News
Biomass power producer forced to shut due to CEB’s unpaid arrears
Company saves country USD 3 mn. Annually
by Ifham Nizam
An independent power supplier to Sri Lanka’s national grid whose supplies could annually save the country Rs 450 Million in energy costs and USD 3 million in foreign exchange has shut down because of huge unpaid arrears owed to it by the Ceylon Electricity Board and because of the very large recent increases in the cost of wood fuel.
Mirigama Dendro Power (MDP) is a 4 MW biomass plant which provides 3.8 MW of power to Sri Lanka’s national grid annually.
“CEB has not paid us from December last year and owes us Rs 194 million” said MDP Chairman Dr. Romesh Bandaranaike.
The price of fuelwood used by the Plant has increased by over 75% because of the recent exchange rate changes and the price increases in diesel, which has prompted many industries to change the fuel used by their boilers, which supply process steam, from diesel to wood.
“Raw wood has increased from Rs 4/kg. to more than Rs 7/kg and wood chips from Rs 7/kg to over Rs 11/kg. At these prices, it is not economical to run the plant. It will only be viable if there is a substantial increase in what we are paid for the energy we supply to the CEB,” Bandaranaike said.
“We need a minimum increase of Rs 7-8 per kWh from the present Rs 26.65 we are paid if we are to meet our costs and service our bank loans.”
He adds: “The tariff formula in our agreement with the CEB is “backward looking with five year past averages.” It was never designed to handle situations like the present with massive inflation.
The Rs 34-35 per kWh that Dr. Bandaranaike has requested is still substantially lower than what it costs the CEB to generate the same energy, which is Rs 41 per kWh using coal and over Rs 70 per kWh using diesel according to him. The plant can generate 28,000,000 kWh annually.
The savings to the CEB by purchasing power from the plant at Rs 34/kWh rather than generating the power itself at an average cost of Rs 50 per kWh would be Rs. 448 million per year.
Since the plant uses local fuel rather than imported coal or diesel, the foreign exchange savings would be in excess of USD three million, if the average fuel cost per kWh for the CEB’s plants whose power will be replaced is Rs 40.
“We owe the banks Rs 610 million in project loans and Rs 100 million in overdrafts. The collateral for these loans is the plant assets. We have asked the banks to take over our plant because we cannot operate it any more,” Bandaranaike said.
“The shareholders are resigned to losing their equity investment which was in excess of Rs 500 million. The banks will also lose their loan funds because no one will want to take over and run the Plant even if it is given at Rs 1.”
“It is a shame that a Plant which can generate power cheaper than the CEB’s coal power plants and also save USD three million in foreign exchange each year will have to be sold for scrap.”
He says that given his long experience with dealing with the CEB – he used to be the CEO of Sri Lanka’s largest small hydro power developer – there is little hope in approaching the CEB to request a revision in their present tariff and expedite payments.
Repeated requests to the CEB for payments of even a portion of their arrears have also fallen on deaf ears.
“They have so many other problems with power cuts due to fuel unavailability, consumer tariffs substantially lower than costs which result in massive losses, and so on. We are a tiny part of the solution and the CEB has no time for us.”
He says that MDP will make one last attempt to save their plant by going along with the banks to the Public Utility Commission and see if they can make “sanity prevail.”
News
US-assisted ‘Ice’ detection: NPC to examine IGP’s move to transfer drug-busting team
Senior DIG among those slated for transfer
By Shamindra Ferdinando
The National Police Commission (NPC) is expected to take up Police Headquarters recommendation to transfer a group of police officers responsible for a major ‘Ice’ bust at the Colombo port recently.
NPC sources told The Island that recommendation in respect of transfers was received last week. Sources said that though the NPC was scheduled to meet today (01), whether IGP Priyantha Weerasooriya’s recommendation would be discussed and decided today was not known.
Members of the NPC are retired High Court Judge Lalith Ekanayake (Chairman), K. Karunaharan, Dilshan Kapila Jayasuriya, A.A.M. Illiyas and Jayantha Jayasinghe
The IGP directed the Special Investigation Unit (SIU) to probe those who carried out the 31 August, 2026 raid that resulted in the detection of 463 kgs of ‘Ice’ concealed in a container that arrived from Pakistan.
The US Embassy declined to comment on the probe though it declared that the largest ever narcotics detection was made on intelligence made available by the US Drug Enforcement Administration (DEA).
The officers investigated for what an authoritative Headquarters source called shortcomings and lapses on the part of the raiding party, belonged to the Central Crime Investigation Bureau (CCIB). Senior DIG Ranmal Kodituwakku who, on behalf of the CCIB, received information directly from the DEA, is among those Police Headquarters wanted to transfer.
CCIB carried out the raid after having obtained a search order from the Aluthgama Magistrate court. Among the suspects taken in this connection are three Pakistani nationals.
News
2027 Budget to be held from 12 Nov. to 14 Dec.
* First Reading of the Budget on 7 October
The Committee on Parliamentary Business has decided that the Second Reading of the Appropriation Bill for the year 2027 (Budget Speech/presentation of Budget proposals) will take place on 12 November, followed by the Second Reading debate from 13 November to 14 December.
Secretary General of Parliament Kushani Rohanadeera said this had been decided at a meeting of the Committee on Parliamentary Business held recently under the chairmanship of Speaker Dr. Jagath Wickramaratne.
