Business

‘PUCSL electricity tariff revision is discriminatory’

Published

2 years ago

2023/11/2

Electricity tariff design must meet two main objectives: firstly, raising the money needed to pay for the costs of provision, and secondly, sending the right economic signals to each customer to favour the optimal socio-economic use of electricity.

To achieve the above objectives the principles that must be followed when designing tariffs are;

Economic sustainability or revenue sufficiency,

Equity or non-discrimination among users,

Economic efficiency in resource allocation, and

Transparency, simplicity, and stability of the methodology.

A well-defined and appropriate tariff structure must balance the financial sustainability of the sector on the one hand and the well-being of various segments of society on the other. The CEB’s tariff revisions seem to be mainly focused on the aspect of revenue sufficiency, ignoring the other aspects. As electricity is a commodity, there should be no difference in the prices charged to different users, except when reflecting any differences in the cost of providing services to different classes of users.

A differential tariff implies that some categories are subsidised leading to the question of who pays these subsidies. The current structure is such that households consuming an excess of 60 Kwh, and general purpose bulk supply users subsidise the industrial, hotel and charitable sectors.

Households that consume over 90 Kwh and general purpose bulk customers are charged a tariff that is double that of industries and hotels. With regards to hotels, in effect, domestic consumers subsidise foreign tourists. However, the differential tariff between general bulk supply and industrial/hotel users is meaningless. For example, a hall that hosts weddings and celebrations would be treated as a general bulk customer and be charged double the tariff that a hotel would be charged, even though both host similar events. A restaurant in a shopping mall would be charged as a general customer, but the same restaurant located within a hotel would enjoy a tariff half of that which a hotel incurs. While this differential existed under the previous tariff, it is made worse under the new structure; hotels faced a 10% increase in tariff while general users faced a 20% increase.

If the idea behind a lower tariff for hotels is to make the sector more competitive, then the solution is to address the causes of uncompetitiveness directly. One area is construction costs which raises the level of investment and the cost of maintenance. Protectionism for the domestic construction materials industry raises the costs of steel bars and rods, sanitary ware, aluminium extrusions, granite, electrical fittings, and carpets resulting in high overall construction cost. The effective protection granted on these items can exceed 200%; the savings in finance cost from a lower capital outlay would probably exceed the savings from a lower electricity tariff.

Economic value creation can take place in many different ways in an economy and the service sector is no less important than other sectors. The cross subsidisation between customers violates the equity or non-discrimination principle of a good tariff and discourages use by the overcharged and promotes overconsumption by the subsidised.

For example, the higher domestic tariff may serve as a disincentive for remote work. Remote or flexible work arrangements can reduce transport costs, congestion, energy use and for some, enable a better work/life balance. The government should be facilitating flexible work but the higher rates applicable to some domestic consumers may be a disincentive.

Economic activity is increasingly complex and a value chain can involve many different sectors. For example, the tea industry involves agriculture, processing in factories, transport, warehousing, blending, financing, marketing and exports. Moreover, products are now more knowledge intensive, so a greater part of the value addition arises in non-production-oriented components of the value chain. With differential tariffs, parts of the same value chain may pay different prices for use of the same commodity.

Further, a lower tariff to “industry” penalises new economy enterprises while promoting highly energy intensive users. This distorts resource allocation by encouraging excessive energy consumption, artificially promoting capital-intensive industries where the country may not have a clear comparative advantage. A subsidised tariff also blunts the incentive to economise.

The cost of supplying electricity fluctuates throughout the day, depending on the power generation mix, cost of fuels used, transmission costs and energy losses but as electricity storage is not economically viable, it has to be consumed whenever it is produced. Households with rooftop solar thus enjoy a subsidy. Domestic solar generation takes place in day time where the cost of generation is low but the import of electricity to the house takes place at night when the cost of generation is high. Offsetting units generated against units imported results in a subsidy because of the difference in costs between the two. Time of use metres should be mandated for all domestic users on net metering with the import/export being accounted for on the respective time of use tariff. Indeed all users who consume above 60 Kwh should move to the time of use tariff.

