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Contradictions in Trinco oil tank deal

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By Neville Ladduwahetty

According to media reports the government of Sri Lanka (GOSL) has signed three new Agreements, dated 6 January, 2022 relating to the Trinco oil Tank Farms. The first with the Ceylon Petroleum Corporation (CPC), the second with the Lanka IOC PLC (LIOC), and the third with a Joint Venture Company incorporating the CPC holding 51% and LIOC holding 49% called Trinco Petroleum Terminal (Pvt.) Ltd. The three Agreements relate to the ninety-nine (99) Oil Tanks built during WWII on the basis of State leases, for a period of fifty (50) years. The first relates to twenty-four (24) tanks, the second to fourteen (14) tanks and the third to sixty-one (61) tanks.

As stated by the Minister of Energy Udaya Gammanpila, this current agreement is an outcome of the three previous agreements. In the course of an interview, he stated that the first was when “President J. R. Jayewardene agreed with India to develop and operate this tank farm jointly with India, so we have a bilateral obligation with India to develop jointly”. The second was when “Prime Minister Ranil Wickramasinghe, on 7 February 2003, leased out these tanks to India for 35 years. That is how they came into possession of these tanks. The third was when “Malik Samarawickrama – Sushma Swaraj MoU agreed with India to lease out the entire tank farm of 99 tanks to LIOC for a period of 99 years” (The Sunday Morning, January 16, 2022).

Minister Gammanpila has also said, “Sri Lanka was under obligation to India in respect of this tank farm through these three agreements. I had to negotiate with India in this backdrop. If I could ignore these agreements, I would have taken the entire tank farm into Sri Lanka’s possession; I would love to do that. Unfortunately, there are three agreements signed by previous governments and I am bound by them” (Ibid).

To claim that Sri Lanka is obligated by all three previous agreements is not only to assign equal status to all but also to accept the contradictions in the terms among the three agreements. For instance, the first agreement between Sri Lanka’s Head of State and the Prime Minister of India has no time bar while the second is by a Prime Minister of Sri Lanka to lease the tanks to India for a specified period of 35 years and the third, an agreement to lease all the tanks for 99 years, not to India but to a State entity of the government of India, LIOC. Furthermore, the first agreement was to develop the tanks jointly while the other two are on the basis of leasing them. Perhaps, India did not make an issue of violating the terms of the Indo-Sri Lanka Accord because the subsequent agreements are more favourable to it.

The specifics of the latter two agreement are not available to the public. Even if their contents are available to the Minister and he was aware of the circumstances that caused a lease for 35 years with the State of India to be extended for 99 years to an entity of that State as being of equal standing as the Indo-Sri Lanka Accord, this is not a tenable proposition. Furthermore, the Indo-Sri Lanka Accord is not limited to the oil tanks, whereas the other two agreements specifically relate only to the tanks. Therefore, as far as the tanks are concerned, there is every justification to address issues relating to them from a totally fresh perspective.

Minister Gammanpila claims this deal was a major achievement. The reason for such a claim is that until the agreements of January 6 2022 were signed, all 99 tanks had been leased either for 35 years or 99 years depending on which agreement one considers to be valid. Therefore, the agreement of January 6 2022 is a considered a gain because it regained 85 tanks that were in the possession of LIOC. Furthermore, the fact that 24 of the 85 would be exclusively operated by Sri Lanka and 61 jointly means a decided improvement. However, it must be clearly understood that the so called “gain” is only in respect of the tanks taken in isolation and not as part of a viable asset.

Could Sri Lanka have done even better and taken over all 99 tanks to be developed by Sri Lanka, while leaving the 14 tanks currently operated by LIOC for the remainder of the 35-year lease period as a measure of good faith? Since the provision of the Indo-Sri Lanka was for operating the entire Tank Farm jointly, and the agreements of 2003 and 2017 violated this provision, a claim could be made that sufficient grounds existed to take possession of all 99 tanks; a wish the Minister himself entertained during his interview.

