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Proposed Electricity Act shocks consumers and trade unions
"Privatisation does not promote healthy competition in the power sector," said Electricity Consumers’ Association (ECA) General Secretary Sanjeewa Dhammika. Pic by M.A. Pushpa Kumara
The proposed new Electricity Act as part of reforms for the State-run Ceylon Electricity Board (CEB), has caused skepticism among trade unions and electricity users about its impact on electricity tariffs.
Electricity Consumers’ Association (ECA) General Secretary Sanjeewa Dhammika said: “The President claims in the budget speech that the CEB suffered significant losses because there had been no practice of revising the electricity bill to reflect the amount the government spent on electricity generation, as of 2013.”
The proposed new Electricity Act and budget in question was a hollow budget with no performance, created to impose taxes on the people without seeking out reasons to incur unimaginable losses, to sell State assets to foreign investors under the guise of restructuring and to please the International Monetary Fund (IMF), he said.
As such, the budget had not included any provision for electricity autonomy. In view of an absence of encouragement and provisions for renewable energy, there was neither concern about low-cost power plants nor relief for the corporate sector, Mr. Dhammika said.
Moreover, the ECA fears that businesses, low-income households and Micro, Small and Medium Enterprises (MSMEs) could have an effect in particular and thereby the overall economy of Sri Lanka, with the new Electricity Act coming into sight.
“Privatisation does not promote healthy competition in the power sector. An attempt of undermining the country’s State entrepreneurship by the Minister-in-charge remains to be seen,” Mr. Dhammika said.
He said the nation’s US dollar reserves were severely impacted by the Minister and the Ministry’s lack of a proper performance programme, which the Central Bank and the Finance Ministry neglected to address. As a result, the people were forced to shoulder the loss, causing inflation to soar. He said the legislature’s and the administration’s weakness were to blame for such an absence of discernment.
Meanwhile, the fact remains that a worst case scenario would develop in the agricultural sector if hydro-power plants were out of State control, as it would be a threat to farmers, and water that sustained our farms, Mr. Dhammika added.
In addition, the Ceylon Electricity Workers’ Union (CEWU) General Secretary Ranjan Jayalal expressed disappointment about the decision on a new Electricity Act the Power and Energy Ministry was leaning towards.
“We have to keep in mind that every reform provides a window for State companies to profit more than foreign organisations,” he said.
“While demonstrating the picture of restructuring the CEB to the people, the Ministry intends to de-nationalise it, including the R1, R2, R3 and R4 power distribution regions to six privately held companies. In addition, sources say the Lanka Electricity Company (LECO) is at the disposal of the Indian TATA Group, while the transmission and generation branch is directed towards the Adani Group. Moreover, Sri Lanka’s renewable energy power plants are being fixed on seven private entities, while the Norochcholai Lakvijaya Power Station is owned by a Chinese company,” Mr. Jayalal said.
Mr. Jayalal said the Ministry intended to sign a 30-year contract with the Indian Adani Group before pertinent Bill was adopted, and tender procedures would be implemented from multiple nations with the enactment of the Act, which displayed that affiliated entities were willing to use illicit means to maximise personal gain.
Thus, it was no surprise that different types of mafia and conspiracies relating to the energy sector rule the roost, which equally signified the reason for the government’s lack of concern in powering up renewable energy power plants in the country. That would deliver solutions for multiple complex issues in the energy industry itself, he added.
“It is ideal in theory, and turns out to be liability. When the current politicians are history, the people will undoubtedly bear the brunt of the load,” Mr. Jayalal said.
Starting from November 29, the CEWU had set out plans in the Laxapana area to bring the people into contact with the bumps of the newest Electricity Act in view of a decline of community engagement in front of an impending crisis, he said.
“It is more likely to reduce the electricity consumption of people to a greater extent. The fears of encroachment will not begin with the Act ahead. Concerns were raised when earlier versions of the Bill were introduced,” Mr. Jayalal added.
Acting in response to the prone situation, a Senior CEB official said the new Electricity Act lacked presentation of a framework for the core principle of adding the least-cost planning developed in the field of energy policy-making as at the current pace, the entire country expected the electricity industry to become market-based, safe and sustainable with a minimal cost. The generation mix between wind and solar power had been determined to be such.
“With the new Act to be out in the open, costs will not be low enough and industries will totally rely on competitively priced power generation systems. Thereby, an electricity tariff hike would also strike in due time adding further misery to Sri Lankans amid the crisis. Therefore the proposed Act being a failure to serve the people’s purpose is apparent,” he said.
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