Should the government decide to subsidise the capital or operating costs to serve certain customer classes, it should do so directly from the budget and while a lifeline tariff for the poor is justified the high domestic users pay a tariff 7.4x that of the lowest. Not all households are the same size and an extended family living in a single house may face a much higher tariff although their income level may not differ greatly from the average.

The PUCSL should review tariffs to prevent the distortions highlighted above. Instead of cross-subsidies, the regulator should be working to reduce overall cost of the provision of electricity through better procurement and greater efficiency.

Treating all costs as a pass-through in computing the tariff is a mistake. The PUCSL needs to set efficiency targets in order to set fair and reasonable tariffs. The CEB should be incentivised to control its costs by specifying and enforcing performance requirements. Benchmarking CEB performance against regional and international peers to assess relative efficiency is necessary, as is consulting stakeholders on achievable efficiency targets.

Advocata is an independent policy think tank based in Colombo, Sri Lanka. We conduct research, provide commentary and hold events to promote sound policy ideas compatible with a free society in Sri Lanka. Visit advocata.org for more information.

Advocata spokespersons are available for live and pre-recorded broadcast interviews via 0774858401

CONTACT:

Subashini Kaneshwaren,

Senior Communications Executive, Advocata Institute

Email: subashini@advocata.org

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Business

Ceylinco Life celebrates its ‘Unstoppable Champions’ at Annual Awards 2026

Published

11 hours ago

2026/04/19

Thilina Walpola

Ceylinco Life’s top award winners with Directors and senior management at the Company’s Annual Awards

The power of momentum was the focus when Ceylinco Life, Sri Lanka’s life insurance market leader for an unbroken 22 years, celebrated the exceptional achievements of its top-performing sales force at its Annual Awards Ceremony 2026, held at Cinnamon Life Colombo.

Bringing together more than 300 of the company’s highest achievers, the event recognised Sales Officers who attained High Flyers status, qualified for the prestigious Million Dollar Round Table (MDRT), or earned ‘Sales Superstar’ status in 2025, each having met rigorous performance benchmarks. In total, close to 370 awards were presented at the ceremony, which was attended by over 450 participants including the company’s Board of Directors and senior management.

Themed ‘Unstoppable Champions,’ the awards ceremony underscored the spirit of resilience, ambition and consistent excellence that defines Ceylinco Life’s sales force, positioning the awardees as drivers of the company’s sustained market leadership.

The event was graced by Chief Guest Srinivasa Rao, Managing Director – Life and Health (South Asia and South East Asia) at Munich Re, and featured an evening of scintillating entertainment with performances by Sanka Dineth, Shashika Nisansala, the Naadro Band and Prashanthini, complemented by dance acts from Muddrika Dance Studio.

Among the highlights of the evening was the presentation of two Toyota Axio motor cars to R. P. Edirisinghe and S. S. H. M. T. Laksiri in recognition of their consistent excellence in qualifying as High Flyers and MDRT members. The top honours at the awards ceremony were presented to Mr A. S. L. Fernando as Best Agency Head, H. D. Pathirana as Best Agency Supervisor, A. I. P. Manjula as Best Life Insurance Advisor, and J. Meera as Best Regional Sales Manager.

Business

Kia drives into Colombo’s skyline with landmark showroom at Altair

Published

11 hours ago

2026/04/19

Thilina Walpola

Kia Motors (Lanka) Ltd. Chairman Mahen Thambiah and Managing Director Andrew Perera at the opening of the new showroom.

Top Korean nameplate Kia has reinforced its presence in Sri Lanka with the opening of a striking new showroom at the iconic Altair high-rise in Colombo, marking a significant step in the brand’s continued expansion and customer engagement in the country.

The new facility, unveiled exclusively to media on 7th April 2026, occupies approximately 2,700 square feet of prime space at Retail 3 of the Altair development.

Strategically positioned at the entrance to the complex for maximum visibility and accessibility, the showroom places Kia at the heart of one of Colombo’s most prominent luxury residential and lifestyle destinations.