REVISITING the AGREEMENT and its TERMS

How best to exploit the potential of these tanks has been the topic of much discussion and debate. However, the majority of these discussions have focused on these tanks as a legacy of World War II and how best to exploit its potential. It cannot be denied that taken in isolation, these tanks are nothing but 99 rusting steel tanks without much utilitarian value.

It is only in the context of its location that these tanks take on a whole new dimension and come alive as a vital economic asset because of its proximity to one of the best natural harbours in the world – the Trinco Harbour. Therefore, it is the Trinco Harbour that make these tanks a valuable asset.

These tanks were sited at this particular location because of the Trinco Harbour. Therefore, the tanks cannot be considered in isolation and independent of the Trinco Harbour. The tanks and harbour are inextricably linked and therefore it is absolutely vital that the tanks and the harbor are considered and treated as a single asset and not as separate assets. On such a basis, for the LIOC to hold 49% stake in the joint venture should be unacceptable because it amounts to the harbor being a give-away – a free gift to which a value cannot be assigned. Furthermore, the fact that the tanks amount to nothing but 99 steel containers without the harbour, strong grounds exist for Sri Lanka to revisit the deal and take possession of the tanks because the asset that transforms the tanks into an economically viable asset is the Trico Harbor, which is not associated with the deal.

Having taken possession of the tanks, Sri Lanka should perhaps restore a few tanks per year by seeking funds through local banks and pay back the loans by renting them to interested parties such as the LIOC and others who may find it profitable to store petroleum products when prices are low. Such an approach would be in keeping with the current government’s policy of self-reliance. Furthermore, the pace of restoration could be undertaken to keep in pace with the demand from interested parties.

CONCLUSION

The current agreement signed on 06 January 2022, which entitles Sri Lanka to operate 24 tanks exclusively and 61 tanks as a joint venture with India is decidedly an achievement over the agreements of 2003 and 2017, which leased these tanks for 35 and 99 years, respectively. However, the implication of these agreements is that both India and Sri Lanka have agreed that deviating from the basis of developing the tanks jointly as stated in the Indo-Sri Lanka Accord is acceptable.

All these agreements relate to the 99 tanks that by themselves amount to nothing but steel storage containers without much utility value. However, they have the potential to be transformed into a vital economic asset because of their proximity to one of the best natural harbours in the world – the Trinco Harbour. Therefore, any agreement relating to the tanks should take into account the fact that without the Trinco Harbour the tanks by themselves have little value. Consequently, the tanks and the Trinco harbour should be treated as a single asset and not as separate and unrelated assets. Under the circumstances, a share distribution of 51/49 favours India disproportionately because the asset that makes the enterprise a viable venture, namely the Trinco Harbour, belongs to Sri Lanka. It is this aspect that makes the 06 January2022 agreement unacceptable because the asset value of the Trinco Harbour has been totally disregarded.

Coupling such a context with the policy to deviate from the concept of jointly developing the tanks into one of leasing in the agreements of 2003 and 2017 gives Sri Lanka the opportunity to renegotiate and take possession of all 99 tanks, but permits LIOC to continue operating the 14 tanks until the current lease period lapses. Having renegotiated a fresh deal, Sri Lanka should restore a few tanks at a time with finances from local Banks, and pay back the loans by renting them to interested customers to store petroleum products.

Such a strategy would be in keeping with the spirit of self-reliance that has been with the Peoples of Sri Lanka and manifests itself occasionally, the most recent being the demand for Sri Lanka to construct the East Container Terminal that the Government intended to outsource. The spirit of self-reliance is not dead. Its resurgence awaits leadership. It is in such a spirit that the Trinco Tank Farm deal should be revisited.



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Where the hell have all devils gone?

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‘Hello darkness, my old friend, I’ve come to talk with you again’

–– The Sound of Silence

A drive through the city of Colombo is far less frazzling around midnight, when most asphalt cowboys (read private bus drivers) are in dreamland, and others move like a breeze, having to mind only an occasional wheeled contraption trying to break the sound barrier or policemen in high-vis jackets with flashing traffic wands.