Accordingly, the Appropriation Bill was scheduled to be presented to Parliament for its First Reading on 7 October, the Secretary General said.
It was also decided that the Second Reading of the Appropriation Bill (Budget Speech) would be delivered by President Anura Kumara Dissanayake, in his capacity as the Minister in charge of Finance, on Thursday, 12 November, 2026.
Thereafter, the Second Reading debate will be held for seven days, from 13 November to 20 November. Accordingly, the vote on the Second Reading will be held at 6.00 pm on 20 November.
Thereafter, the Committee Stage debate will be held for 19 days, from 21 November to 14 December , with the vote on the Third Reading of the Budget scheduled for 6.00 pm on 14 December.
During this period, the Budget debate will be held every day, including Saturdays, except on public holidays and Sundays. Parliament is scheduled to meet at 9.30 am on each of these days.
From 9.30 am to 10.00 am each day, time will be allocated for the Parliamentary business specified under Standing Order 22(1) to (6). Thereafter, five Questions for Oral Answers will be taken up from 10.00 am to 10.30 am, followed by one question under Standing Order 27(2) from 10.30 am to 11.00 am.
Accordingly, the debate is scheduled to be held from 11.00 am to 6.00 pm on all days, except the two days on which votes are scheduled to be taken, Motions at the Adjournment Time will be taken up for debate from 6.00 pm to 6.30 pm, based on a 50:50 time allocation between the Government and the Opposition, the Secretary General stated.
It was also approved that during the Second Reading debate, 60% of the debate time will be allocated to the Government and 40% to the Opposition, while during the Committee Stage debate, 40% will be allocated to the Government and 60% to the Opposition.
Furthermore, if a division is called for on an Expenditure Head, relating to a Ministry, the relevant vote will be held at 6.00 pm at the conclusion of the proceedings on the respective day.
News
CB Governor confident over timely disbursement of next IMF tranche; hands post-2027 programme decisions to govt.
By Sanath Nanayakkare
Central Bank Governor Dr. Nandalal Weerasinghe addressed queries on the nation’s IMF bailout programme yesterday and indicated that Sri Lanka expects to reach a Staff-Level Agreement with the Fund shortly, clearing the path for the next tranche of funding under the $3 billion EFF arrangement before the end of the year.
Answering questions on Sri Lanka’s economic path, after the current programme expires in March 2027, Dr. Weerasinghe clarified that seeking a follow-up IMF arrangement was entirely a policy decision for the government rather than the Central Bank, maintaining the institutional boundary between Central Bank operations and political decision-making.
The Governor remained firm in his projection that the national economy would expand by around 4 percent throughout 2026, demonstrating economic resilience, even amid external volatilities, such as high oil prices.
Dr. Weerasinghe expressed confidence in the domestic economy’s underlying momentum. While international financial institutions and multilateral agencies had pegged Sri Lanka’s growth prospects at more conservative levels, typically around 3.0 to 3.5 percent, he emphasised that CBSL’s projections are grounded in continuous analysis of real-time indicators.
“When you compare with several other agencies, their growth projections hover around 3 to 3.5 percent. However, the economy is already growing at around 4 percent. In our projections, the economy will maintain this growth rate of around 4 percent throughout the year,” Governor Weerasinghe said.
He noted that despite mid-year quarter adjustments due to volatile oil prices, real economic indicators, including steady credit expansion across the commercial banking sector and sustained industrial and service activity, indicate that the growth trajectory remains firmly on track above the 4 percent benchmark.
Reiterating the Central Bank’s primary mandate, Dr. Weerasinghe noted that monetary policy actions remained focused on anchoring inflation and curtailing excess demand to prevent runaway price spikes.
On inflation targeting, the Governor mentioned that CBSL had submitted a technical recommendation to the Ministry of Finance to maintain an inflation target of 5 percent (+ or – 2 percent band) over the next three-year horizon.
Responding to inquiries on differing target forecasts announced by external agencies such as the IMF, Dr. Weerasinghe underscored that the Central Bank’s recommendations stem strictly from domestic technical and empirical evaluations.
“Our recommendation is based on pure technical and empirical analysis considering the country’s specific situation. We have recommended maintaining a 5 percent target for the next three years, and the government has accepted this recommendation,” he added.
Regarding foreign exchange management, the Governor noted that the Central Bank continues its active market intervention strategy aimed at smoothing out undue exchange rate volatility rather than resisting natural market trends.
Dr. Weerasinghe concluded that while the short-to-medium-term outlook remained assured, the combination of a steady 4 percent growth target and proactive fiscal measures would firmly anchor macroeconomic stability through 2026 and beyond.
-
Features6 days agoBeyond traditional jobs: Why Sri Lanka needs to facilitate the gig economy
-
Editorial5 days agoBirth of a bad law
-
News3 days agoPolice remove Thileepan statue in Jaffna
-
Latest News6 days agoKusal, Wellalage star as Sri Lanka defend 322 in Headingley thriller
-
News5 days agoTIN mandatory for key transactions from Nov. 1
-
Features3 days agoThe 22nd Amendment, constitutional recovery and illiberal slippage
-
Features3 days agoOf foreigners as CEOs of Lankan ventures
-
News3 days agoSajith rejects Jt. Opp. protest sabotage claim; SJB TU chief demands remedial action
