Opinion
Observations on Electricity Bill
Prof. Charitha Herath’s letter to Minister of Power and Energy Kanchana Wijesekera
Having reviewed the recently published Sri Lanka Electricity Bill in the gazette, I wish to express my appreciation for the improvements made compared to previous drafts. It’s evident that considerable effort has been invested in refining this version of the bill, making it notably more comprehensive and effective.
Nevertheless, I have identified some fundamental issues in this draft as well. I believe that the forthcoming discussions on this draft will provide an opportunity to address these concerns. Given that the drafting committee appears to have finalized their positions on the matter, I suggest that the proposed changes to the bill should be subjected to scrutiny first in the Supreme Court and subsequently in the Parliament. I anticipate that certain comments and issues regarding the bill will be raised during the legal submission to the courts and in the policymaking exercise within the Parliament.
In the meantime, I wanted to share some of the issues I’ve noticed at the forefront of the bill with you. I believe your consideration, as the incumbent Minister of Power and Energy, is crucial regarding these matters. Thus, I aim to bring these issues into the national discussion surrounding this significant legislative process.
Reforms are Needed
As many would concur, I share the belief that reforms in the Power and Energy sector are paramount. This necessity has been a focal point in policy-level discussions over the past two decades. The current regulations governing the Power Sector, established under the Ceylon Electricity Board Act No. 17 of 1969 and the Electricity Act No. 20 of 2009, have highlighted numerous lapses and legal complexities. These issues have resulted in delays and, in some cases, hindered the development within the sector.
In my view, the reform requirement mentioned above was not adequately addressed by the gazetted bill on 17/4/2024. Instead, it appears to provide excessive leeway for political actors to intervene in the regulatory mechanism of the Power sector. In essence, the proposed bill could exacerbate existing difficulties in certain areas and potentially delegate decision-making power entirely to political entities.
When examining international experiences, Power sector reforms typically unfold in three stages:
1. Unbundling and corporatization, often adopting a single buyer model.
2. Establishment of a wholesale market.
3. Establishment of a retail market.
These stages represent a structured approach to reform aimed at enhancing efficiency and promoting competition within the sector.
The overarching goal of reform experiences is to transform initially highly regulated existing markets, where the regulator decides on allowed Revenue and Returns of Investment (ROI) except Power Purchasing Agreements (PPAs). Consequently, reforms typically advance towards deregulation, wherein prices are determined through competition. This progression aims to foster greater market efficiency and encourage innovation within the sector.
The gazetted Bill, dated 18/04/2024, outlines an initial proposal for unbundling and corporatization, operating within a single buyer model. Under this framework, the National System Operator (NSO) is tasked with purchasing electricity from Generation Companies (Gencos) and subsequently selling it to Distribution Companies (Discos). Additionally, the bill aims to establish a wholesale market model, wherein prices are determined through competition between Gencos and Discos. This approach signifies a pivotal step towards fostering market efficiency and promoting competition within the sector.
Given that approximately 85% of the cost of electricity in Sri Lanka is attributed to generation, it is imperative to prioritize the establishment of competition within the generation sector. Therefore, in alignment with the overarching reform expectations, it is crucial to thoroughly examine the gazetted bill. This careful scrutiny will ensure that the proposed reforms effectively address the need for competition in the generation sector, ultimately contributing to greater efficiency and affordability in the electricity market.
Some Observations
·
In order to effectively implement new reforms in the Power sector, there are two crucial aspects to consider at a conceptual level. Firstly, it is imperative to consult and involve the main stakeholders of the industry in the proposed legal and institutional reforms. It is essential to ensure that their voices are heard and that they are actively engaged in the process, regardless of whether all stakeholders are in agreement with the Bill. Secondly, it is vital to ensure that the proposed reforms adequately address the core issues at hand. Unfortunately, it is my belief that the Government has failed to address both of these highly important issues.