Driving back home after work, some time ago, at an ungodly hour, as usual, yours truly beheld something that opened the floodgates of nostalgia. A devil was staring at him through the rear windshield of a vehicle. An electrifying sight—indeed!

It was actually a sticker of a colourful, apotropaic devil mask—fascinatingly fanged, adorably goggle-eyed, and so endearingly familiar to southerners who grew up among devils, so to speak.

A little over a year ago, a devil beckoned to the writer similarly on the Southern Expressway while he was on his way to Matara with his family for the traditional New Year, which invariably makes him succumb to the irresistible pull of his southern roots.

Well past the witching hour, tossing and turning in bed, in Matara, the writer found something amiss in an otherwise perfect southern night. There was no rub-a-dub of yak bera (low-country drum). During his childhood, pulsating tom-tom beating at thovil or devil dances in his neighbourhood would lull him to sleep.

On that sleepless night, the writer kept thinking to himself, “Where the hell have all the devils gone?”

Coexistence with devils

We, the southerners, evince a proprietary interest in yakas or devils. They may frighten others, but they are no match for the southern exorcists or kattadiyas, who claim to be capable of taming or even banishing them—for a hefty fee, of course. Devil dances are the events where yakas that possess humans are exorcised; they are humiliated in every conceivable manner before being driven out; no yaka with an iota of self-respect would take such mortification lying down if it was capable of striking back. So, a logical conclusion may be that the devils are scared of the southern kattadiyas!

During the writer’s growing-up years, the township of Matara encompassed only a small urban area, beyond which lay rural backwaters, where humans and yakas had opted for an uneasy coexistence, with the latter often overstepping their limits, warranting the intervention of devil dancers.

The writer, as a child, used to think that beyond the area illuminated by household lights in the neighbourhood, all the starving devils in the country converged for the night, keeping a sharp lookout for the brats who dared venture out after dusk. So, he and his elder brother carefully avoided crossing the border demarcated by garden lights lest they should provoke demonic retaliation or even end up as the dinner of the supposedly evil ones.

Cane that drove out fear of devils

The credit for making the writer and his brother overcome their fear of yakas should go to their mother or her unforgiving cane, to be exact. She was not equal to the task of catching them during daytime, try hard as she might, for their mischief or misbehaviour. So, cases against them were heard in absentia in the daylight hours and sentences were duly passed, and all that remained to be done upon their return home at dusk was to mete out punishment, which was severe.

Those were the pre-Child Protection Authority hotline days, and flight was the only option the hapless brothers were left with. So, a scared duo would show their mother a clean pair of heels each, but, darn it, their sprints would end where the dark territory of the devils began!

With the passage of time, the two brothers would summon the courage to cross the line of control between human territory and that of the yakas, and their mother gradually lost interest in the nightly sprints. Otherwise, she would surely have gone on to clinch an Olympic medal for running, a couple of decades before Susanthika! (In ‘My Family and Other Animals’, Gerry Durrell quotes his elder brother as having said that they can be proud of the way they have brought up their mother!)

Conquering fear: Ultimate test

Making an occasional foray into the devils’ territory at night was one thing, but overcoming the fear of demons once and for all was quite another; the ultimate test of masculinity for teens, in that part of the country, sans proper street lighting at the time, was returning home all alone well past midnight after watching a horror movie at a cinema in the nearby town. There were occasions when the writer had to come back home all alone on bicycle or using shank’s pony, passing two cemeteries with large tombs, which, he thought, had been purpose-built for scaring brats who dared wander after nightfall!

