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The Government on Thursday defied both Ceylon Electricity Board (CEB) trade unions and the Opposition to push through the Sri Lanka Electricity Amendment Bill, which aims to fast track renewable energy projects.

The bill will allow any person to apply for a licence to generate electricity. It also removes the restriction imposed on a person to be eligible to apply for the issue of a generation licence to generate electricity over and above the generation capacity of 25 Mega Watts (MW).  

Several CEB trade unions, including the powerful CEB Engineers’ Union (CEBEU) had strongly opposed the amendments, with the engineers even launching trade union action which they had warned could lead to an island-wide blackout. Indeed, many areas, particularly in the Western Province lost power earlier that morning for several hours, though the CEBEU had announced that it had temporarily called off its trade union action following talks with President Gotabaya Rajapaksa.

The trade unions and Opposition parties objected to the bill, pointing out that removing competitive bidding would encourage corruption.

However, opening the debate, Power and Energy Minister Kanchana Wijesekara said the bill was an excellent opportunity to remove a legal obstacle that had been in place since 2013.

“Based on coal and fuel prices in May, it costs us Rs. 756 billion annually to generate electricity. However, we only earn back Rs. 250 billion from the sale of electricity. We have a Rs. 500 billion gap,” he said.

The country could no longer rely on coal and diesel power plants. Many Acts currently in operation actually hamper renewable energy projects and a section of officials regularly try to use existing laws to block such projects from being implemented, Minister Wijesekara claimed.

The new amendment would also pave the way to achieve President Gotabaya Rajapaksa’s target of generating 70% of electricity from renewable energy sources by 2030, he added.

The minister struck a defiant note, insisting he would not be swayed by threats from “terrorist groups” masquerading as unions. He also alleged the Government suspected sabotage in relation to the power interruptions from many parts of the country that morning. “We can’t govern if we are frightened of unions. We need to change this situation.”

The Samagi Jana Balawegaya (SJB) agreed with Minister Wijesekara about the need to fast track renewable energy projects, economist and SJB Parliamentarian Harsha de Silva told the House.

“But having competitive bidding is essential for large scale energy projects. You can’t implement such projects without competitive bidding. This is not done anywhere in the world,” he said, adding that the lowest price could not be determined without a competitive bidding process.

Dr de Silva proposed an amendment from the SJB to ensure that projects beyond 10MW go through a competitive bidding process. He pointed out that most renewable projects currently stuck in limbo for years were far below 10MW and as such, all of these can be cleared swiftly once the new Act was passed.

SJB MP Nalin Bandara noted that many had concerns that competitive bidding was being done away with to make way for large scale renewable energy projects such as the ones planned by India’s Adani Group in Sri Lanka, which may cause millions of dollars in losses.

Opposition Leader Sajith Premadasa said the Government was attempting to mislead the country by portraying that doing away with a tender process was the best way to encourage renewable energy projects.

“The Government is claiming we are in the pay of the diesel mafia and are opposing a progressive Act. What is progressive about reducing competition? It is regressive. What they are trying to do is to use the country’s tragic situation to earn something for themselves,” he charged.

National People’s Power (NPP) Parliamentarian Vijitha Herath said the real “terrorism” was the Government’s attempt to do away with tender procedures, paving the way for fraud and corruption, . “This will make it far easier for unsolicited proposals to be approved. All that an interested party needs to do is to get close to a minister and the proposal will be submitted to the Cabinet. Others will say yes. The project will be approved and commissions will be paid.”

The Opposition demanded a vote following the debate on the second reading of the Bill. The bill received 120 votes in favour and 36 against, while 13 MPs abstained.

A separate division was called after the Government rejected an amendment moved by SJB’s Dr. Harsha de Silva to Section 4 of the Bill proposing that all projects over 10MW be subjected to competitive bidding. The amendment was defeated by a majority of 64 votes, with 51 votes in favour and 115 votes against.

The Opposition then called for a vote for Section 4 in its entirety, which was passed by a majority of 70 votes, with 116 voting in favour and 46 against. Accordingly, the bill was passed without amendments.