· The proposed bill signifies a notable shift towards increased Politicization of the Electricity Sector. It is clear that key institutions to be established under this bill will be subject to substantial political influence. For example, following the bill’s passage, entities like the Long Term Generation Expansion Plan (LTGEP), National System Operator (NSO), Power Sector Reform Secretariat (PSRS), and certain functions of the Public Utilities Commission of Sri Lanka (PUCSL) will come under direct political control.
· The independence of successor companies and corporate good governance will no longer be maintained, as management control will now rest with the Minister in Charge.
· The Electricity Reform Act no 28 of 2002(that was not implemented due to political reasons)had proposed the establishment of an independent agency known as the “Monitoring and Advisory Committee” to spearhead the reform project. This committee was intended to have the authority to advise the Minister on the appointment and dismissal of directors of the proposed successor companies. However, the recently gazetted new Bill (17/04/2024) does not include this independent mechanism, giving the Minister the power to appoint the Board of Directors of the successor companies. Furthermore, the Minister’s consent is now required for the appointment of the CEO of NSO, as outlined in Section 10 (1)(b) & (c) of the new Bill.
· The “Long Term Power System Development Plan” is formulated by NSO and then forwarded to the Minister for assessment, followed by submission to the Cabinet for approval (as outlined in the recently gazetted Bill, Section 10 (7) (b)).
· Weakening of the Regulator, PUCSL
· The PUCSL no longer holds the power to approve the “Long Term Power System Development Plan” as it has been transferred to the cabinet of Ministers, as per the newly gazetted Bill, Section 10 (7) (b).
· According to Section 3(1)(a) of the Sri Lanka Electricity Act 2009, the PUCSL has the authority to provide advice to the government on matters within their jurisdiction. Nevertheless, the recently gazetted Bill has revoked these powers and transferred them to the National Electricity Advisory Council, which will be appointed by the Minister (new Bill, Section 3 (3)).
· According to Section 20 (2) of the Bill that was gazetted in December 2023, the Regulator is required to simply “inform the Minister” when granting licenses for generation, transmission, and distribution. However, in the recently gazetted Bill, the Regulator now needs to seek the “concurrence of the Minister” before granting licenses.
· The Bill’s Section 4 (10) includes provisions that enable the bypassing of competitive tendering through the provision of incentives to select technologies.
· Illogical Timeline – proposed approach to rescind the current Acts in 6 months without any preconditions, unveiling the Transfer Plan after the specified date, and more.
· As per the new Act, the functions currently executed by CEB will be transferred to the newly formed successor companies within a maximum duration of six months. Section 1 (2) of the Act ensures automatic appointment within this timeframe.
· The process of setting up new successor companies includes drafting detailed Memorandums and Articles of Associations, reallocating assets, liabilities, and human resources, preparing new balance sheets, creating financial models for tariff development, and finalizing the incorporation of other supporting functions. The unrealistic timeline proposed in this new Act is a significant issue.
·It’s not just the impracticality, the legality of forming companies according to a transfer plan which has not been approved and gazetted is also another serious issue.
·Electricity Pricing – guaranteeing fair returns, measures to establish private monopolies, minister directs policy guidelines to encourage specific projects/technologies, no safeguards for regional trade below domestic market prices, permitting current generation licensees to engage with distribution licensees before entering the Wholesale market.
· The increase in electricity prices is tied to the requirement for a justifiable return on investment as outlined in the recently published Bill, Section 29 (5) and (9)(a). This will cause prices to rise, with the Regulator being legally required to ensure that profits are kept at a reasonable level. In times of high inflation or interest rates, electricity prices may see an uptick. The assurance of a reasonable ROI can be accomplished through tariff policies, which are not legally mandated, giving the Regulator the ability to lower profits during tough economic times.
·Granting free access and allowing Captive Generation without comprehensive study as stipulated under Section 12 could lead to the general public being unable to access cost-effective power plants, ultimately causing prices to escalate.
· Section 30(4) permits distribution licensees to engage in power purchase agreements with generation licensees before the Wholesale Electricity Market is established. The competition between distribution licensees for access to inexpensive power plants will drive up prices.