‘The Exorcist’ was a scary flick that made any mid-teen worry about the prospect of having to walk the dark roads that lay between the cinema and his home, after the 9.30 pm show––all alone. The snakelike tongue the possessed girl flicked from time to time almost touched the petrified faces of the writer and his friends occupying the front-row seats. Equally blood-curdling were the films like ‘A Nightmare on Elm Street’. Dracula also would unnervingly affright them initially to the extent of making them see, on their way back home at night, the blood-sucking creature’s ghastly visage everywhere like a politician’s grinning mug on election posters defacing wayside walls. But later Dracula became a joke, for he/it overdid bloodletting like the violent characters in Tarantino’s edge-of-the-seat thrillers full of gratuitous gory scenes. Subsequently, horror movies became so funny that Hitchcock’s ‘Psycho’ amused the writer instead of giving him heebie-jeebies. (Hitchcock is heard saying in an audio recording in the BBC archives that he intended ‘Psycho’ as a comedy, but people took it for a horror movie, and he kept quiet!)

Witnessing the banishment of devils

Years prior to the late arrival of television in Sri Lanka were characterised by a chronic lack of entertainment, and the yakas were considerate enough to move in to fill that vacuum, from time to time, with demonic possessions, which necessitated all-night devil dances. They were the events that provided the writer, his brother and their friends an up-close look at numerous devils, especially Mahasona and Ririyaka, who were in fact the devil dancers wearing magnificent wooden masks representing the anthropomorphic personifications of different yakas.

Frantic yet spellbinding dancing lasted for hours on end to the accompaniment of hypnotically rhythmic drum beating, which reached a crescendo towards the wee hours. The exorcists would go into deep trances then, muttering gobbledygook, which apparently only they and the southern devils understood.

The disease-causing devils were identified, summoned and banished much to the relief of the possessed and family members. Thovil could be considered kangaroo trials for devils. Those ceremonies were well choreographed and highly entertaining; they included scenes that provided comic relief in the form of dialogues between yakas and devil dancers, who ridiculed the former much to the amusement of the spectators. Obscenities that some tipplers who were sozzled to the gills hurled at the devils from the audience made thovil even more entertaining like stormy parliamentary sessions.

Seeing and surviving real yakas

The writer’s encounters with the real yakas happened in the late 1980s, when the southern parts of the country ran red with youthful blood due to the JVP’s reign of terror and the savage counterterror operations carried out by the then UNP government.

Two macabre scenes are etched in the writer’s memory. One day, while travelling from Matara to Peradeniya in 1988, he counted more than 30 blindfolded, mutilated corpses of youth along the way—about 10 being burnt on the roadside at the Ahangama junction, six under the Panadura bridge and the others at different locations along the Kandy-Colombo road up to the Galaha Junction. (Crowds near heaps of corpses, which bore unmistakable marks of torture, would make buses slow down or even stop.) On that day, the writer boarded a Colombo-bound bus, which left Matara at dawn after the curfews imposed by the government and the JVP were lifted. The clunker stopped at an eatery in the Ahangama town, where there was a heavy military presence, as the bus crew thought that no other restaurant would be open beyond that point.

A little distance away from the eating house, about 10 corpses were in flames on a tyre-pyre on the roadside, and a revolting stench of burning human flesh pervaded the air, but the passengers were tucking into buns, etc., and sipping tea quietly while beholding the gruesome scene. It was a sign of the public being desensitised to the horrors of mindless violence unleashed by the Red, Green and Khaki yakas.

The real devils were the JVP killers and the counterterror operatives who went on killing sprees and ran dungeons like the Eliyakanda torture camp or the K-Point in Matara.

Hell must have been empty at that time, for all the devils were in this country preying on the youth!

Death-dealing JVP sparrow units armed with an assortment of weapons unleashed hell in the South, which was a hotbed of terror and counterterror. The JVP ordered poll boycotts, ca’cannies, work stoppages and protests at gunpoint, and noncompliance as well as dissent was suppressed in the most brutal manner.

Many civilians who dared exercise their franchise in defiance of the southern terrorists’ calls for poll boycotts died violent deaths at the hands of the JVP death squads, some of whose victims were burnt alive. Not to be outdone, the then UNP regime set in motion its Caravan of Death, which left streets strewn with corpses of young men and women.

