off-peak increase of LKR 34 / kWh from LKR 15. This denotes a 400% increase in less than 12 months. (JAAF)

JAAF highlighted that Sri Lanka needs to grow a dedicated textile sector, especially with the government investing heavily in the Eravur textile zone. Fabric mills must operate 24 hours a day to attract investors. Therefore a 400% increase in off-peak tariffs is counter-productive to the objective of growing a textile base in Sri Lanka. JAAF further stressed that this increase will discourage companies moving to off-peak operations creating an unnecessary incentive to sustain peak production and thereby increased electricity generation, which is in stark contrast to any basic economic rationale.

Renewable energy and rooftop solar- JAAF urged the CEB to urgently scale up the commissioning of renewable energy including rooftop solar, aligned with the government’s commitments to generate 70% of the country’s energy requirements from renewables.

JAAF emphasized that Sri Lanka needs a commercially viable tariff for Net Plus. The apparel industry has installations of about 200 MW of solar power. However, these companies have not been paid for the last 7 to 8 months. In the event CEB is unable to honour delayed and future payments, JAAF urged the existing companies to be permitted to move to Net Metering. JAAF illustrated that this will immediately eliminate a cash flow burden from the CEB, allowing the increase of the solar footprint, which will in turn reduce demand on the burdened national grid allowing the CEB to generate electricity at a lower cost.

Power wheeling – JAAF has been lobbying for power wheeling for an extended period of time. This is the single biggest catalyst in the move to renewable energy and will undoubtedly be a conduit for investment in the sector. Increased private investment in renewables will reduce the load on the CEB allowing the SOE to reduce its pricing given to the consumer.

JAAF urged the amendment of the CEB Act to be expedited to allow for power wheeling. Taking these facts into consideration, JAAF would like to express deep concern on the government’s decision to increase the industry electricity tariff rates by 30%. JAAF urges the government to consider facts and data when making policy decisions of this scale and nature. At a juncture where the apparel industry is confronting a decrease in demand, electricity tariff increases based on speculative increased demand is blatantly inessential and will only burden an already embattled industry that binds the country’s economy in these unprecedented times.



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A sustained wave of Indian assistance to Sri Lanka showcases defining shift in developmental diplomacy

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Transport Minister Bimal Rathnayake and Indian High Commissioner Santosh Jha at the plaque unveiling ceremony for the Moragahakanda Bridge project, supported by Indian grant assistance.

By Sanath Nanayakkare

An evolving approach to regional diplomacy was brought into sharp focus with the recent foundation-laying ceremony for the Moragahakanda Bridge in Matale.

Jointly launched by Indian High Commissioner Santosh Jha and Minister of Transport, Highways and Urban Development Bimal Rathnayake, this 175-metre span is far more than a routine civil engineering project. It serves as the physical manifestation of a broader USD 450 million reconstruction package deployed by India in the wake of Cyclone Ditwah, which severely fractured the island’s transport arteries.

Foreign aid is too often discussed in cold, macroeconomic abstractions. Yet, every so often, a consistent pattern of targeted assistance alters the landscape of bilateral relations, offering a clear window into how regional partnerships evolve out of necessity and goodwill.

Across the country today, a remarkable narrative of multi-layered cooperation is unfolding.

From critical post-disaster infrastructure and maritime routes to grassroots agricultural uplift and institutional capacity-building, India’s developmental footprint is shifting unmistakably toward an organic, people-centric model of shared resilience.

What distinguishes this latest wave of assistance is its deliberate pivot from emergency support to permanent, climate-resilient transformation. When Cyclone Ditwah initially paralysed regional connectivity, India’s immediate response was marked by the rapid deployment of temporary Bailey bridges.

Today, that swift humanitarian intervention has matured into a structural blueprint: the Moragahakanda project stands as the vanguard of 13 permanent bridges being built across Sri Lanka’s provinces by IRCON International Limited, complemented by upcoming railway upgrades and modern signaling systems backed by a USD 250 million Line of Credit.