· In the December 2023 gazetted Bill, there was a provision that prohibited the acquisition of combinations of licenses without any qualifications (Section 19 (6)). However, in the new Bill, this prohibition only applies if a company owns more than 50% of the ownership. For instance, if a company owns 49% of the National Network service provider, it can still acquire a Distribution license and shares of multiple other companies as long as its ownership remains below 50%. Additionally, with the introduction of Additional Transmission Licenses, it is possible for a few companies to have control over more than 50% of the National Grid.
· Private companies have been granted Additional Transmission Licences under the new Bill, as stated in Section 14 (2). Nevertheless, Section 10 does not grant the NSO the authority to utilize transmission lines owned by these Additional Transmission Licensees in order to ensure a consistent electricity supply.
· The new Act does not include any provisions to address monopolies, anti-competitive practices, collusion, abuses of dominant position, and merger situations that could impact competition in the Electricity Industry. Rather than enacting specific laws to combat these issues, Section 28 grants the Minister the authority to issue policy guidelines.
· Additionally, as per Section 10(13)(b), it is stipulated that the terms of Electricity trading with foreign nations must receive approval from the Cabinet of Ministers. Given that this trading has a direct impact on the sovereignty of the nation, these terms should be ratified by Parliament, especially for fundamental conditions.
· The exportation of low-cost renewable energy to other countries may result in the deprivation of citizens from accessing affordable electricity. Regional trading lacks protection against prices below the local market costs.
As mentioned earlier, stakeholders and policymakers will have limited avenues for correcting the draft bill once it has been gazetted and tabled in parliament. One option is to seek determinations from the Supreme Court, while the other is to propose amendments during the Committee Stage of the parliamentary debate. However, given the current government’s approach to passing acts in parliament, there are doubts about the feasibility of making amendments through the parliamentary process. The considerable majority power of SLPP MPs is likely to heavily influence and potentially override discussions on the issue within parliament.
I urge the Honourable Minister to carefully consider the observations outlined above and take necessary steps to amend the bill accordingly from the government side. Furthermore, I strongly encourage the Honourable Minister to convey these observations to your advisory council for their expert input and recommendations in rectifying the identified issues. This proactive approach will ensure that the bill is revised comprehensively to address concerns and uphold the principles of fairness and effectiveness in the reform process.
Lastly, I would like to reference an important excerpt from Sally Hunt’s influential book, “Making Competition Work” (2002), which directly relates to the subject under discussion here: “In the US energy industry, it is fairly clear that the major problems with the old structure lay in the generation part of the industry – the efficiency of the investment decision, its regulation, and the tendency for decisions on generation to become politicised” (p. 28).
What I have observed throughout the process of drafting the new Electricity Act is a concerning trend towards politicization of decisions regarding generation. I strongly urge you to take decisive steps to halt this trend and address the issues present in the bill accordingly. It is imperative that we uphold the integrity of the legislative process and prioritize the best interests of the public and the energy sector as a whole.
Charitha Herath (MP)
Opinion
Thoughts for Unduvap Poya
Unduvap Poya, which falls today, has great historical significance for Sri Lanka, as several important events occurred on that day but before looking into these, as the occasion demands, our first thought should be about impermanence. One of the cornerstones of Buddha’s teachings is impermanence and there is no better time to ponder over it than now, as the unfolding events of the unprecedented natural disaster exemplify it. Who would have imagined, even a few days ago, the scenes of total devastation we are witnessing now; vast swathes of the country under floodwaters due to torrential rain, multitudes of earth slips burying alive entire families with their hard-built properties and closing multiple trunk roads bringing the country to a virtual standstill. The best of human kindness is also amply demonstrated as many risk their own lives to help those in distress.
In the struggle of life, we are attached and accumulate many things, wanted and unwanted, including wealth overlooking the fact that all this could disappear in a flash, as happened to an unfortunate few during this calamitous time. Even the survivors, though they are happy that they survived, are left with anxiety, apprehension, and sorrow, all of which is due to attachment. We are attached to things because we fail to realise the importance of impermanence. If we do, we would be less attached and less affected. Realisation of the impermanent nature of everything is the first step towards ultimate detachment.