‘The Mountain of Death’

The writer remembers a piteous sight he witnessed more than 30 years ago in a far-flung part of the Ratnapura District. He was a member of a media team, tasked with reporting on the digging up of a mass grave on the mist-clad summit of picturesque Suriyakanda.

The skeletal remains of over one dozen schoolboys from Embilipitiya abducted, tortured, murdered and buried by the counterterror units deployed by the UNP government were found buried in a deep pit.

The mass grave was located away from the winding main road, and only four-wheel drives could reach it. Nylon boot laces used to truss up the victims were still intact. The exhumation process proved extremely tedious. Dusk was falling with a thick blanket of an unforgiving fog enveloping the mountaintop reducing visibility to near zero. The then Opposition politicians and others engaged in the exhumation of what remained of children’s corpses had to call it a day and return to Colombo.

The media team headed for Suriyakanda again the following morning itself. At several places near Pelmadulla, where they broke the journey, they found rotting corpses removed from nearby cemeteries and dumped on the roadside by pro-UNP thugs as a warning. Worse, cattle bones had been dumped into the partially dug up mass grave on the Suriyakanda summit. However, digging continued without any untoward incident thereafter and parts of more human skeletons were unearthed; all of them were dispatched to the Embilipitiya Court under magisterial supervision and subsequently sent for forensic examination. Some of those who were involved in the mass murder were brought to justice.

Mass displacement of yakas

Much is spoken these days about the displacement of humans and animals like elephants, but that of the southern devils has gone unnoticed! In Matara, urbanisation has led to a sprawling conurbation that encompasses what used to be the countryside, which was home to many yakas.

Urbanisation causes residential areas to shrink and eventually make way for the expansion of commerce. The spread of banlieues and rurban areas has pushed the devils further into the hinterland in the South. Humans’ insatiable greed for land has not spared even cemeteries where some awe-inspiring, old mausolea once stood majestically, intensifying the thrill we, as schoolboys, used to get from horror flicks. This detestable graveyard grab, as it were, however, exemplifies a saying popular among the southerners; roughly rendered into English it means that the people who are scared of devils do not build houses on cemeteries.

Unbridled urbanisation, the advancement of medicine, increasing accessibility to healthcare, and the proliferation of education, which inculcates scientific reasoning and critical thinking in the public, must have caused the mass displacement of yakas. Alas, whatever the reasons, Matara has become much poorer without its demons (not the gun-toting ones)—at least for those who grew up among them.

by Prabath Sahabandu

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India-Pakistan standoff likely to continue indefinitely

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Armed forces at the Line of Control.(Representational photo)

In a sense India-Pakistan ties have come full circle. Way back in the late forties of the century past these regional heavyweights emerged as two deeply politically polarized states. On the one hand there was India, officially committed to democracy, inclusivism and secularism. On the other, there was Pakistan which championed Islamism in governance and had more of a theocratic bent. Religion has become a defining feature of its national identity.

While the expectation of the advocates of regional peace over the years was that India and Pakistan would make some headway in narrowing their political differences and defuse tensions, this has not come to pass although there have been brief periods when the states met with relative success in normalizing relations. As is known, the differences in respect of political identity between the countries have contributed in some measure to the countries going to war. The partitioning of India in 1947 was an exemplar of these divisive tendencies.

The current hostilities between India-Pakistan, which escalated to grave heights, point to the fact that the South Asian region is very much back in the late forties when war and bloodshed seemed to offer the only means of resolving the countries’ differences.

In the current circumstances, the Indian political leadership had no choice but to take a tough position on Pakistan following the killing of some tourists in Indian-administered Kashmir recently. India cannot afford to be seen as weak. As a dominant regional power it should be seen as attaching priority to its national interest, part of which is the protection of its people.