Designed in line with Kia’s global brand guidelines, the showroom presents a modern, customer-centric environment that reflects the company’s focus on innovation, quality and service excellence. The space is intended to offer an immersive retail experience, enabling customers to explore the brand’s evolving portfolio in a setting that mirrors international standards.

“The opening of this new showroom signals Kia’s renewed commitment to Colombo, strengthening its proximity to customers while enhancing convenience and accessibility for those seeking to engage with the brand,” Kia Motors Lanka Chairman Mahen Thambiah said. “It represents a key milestone in our strategy to deepen customer relationships and expand the Kia footprint across key urban locations.”

Taking centre stage at the new showroom is the all-new Kia Tasman, the brand’s first-ever double cab pickup, which makes its debut in Sri Lanka in tandem with the opening. The introduction of the Tasman underscores Kia’s drive to diversify its offering and respond to the evolving demands of customers across multiple segments.

In addition to the Tasman, visitors to the Altair showroom can experience Kia’s full range of vehicles, further enhancing the brand’s appeal to a broad spectrum of automotive enthusiasts.

Business

Nalin Sri Tikiri Bandara: forging discipline and character through martial arts

Published

11 hours ago

2026/04/19

Thilina Walpola

After nearly three decades on the mat, Sri Lankan martial arts instructor H. M. Nalin Sri Tikiri Bandara has built a career that stretches from local dojos in Kandy to international training arenas in the United Arab Emirates, shaping a growing generation of students through what he describes as “a lifelong journey of discipline and self-development.”

With more than 28 years of experience, Bandara has emerged as a prominent figure in martial arts education for children, youth and adults, particularly across Sri Lanka and the UAE, where he is currently based in Abu Dhabi.

Bandara’s martial arts journey began at a young age and has since spanned multiple disciplines, including Kyokushin Karate, Ashihara Karate, Mumonkai Karate, Brazilian Jiu-Jitsu and yoga.

He holds several international dan rankings, including 3rd Dan in Kyokushin Karate (Japan), 4th Dan in Ashihara Karate (Australia), 2nd Dan in Mumonkai Karate (Japan), and 1st Dan under Josui Kai Kan Karate (Japan). Years of training camps, seminars and competitions abroad, he says, have helped refine both technical skill and teaching philosophy.

Bandara is the founder and chief instructor of Nalin Dojo, which operates across multiple locations, including a main branch in Abu Dhabi and an established centre in Kandy. He also runs expansion programmes in schools and fitness centres in the UAE.

Collectively, his programmes have trained more than 2,000 students, ranging from children as young as four to adults.

He also serves as branch chief and representative of the World Karate Alliance Kyokushin Bugakukai, and contributes to the development of full-contact karate at national level in Sri Lanka.

At the core of his teaching is a hybrid approach he calls “Yoga Martial Arts”, blending karate discipline, yoga-based mental conditioning, Brazilian Jiu-Jitsu principles and sports science.

The focus, he says, extends beyond physical combat to character formation, emphasising discipline, respect, confidence-building and mental resilience.

“Martial arts is not just about fighting, it is about building better human beings,” Bandara said.

Much of his work is directed at children and adolescents, particularly in an era he describes as increasingly dominated by digital distractions.

He argues that structured martial arts training can reduce screen dependency, improve concentration, and strengthen emotional stability, while promoting healthier lifestyles.

“Children’s future is the future of the community,” he said, underscoring his belief that early discipline shapes long-term social outcomes.

Beyond regular training, Bandara organises grading examinations, workshops, school programmes and community fitness initiatives in both Sri Lanka and the UAE.

He has continued such activities even during periods of global disruption, maintaining regular engagement with students and instructors.

Looking ahead, Bandara plans to expand his dojo network across the UAE and internationally, while developing structured youth development programmes and training future instructors.

His long-term ambition is to build a sustainable martial arts ecosystem that integrates physical excellence with character education.

In a career defined by discipline and continuity, Bandara represents a generation of martial arts instructors blending traditional combat systems with modern wellness principles — and, in the process, attempting to shape not just fighters, but future citizens.

by SK Samaranayake