It was on a day like this that Arahant Bhikkhuni Sanghamitta arrived in Lanka Deepa bringing with her a sapling of the Sri Maha Bodhi tree under which Prince Siddhartha attained Enlightenment. She was sent by her father Emperor Ashoka, at the request of Arahant Mahinda who had arrived earlier and established Buddhism formally under the royal patronage of King Devanampiyatissa. With the very successful establishment of Bhikkhu Sasana, as there was a strong clamour for the establishment of Bhikkhuni Sasana as well, Arahant Mahinda requested his father to send his sister which was agreed to by Emperor Ashoka, though reluctantly as he would be losing two of his children. In fact, both served Lanka Deepa till their death, never returning to the country of their birth. Though Arahant Sanghamitta’s main mission was otherwise, her bringing a sapling of the Bo tree has left an indelible imprint in the annals of our history.
According to chronicles, King Devanampiyatissa planted the Bo sapling in Mahamevnawa Park in Anuradhapura in 288 BCE, which continues to thrive, making it the oldest living human planted tree in the world with a known planting date. It is a treasure that needs to be respected and protected at all costs. However, not so long ago it was nearly destroyed by the idiocy of worshippers who poured milk on the roots. Devotion clouding reality, they overlooked the fact that a tree needs water, not milk!
A monk developed a new practice of Bodhi Puja, which even today attracts droves of devotees and has become a ritual. This would have been the last thing the Buddha wanted! He expressed gratitude by gazing at the tree, which gave him shelter during the most crucial of times, for a week but did not want his followers to go around worshipping similar trees growing all over. Instead of following the path the Buddha laid for us, we seem keen on inventing new rituals to indulge in!
Arahant Sanghamitta achieved her prime objective by establishing the Bhikkhuni Sasana which thrived for nearly 1200 years till it fell into decline with the fall of the Anuradhapura kingdom. Unfortunately, during the Polonnaruwa period that followed the influence of Hinduism over Buddhism increased and some of the Buddhist values like equality of sexes and anti-casteism were lost. Subsequently, even the Bhikkhu Sasana went into decline. Higher ordination for Bhikkhus was re-established in 1753 CE with the visit of Upali Maha Thera from Siam which formed the basis of Siam Maha Nikaya. Upali Maha Thero is also credited with reorganising Kandy Esala Perahera to be the annual Procession of the Temple of Tooth, which was previously centred around the worship of deities, by getting a royal decree: “Henceforth Gods and men are to follow the Buddha”
In 1764 CE, Siyam Nikaya imposed a ‘Govigama and Radala’ exclusivity, disregarding a fundamental tenet of the Buddha, apparently in response to an order from the King! Fortunately, Buddhism was saved from the idiocy of Siyam Nikaya by the formation of Amarapura Nikaya in 1800 CE and Ramanna Nikaya in 1864 CE, higher ordination for both obtained from Burma. None of these Niakya’s showed any interest in the re-establishment of Bhikkhuni Sasana which was left to a band of interested and determined ladies.
My thoughts and admiration, on the day Bhikkhuni Sasana was originally established, go to these pioneers whose determination knew no bounds. They overcame enormous difficulties and obtained higher ordination from South Korea initially. Fortunately, Ven. Inamaluwe Sri Sumangala Thero, Maha Nayaka of Rangiri Dambulla Chapter of Siyam Maha Nikaya started offering higher ordination to Bhikkhunis in 1998 but state recognition became a sore point. When Venerable Welimada Dhammadinna Bhikkhuni was denied official recognition as a Bhikkhuni on her national identity card she filed action, with the support of Ven. Inamaluwe Sri Sumangala Thero. In a landmark majority judgement delivered on 16 June, the Supreme Court ruled that the fundamental rights of Ven. Dhammadinna were breached and also Bhikkhuni Sasana was re-established in Sri Lanka. As this judgement did not receive wide publicity, I wrote a piece titled “Buddhism, Bhikkhus and Bhikkhunis” (The Island, 10 July 2025) and my wish for this Unduvap Poya is what I stated therein:
“The landmark legal battle won by Bhikkhunis is a victory for common sense more than anything else. I hope it will help Bhikkhuni Sasana flourish in Sri Lanka. The number of devotees inviting Bhikkhunis to religious functions is increasing. May Bhikkhunis receive the recognition they richly deserve.” May there be a rapid return to normalcy from the current tragic situation.”
by Dr Upul Wijayawardhana
Opinion
Royal Over Eighties
The gathering was actually of ‘Over Seventies’ but those of my generation present were mostly of the late eighties.