Yet, provision needs to be made in their bilateral discourse for the conduct of political negotiations to narrow the countries’ differences. For instance, the characterization of the current halt in military operations by India as ‘a pause’ would not help in promoting a sustainable political dialogue. It would not inspire any confidence in Pakistan that an improvement in ties is possible if it gives talks a try.

Besides, the ‘Modi Doctrine’ on terror itself could have a divisive and polarizing impact. Given that ‘terrorism’ is a conundrum of the first magnitude, the possibilities are slim of the sides going to the conference table with optimism and hope that the causes underlying their hostilities could be ironed out in a hurry.

Going forward, it could be best for the countries to avoid the use of polarizing language. After all, no two parties are likely to see eye-to-eye on ‘terror’. But for the purposes of facilitating a dialogue, the excessive spilling of civilian blood by state and non-state actors could be defined as terrorism. From this viewpoint the killing of civilians in Pahalgam in India-administered Kashmir could be defined as terror.

However, the avoidance of polarizing language could prove difficult for India, given the country’s current political and opinion climate. But it would be possible for the states to launch a dialogue for the defusing of tensions based on a step-by-step approach. The space needs to be opened for a peace process that could accumulate gains gradually.

Considering also that the recent incidents have triggered a great deal of nationalist discourse on both sides of the border, delays to launch an India-Pakistan peace dialogue could prove fatal. This is on account of the fact that a hardening of attitudes on both sides of the border could make peace work insurmountably difficult.

However, if a firm foundation is to be laid for a result-oriented bilateral political dialogue, terrorism needs to be condemned and eschewed by both states. India of course is doing this. Pakistan needs to follow suit. From this viewpoint, one would need to agree with Prime Minister Modi that while there could not be wars in the current world order it is also not the time for terror. Negotiations need to take the place of wars and armed combat but all parties to a conflict need to prove their bona fides by condemning terror out of hand.

While much is expected of the principal politicians on both sides of the border, civilian publics in India and Pakistan too need to ensure that peace rather than war dominates bilateral discourse. One does not see a Mahatma Gandhi emerging on the Indian subcontinent in the foreseeable future but peace groups on both sides of the divide need to take centre stage, join hands and work indefatigably towards peace between India and Pakistan.

For far too long in South Asia, nationalistic politicians have been tamely allowed by civil society to dominate public discourse on matters of the first importance for the region. As a result, the South Asian Eight have been prevented from coming together and building bridges of unity among the states concerned. Differences rather than commonalities come to be emphasized and friction rather than concord characterizes regional relations. A case in point is India and Pakistan.

Unfortunately India’s secular and inclusive identity has suffered some erosion over the past few years as a result of nationalistic discourse coming to dominate central government thinking. This seems to have happened to the extent to which India’s secular and inclusive nature has been allowed to be eclipsed by democratic forces. Progressive, democratic opinion in India needs to step in to rectify this imbalance.

Accordingly, the commentator would not be wrong in stating that in their essentials, India-Pakistan relations have come full circle, so to speak. They continue on a largely confrontational course. Much will depend on whether India could re-emphasize its secular, inclusive and pluralistic identity and help in shaping inter-state ties within the region along these parameters.

For their part, dominant political opinion among India’s neighbours should consider it a foreign policy priority to shed their blinkered view of India being a ‘Big Brother’ of some kind and learn to live with it amicably. This should not be viewed as succumbing to Indian domination of any kind but as an essential policy component that serves the enlightened national interest of these neighbours.

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Sri Lanka energy crisis: The Future – Part II

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Authors: Emeritus Professor I.M. Dharmadasa; Emeritus Professor Lakshman Dissanayake; Emeritus Professor Oliver Ileperuma; Professor Wijendra Bandara; Ms Nilmini Roelens; Mr Saroj Pathirana; Professor Chulananda Gunasekara; Eng. Parakrama Jayasinghe; Dr Keerthi Devendra; Dr Geewananda Gunawardana; Dr Lakmal Fernando; Dr Vidhura Ralapanawa; Dr. Ajith Weerasinghe

(First part of this article appeared yesterday)

7.2 CEB’s resistance to renewable energy

CEB is a government owned organ formed to serve the nation. Citizens of Sri Lanka appreciate and value the work of its staff who work hard to provide an essential service to her people. However, the CEB’s unwillingness to change and ongoing resistance towards renewables was not only disappointing but has now become entirely unacceptable.

