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Tuesday, 22 December 2020 02:03 - - {{hitsCtrl.values.hits}}
Cabinet approval to reduce PUCSL powers likely to have impact on power industry
By Asiri Fernando
Cabinet yesterday gave approval to seek advice from the Attorney General (AG) to amend the Public Utilities Commission of Sri Lanka Act and the Sri Lanka Electricity Act and related legislation as the Government pushes ahead with winding up the PUCSL, which opponents say will weaken industry regulation and open the door to large-scale corruption.
Ministerial sources confirmed the proposal to Cabinet to reduce the powers of the PUCSL and replace it with new legislation was given approval. The Cabinet proposals seek to limit the powers of the PUCSL, which currently acts as industry regulator, by allowing it to continue with consumer protection and regulating safety standards while allowing new power development projects to be decided by the Cabinet.
A note presented to Cabinet yesterday said that the PUCSL had gone beyond its role as regulator and blocked several new power projects which were urgently needed to meet the high demand for electricity.
However, PUCSL unions have denied this and emphasised that
the bulk of projects were speedily approved. They contend that some projects were only delayed because they were formulated in contravention of the Sri Lanka Electricity Act, which prohibits avoiding tender procedures or because of other technical irregularities by the Ceylon Electricity Board (CEB).
Union members have also said billions in public funds were saved due to PUCSL opposing multiple emergency power purchases over the past four years.
The Cabinet note said that the failure to add at least 300 to 400 megawatts to the national grid in the last four years would result in worsening of the situation in the power sector in the country after April 2021.
It said that the power sector of the country was in jeopardy due to the actions of the PUCSL.
The document, presented to Cabinet by Prime Minister Mahinda Rajapaksa, said that the PUCSL had failed to discuss with relevant stakeholders, including the CEB and Power Ministry, about the looming crisis in the power sector and by its action deterred those who wanted to invest in new projects.
The Cabinet note said the Government had two options: to continue with the PUICSL as it is or to discuss with all stakeholders in the industry as well as obtain the views of the consumers and prepare a new policy for the sector.
It added that within the next 24 months, foreign investments to the tune of $ 2,000 million could be attracted for which strict monitoring and restructuring of the sector was needed. These projects are likely to include a 300MW extension to the Norochcholai Coal Power Plant and a new LNG plant, which is expected to begin construction in January.
Prime Minister Mahinda Rajapaksa in his Budget Speech last month said the Government proposed to amend the Public Utilities Commission Act and Ceylon Electricity Board Act to allow the rapid implementation of projects. However, there was no mention of scrapping the PUCSL.
Soon after Secretary to the President Dr. P.B. Jayasundera wrote to Treasury Secretary S.R. Atygalle instructing him to take necessary procedural steps to close down PUCSL and absorb the technical staff to the Department of Planning and the Ministry of Power.
Subsequently all five commissioners of the PUCSL resigned after being requested to do so by the Treasury Secretary. Since then the move to wind up the Commission has been opposed by some in Government and by several trade unions in the sector.
PUCSL is the economic, technical and safety regulator of the electricity industry in Sri Lanka and the designated regulator for petroleum and water services industries.
