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The proposal by Power and Renewable Energy Minister Ravi Karunanayake to remove economic and regulatory powers of the Public Utilities Commission has been criticised by Non-Cabinet Minister Dr. Harsha de Silva.
A note presented to Cabinet on the matter by Non-Cabinet Minister Dr. Harsha de Silva, via President Maithripala Sirisena, seen by the Daily FT, opposes the move to divest powers of PUCSL.
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Dr. Harsha de Silva |
The Non-Cabinet Minister, in his note presented to the Cabinet of Ministers in April, highlights serious conflicts of interest, while stressing on the need to have an independent regulator to monitor the sector, to ensure quality service and competitiveness in the industry.
The note presented by Dr. de Silva opposing the Cabinet Paper presented on April 5 highlights the conflicts of interest that arise from the proposed changes. Under the Electricity Act 2009 which outlines the purview of the PUCSL, Ceylon Electricity Board (CEB) is an entity managed by the Power Ministry and only one licensee of the PUCSL, and “therefore the line Ministry of the CEB cannot also act the role of the regulator.”
Further he notes that the current setup with PUCSL as the regulator does not have any bearing on procurement, which has to be done following standard Government procurement guidelines, which argues against Karunanayake’s justification that the PUCSL has blocked the commissioning of new power plants.
Dr. de Silva also notes that the PUCSL is the only regulatory institution which the Government can rely on. Noting that in an environment where CEB has over 75% of the market share, the PUCSL has managed to ensure competitive pricing is followed, he argues against Minister Karunanayake’s claim that no independent regulator is needed. Karunanayake, in his Cabinet Paper, says that the economic and technical regulation and monitoring can be done by the Power Ministry itself, which also manages the CEB.
“Regulatory functions cannot be vested in the Ceylon Electricity Board, which is the service provider, or the Ministry, which is the policy formulator/supervisor. The Cabinet Paper indicates that during the last few years, the Ceylon Electricity Board, the Ministry and the regulatory institution have not come to an agreement,” the note says.
Strongly opposing the proposed changes, the Minister in his note to the Cabinet says that there is no need to limit the PUCSL’s powers to safety regulation only, stressing that the need for the three entities, CEB, Power Ministry and the Regulatory Institution to work together and build a productive dialogue.