Whilst the stated energy policies place renewable energy high on the agenda and certainly, by 2050 Sri Lanka has made international commitments to supplying 100% of its needs via zero carbon energy, and 70% renewable energy by 2030, there has clearly been little or no effort to invest in renewable energy infrastructure.

Had the CEB done so diligently, in compliance with the dictates of international commitments and common sense, no lone macaque nor weather pattern could have caused nationwide power outages. What guarantees that another monkey would not trample a transformer again? It beggars belief that the entire nation should be kept in the dark across three days because of one primate.

8.0 A numbers game

Back in January 2025, the independent power regulator the Public Utilities Commission of Sri Lanka predicted a 44 billion LKR surplus profits7 for the CEB and recommended that a reduction in price be passed on to the consumer. Following initial resistance by the CEB it would appear a public consultation led to some cuts ensuing.

In 2024 public financc reported a quarterly profit of 34.5 billion LKR with a total net profit of 93 billion LKR for the CEB.

“Despite a drop in revenue, the CEB posted a 67 percent profit increase to 34.5 billion LKR for the quarter ending June 2024, largely due to lower financial expenses and costs.”

Despite these profits, a few weeks ago, CEB announced that the unit price for roof top solar pay back schemes would be scrapped altogether or reduced further in what was clearly a move to disincentivise the use of a freely available renewable energy source. See more about this here.

There are just over 100,000 rooftop solar systems in Sri Lanka which belong mainly to private households, funded through their hard-earned income or using a bank loan.

Given there are around 7 million consumers of electricity in the country we do not understand how a mere 100,000 roof-top solar panels could possibly render the entire national grid to be so fragile.

It is disingenuous for a country to commit to Agenda 2030 and make commitments at UN COP meetings on climate change, only for a state organ like the CEB to discourage and seek to extinguish the renewable energy sector.

In July 2024, CEB reduced the solar tariff from Rs 37 per unit to Rs 27 in violation of a cabinet decision which required such reduction to be approved by the regulator PUCSL (Public Utilities Commission). This behaviour suggests that CEB regards itself as being unaccountable even to the PUCSL. The CEB’s latest proposal is to further reduce the pay back to Rs 19, 17 or 15 per unit, depending on the production level or to scrap it altogether.

Incongruously, we understand the CEB continues to seek to import emergency fossil-based power at much higher rates of over Rs. 70 per unit.

Why?

We find no logical explanation offered to paying so heavily for imports of fossil fuels whilst thwarting the renewable energy sector from expanding.

As a part of its Clean Sri Lanka strategy, perhaps it would be pertinent for the new Sri Lankan government to consider not only complying with the COP international commitments to offer clean renewable energy but also to consider if any potential “conflict of interests” exists within the Sri Lankan energy sector.

Similar pay back schemes to Net plus or Net plus plus are available throughout the world as a means of encouraging citizens to take advantage of the move towards Net zero and to promote the universal use of renewable energy as a means of addressing climate change.

The CEB’s concerted efforts to undermine and reverse renewable energy commitments and its own failure to invest in the grid infrastructure to support a move towards a 100% renewable energy goal by 2050 is apparent.

The further unit price reduction on pay back schemes and the recent press releases leaving the country in the dark over vacation periods were all the more perplexing since the Asian Development Bank approved a further loan for $200 million in November 2024 to improve the country’s energy infrastructure: See “ADB has approved a $200 million loan to upgrade Sri Lanka’s power grid, enhance renewable energy integration, reduce power interruptions, and modernize infrastructure.”

Have these funds now been released, and have they yet been applied for the purposes for which this loan was offered by ADB?