The true signature of this diplomatic shift lies in its breadth, operating simultaneously across multiple tiers of society:

Institutional Governance: Delegations of Sri Lankan parliamentarians and senior administrative officers regularly travel to India to study public policy frameworks, legislative systems, and administrative practices.

Economic Lifelines: Financial mechanisms, such as viability gap funding for the Nagapattinam-to-Kankesanthurai passenger ferry service, continue to shrink geographical distances, reviving coastal commerce and tourism.

Grassroots Empowerment: Specialised capacity-building programmes tailored for local stakeholders – ranging from state officials to rural dairy farmers -ensure that development reaches deep into the island’s hinterlands.

By aligning immediate disaster relief with long-term infrastructure, institutional capacity, and human capital, India and Sri Lanka are demonstrating how neighbours can build safer, more connected futures together, grounded firmly in mutual respect and tangible progress.

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Bring your own bag to book fair, CEA urges

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By Ifham Nizam

The Central Environmental Authority (CEA) yesterday urged visitors to the Colombo International Book Fair to bring reusable bags to carry their purchases, as part of a drive to reduce single-use plastic waste at the event.

CEA Director General R. S. P. Kapila Rajapaksha said large quantities of plastic, particularly “sili sili” bags, had been used to carry books at previous book fairs.

“We urge visitors to bring an environmentally friendly, reusable bag when they come to buy books. This simple step can help reduce the use of single-use plastic and protect the environment,” Rajapaksha said.

The book fair opens on September 25, with the CEA and the Sri Lanka Book Publishers’ Association launching an awareness programme targeting book sellers, food vendors and visitors.

The programme will be conducted under the theme “Read Smart, Carry Smart”, focusing on reducing polythene and plastic use throughout the exhibition.

The CEA said the use of plastic bags is also subject to regulations issued under the Consumer Affairs Authority Act. Gazette Extraordinary No. 2456/41, dated October 1, 2025, prohibits the free distribution of handled “sili sili” bags to consumers. Where such bags are sold, the charge must be included in the customer’s bill.

The CEA said food outlets at the book fair would also be required to comply with regulations prohibiting a range of single-use plastic products.

These include plastic straws and stirrers, disposable plastic plates, cups, spoons, forks and knives, as well as polythene-based food wrappers commonly known as lunch sheets.

The CEA said it had discussed the requirements with relevant stakeholders and reached agreement to ensure that prohibited products are not used at food outlets within the exhibition premises.

The authority urged both traders and visitors to cooperate with the initiative and help make this year’s book fair a more environmentally responsible event.

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Japanese investor Yoshimichi Watanabe backs Hunas Holdings

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Yoshimichi Watanabe / Tanaka - Director Hunas Holdings PLC

Partnership signals renewed foreign investor confidence in Sri Lanka as a destination and in the long-term growth of its hospitality sector

Japanese investor Yoshimichi Watanabe has entered into a partnership with Colombo Stock Exchange-listed Hunas Holdings PLC, in a move that comes as the diversified conglomerate prepares a significant expansion of its hospitality and real estate interests in Sri Lanka.

The partnership brings foreign capital and international market experience into one of Sri Lanka’s fastest-diversifying listed groups at a point when the Group is actively building out its pipeline across both sectors. Hunas Holdings is currently evaluating a series of hospitality and real estate developments in Sri Lanka, with further announcements expected in the coming months.

Hunas Holdings PLC operates across hospitality and leisure, real estate, renewable energy and agriculture, with a hotel portfolio that includes Hunas Falls in Elkaduwa

For Sri Lanka, the significance of the partnership extends beyond the two parties. Inbound investment of this nature, from an investor with direct and sustained experience of the market, is a measure of returning confidence in the country as a destination and in the underlying fundamentals of its hospitality sector, at a time when the industry is repositioning towards higher-value, experience-led travel.

Watanabe brings investment experience across e-commerce, hospitality and real estate in Japan and in international markets including Bali, Indonesia. He has also maintained a relationship with Sri Lanka over many years, having made multiple investments in the country, giving him first-hand insight into its business environment, regulatory landscape and long-term potential.

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