Even of them I shall mention only those whom I know at least by name. But, first, to those few of my years and older with whom speech was possible.
First among them, in more sense than one, was Nihal Seneviratne, at ninety-one probably the oldest present. There is no truth to the story that his state of crisp well-being is attributable to the consumption of gul-bunis in his school days. It is traceable rather to a life well lived. His practice of regular walks around the house and along the lane on which he lives may have contributed to his erect posture. As also to the total absence of a walking stick, a helper, or any other form of assistance as he walked into the Janaki hotel where this gathering took place.
Referencing the published accounts of his several decades-long service in Parliament as head of its administration, it would be moot to recall that his close friend and fellow lawyer, J E D Gooneratne, teased him in the following terms: “You will be a bloody clerk all your life”. He did join service as Second Assistant to the Clerk to the House and moved up, but the Clerk became the Secretary General. Regardless of such matters of nomenclature, it could be said that Nihal Seneviratne ran the show.
Others present included Dr. Ranjith de Silva, Surgeon, who was our cricket Captain and, to the best of my knowledge, has the distinction of never engaging in private practice.
The range of Dr. K L (Lochana) Gunaratne’s interests and his accomplishments within each are indeed remarkable. I would think that somebody who’d received his initial training at the AA School of Architecture in London would continue to have architecture as the foundation of his likes /dislikes. Such would also provide a road map to other pursuits whether immediately related to that field or not. That is evident in the leadership roles he has played in the National Academy of Sciences and the Institute of Town Planners among others. As I recall he has also addressed issues related to the Panadura Vadaya.
My memories of D L Seneviratne at school were associated with tennis. As happens, D L had launched his gift for writing over three decades ago with a history of tennis in Sri Lanka (1991). That is a game with which my acquaintance is limited to sending a couple of serves past his ear (not ‘tossing the ball across’ as he asked me to) while Jothilingam, long much missed, waited for his team mates to come for practices. It is a game at which my father spent much time both at the Railway sports club and at our home-town club. (By some kind of chance, I recovered just a week ago the ‘Fred de Saram Challenge Cup’ which, on his winning the Singles for the third time, Koo de Saram came over to the Kandana Club to hand over to him for keeps. They played an exhibition match which father won). D L would know whether or not, as I have heard, in an exhibition match in Colombo, Koo defeated Frank Sedgman, who was on his triumphant return home to Oz after he had won the Wimbledon tournament in London.
I had no idea that D L has written any books till my son brought home the one on the early history of Royal under Marsh and Boake, (both long-bearded young men in their twenties).
It includes a rich assortment of photographs of great value to those who are interested in the history of the Anglican segment of Christian missionary activity here in the context of its contribution to secondary school education. Among them is one of the school as it appeared on moving to Thurstan road from Mutwal. It has been extracted from the History of Royal, 1931, done by students (among whom a relative, Palitha Weeraman, had played a significant role).
As D L shows, (in contra-distinction to the Catholic schools) the CMS had engaged in a largely secular practice. Royal remained so through our time – when one could walk into the examination room and answer questions framed to test one’s knowledge of Christianity, Buddhism, Hinduism and Islam; a knowledge derived mostly from the lectures delivered by an Old Boy at general assembly on Friday plus readings from the Dhammapada, the Bhagavad Gita, the St. John’s version of the Bible or the Koran recited by a student at senior assembly on Tuesday / Thursday.
D L’s history of Royal College had followed in 2006.