We understand ADB funding given to develop the infrastructure for enhanced absorption of distributed renewable energy has largely been used to develop higher capacity HT transmission lines and not the much cheaper distribution sector development of roof top Solar PV. Failure to install 20 MW grid scale batteries targeted by Jan 2024 increasing up to 100 MW by 2026 would be an example of the many issues in CEB’s infrastructure plans.

The World Bank announced on 7 May 2025 its approval of a $1 billion loan to support growth in Sri Lanka of which $185m is to be applied to the energy sector. The agreement is “Supporting new solar and wind generation equivalent to 1 gigawatt of capacity, aimed at lowering electricity costs for families and businesses. The project is expected to mobilize over $800 million in private investment and includes $40 million in guarantees.”

It is also common knowledge from previous Cope committee discussions, that Senior CEB engineers’ salaries were between ~Rs 400,000 and ~900,000 per month, and their income tax was paid by the CEB and not by the individuals themselves. Could this be a violation of the Income Tax regulations? It removes individual responsibility for taxpayers. We understand the organisation has also approved an automatic salary increase of 25% after every three years.

By comparison the current salary of a senior medical doctor is believed to be about Rs 94,000 pcm, and a graduate teachers’ salary is about Rs 54,000 pcm. There appears to be a considerable disparity for essential services.

Whilst we appreciate the hard work of CEB staff, it does beg the question whether more money should be reinvested in the grid infrastructure to better serve the nation than in such lucrative salaries for state employees in the energy sector.

Indeed, the recent press release seeking to temporarily shut down roof top solar and mini-hydro systems appears only to demonstrate the failure of the CEB to meet its own responsibilities in updating the national grid.

· Recommendations for the future of Sri Lanka’s energy

· At present we have a very fragile grid and the CEB should strenuously endeavour to minimize energy leakages and improve the grid by replacing weak transformers and grid lines. Such continuous improvements will enable us to move gradually towards a “Smart Grid” enabling absorption of large amounts of freely available intermittent renewable energies like wind and solar.

· Currently we have ~2050 MW of renewables installed, comparable to hydroelectricity. When solar power is plentiful during daytime, hydro power can be reduced simply by controlling the water flow without any technical difficulties. This is one way of assuring energy storage while balancing the grid energy. In addition, Battery Energy Storage Systems (BESS) and pumped water storage plants should be introduced.

· The future energy carrier is green hydrogen (GH) produced by electrolyzing water using both wind and solar. GH can also be converted into ammonia and methanol to produce fertilizer and be applied for other industrial uses, and for thermal energy in industry. Sri Lanka already has the Sobhadanavi LNG plant which is already commissioned but cannot be used for lack of supply of LNG. Renewables can bridge the gap.

· Sri Lankan energy should be produced by a technology mix, including large hydro & mini-hydro systems, biomass, solar, wind and some limited imported fossil fuels which must be phased out. While accelerating renewable energy use, reliance and perpetuation of imported fossil fuel must be gradually reduced.

· Local solar energy companies should install high quality solar energy systems and provide good after-sales services. The SLSEA must introduce adequate consumer protection guidelines and mandate to regulate the Solar PV service providers. PV companies should also collaborate with local electronic departments to manufacture accessories like inverters to create new jobs and reduce the total cost of the systems. As a country reliant mainly on agriculture, solar water pumping and drip irrigation systems should be introduced for enhanced food production.

· The optimal use of renewable energy and the move away from fossil fuels should include the development and encouragement of the use of electric vehicles. Solar powered charging stations could be provided whilst EV are introduced in a phased manner.

· It is important to increase public awareness through government funded campaigns and schools’ programmes. The public must become aware of the risks of using imported and expensive fossil fuel and the benefits of renewables. Individual efforts should be encouraged to gradually reduce the use of fossil fuels and increase renewable energy products to achieve a cleaner environment, health benefits and enhanced standard of living conditions. (Concluded)

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