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A new Electric try ACT paves the way for unbundling CEB

By: Staff Writer

Colombo (LNW):A new Electricity Reforms Bill or an amendment to the Electricity Reforms Act No. 28 of 2002 will be drafted and presented in Parliament soon to regularize the restructuring process, a senior official of the Ministry of Energy said.

The final draft of the new Electricity Act has been handed over to the legal draftsman’s office for clearance and is due to be submitted to the Cabinet for approval, Minister of Power and Energy Kanchana Wijsekera said.

Accordingly, the draft will be presented before the Cabinet of Ministers upon receiving the certification from the Attorney General.

Meanwhile, the power sector reform secretariat, which is due to be established, will develop and implement the transition plan together with financial and technical assistance from the relevant development agencies.

A discussion in this regard was held at the Ministry’s premises on Thursday (06 July), at which Country Directors, Mission Heads, senior officials & energy experts from the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), USAID, World Bank and the International Finance Corporation (IFC) were present, Minister Wijesekera said in a Twitter statement.

A committee appointed on the recommendation of the Minister of Power and Energy, has prepared a proposal and a bill to abolish the Ceylon Electricity Board Act and transfer its resources to 14 companies established under the Companies Ordinance No. 7 of 2007.

Sri Lankan authorities have been struggling for 24 years since 1998 to restructure the debt-laden Ceylon Electricity Board (CEB) and many efforts over the years to push through much-needed reforms have failed due to stiff opposition from workers and other quarters.

The Energy Ministry has been directed by President Ranil Wickremesinghe to expedite the restructuring process of unbundling the CEB by setting up state-owned companies jointly with the private sector management to take over the generation, transmission, distribution and other functions.

There will be one joint venture each for generation and transmission and three or more for distribution, according to the CEB board paper devised recently for the approval of the board of directors before submitting it to the ministry to prepare the cabinet memorandum.

It has also been proposed to form separate power generation joint venture companies to undertake functions of the CEB relating to hydro electricity, thermal electricity, coal power and non renewable power generation, power generation, distribution, and other activities as well as Lanka Electricity Company.

These companies will serve as independent power producers (IPP) and will have to sell the energy they generate to the transmission company, along with other IPPs, the CEB board paper indicated.

One of the main proposals of this draft is to abolish the Ceylon Electricity Board Act and transfer all the resources of CEB to 14 companies in the first phase. By that, all Mahaweli power plants are to be transferred to one company.

“All the power plants of the Lakshapana complex are to be transferred to another company. The Hydro plants including Samanala wewa, Uma oya and Kukule gaga will be transferred to another company. Norochcholai power plant is also to be transferred to another company. In this way, all the power plants belonging to CEB have been targeted to be transferred to 6 companies.

The new Act replaces the Commission with an institution called the Electricity Regulatory Commission under the Minister of Power and Energy. The members of the Commission as well as its Director General are appointed by the Minister of Power and Energy. Because of this, all the inappropriate proposals proposed by the Minister of power and energy.

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