His writing is so rich in detail, so precise in formulation, that I would consider this brief note a simple prompt towards a publisher bringing out new editions at different levels of cost.
It was also a pleasure to meet Senaka Amarasinghe, as yet flaunting his Emperor profile, and among the principal organisers of this event.
The encounter with I S de Silva, distinguished attorney, who was on Galle road close to Janaki lane, where I lived then was indeed welcome. As was that with Upali Mendis, who carried out cataract surgery on my mother oh so long ago when he was head of the Eye Hospital. His older brother, L P, was probably the most gifted student in chemistry in our time.
Most serendipitous perhaps was meeting a son of one of our most popular teachers from the 1950s, – Connor Rajaratnam. His cons were a caution.
by Gamini Seneviratne
Opinion
“Regulatory Impact Assessment – Not a bureaucratic formality but essentially an advocacy tool for smarter governance”: A response
Having meticulously read and re-read the above article published in the opinion page of The Island on the 27 Nov, I hasten to make a critical review on the far-reaching proposal made by the co-authors, namely Professor Theekshana Suraweera, Chairman of the Sri Lanka Standards Institution and Dr. Prabath.C.Abeysiriwardana, Director of Ministry of Science and Technology
The aforesaid article provides a timely and compelling critique of Sri Lanka’s long-standing gaps in evidence-based policymaking and argues persuasively for the institutional adoption of Regulatory Impact Assessment (RIA). In a context where policy missteps have led to severe economic and social consequences, the article functions as an essential wake-up call—highlighting RIA not as a bureaucratic formality but as a foundational tool for smarter governance.
One of the article’s strongest contributions is its clear explanation of how regulatory processes currently function in Sri Lanka: legislation is drafted with narrow legal scrutiny focused mainly on constitutional compliance, with little or no structured assessment of economic, social, cultural, or environmental impacts. The author strengthens this argument with well-chosen examples—the sudden ban on chemical fertilizer imports and the consequences of the 1956 Official Language Act—demonstrating how untested regulation can have far-reaching negative outcomes. These cases effectively illustrate the dangers of ad hoc policymaking and underscore the need for a formal review mechanism.
The article also succeeds in demystifying RIA by outlining its core steps—problem definition, option analysis, impact assessment, stakeholder consultation, and post-implementation review. This breakdown makes it clear that RIA is not merely a Western ideal but a practical, structured, and replicable process that could greatly improve policymaking in Sri Lanka. The references to international best practices (such as the role of OIRA in the United States) lend credibility and global context, showing that RIA is not experimental but an established standard in advanced governance systems.
However, the article could have further strengthened its critique by addressing the political economy of reform: the structural incentives, institutional resistance, and political culture that have historically obstructed such tools in Sri Lanka. While the challenges of data availability, quantification, and political pressure are briefly mentioned, a deeper analysis of why evidence-based policymaking has not taken root—and how to overcome these systemic barriers—would have offered greater practical value.
Another potential enhancement would be the inclusion of local micro-level examples where smaller-scale regulations backfired due to insufficient appraisal. This would help illustrate that the problem is not limited to headline-making policy failures but affects governance at every level.
Despite these minor limitations, the article is highly effective as an advocacy piece. It makes a strong case that RIA could transform Sri Lanka’s regulatory landscape by institutionalizing foresight, transparency, and accountability. Its emphasis on aligning RIA with ongoing national initiatives—particularly the strengthening of the National Quality Infrastructure—demonstrates both pragmatism and strategic vision.
At a time, when Chairmen of statutory bodies appointed by the NPP government play a passive voice, the candid opinion expressed by the CEO of SLSI on the necessity of a Regulatory Impact Assessment is an important and insightful contribution. It highlights a critical missing link in Sri Lanka’s policy environment and provides a clear call to action. If widely circulated and taken seriously by policymakers, academics, and civil society, it could indeed become the eye-opener needed to push Sri Lanka toward more rational, responsible, and future-ready governance.
J. A. A. S. Ranasinghe,
Productivity Specialty and Management Consultant
(rathula49@gmail.com)
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