The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development

¶ 01 Hon. Presiding Member, thank you for the opportunity.

¶ 02 I will first touch on the Sri Lanka Electricity (Amendment) Bill and also the regulation under the Tobacco Tax Act No. 8 of 1999 of the Ministry of Finance. The Act provides for taxation on cigarettes, cigars, beedi and substitutes. It has not been fully implemented. In 2023 a Rs. 2 beedi tax was imposed; at the Budget we decided to increase it to Rs. 3, effective after two years, aligning with inflation adjustments applied to cigarettes and other tobacco products. Hence the Gazette to give legal effect; Excise and the State Fiscal Policy Department are working on this.

¶ 03 On the Second Reading of the Electricity (Amendment) Bill: recently there has been much debate about reciprocal tariffs imposed by the United States. This was an external decision. We intervened diplomatically, and we have been able to bring the 44 percent rate down to 20 percent. That discussion has now quieted, but it deserves acknowledgment.

¶ 04 On the Bill: we cannot view it in isolation or only through economic impact; electricity lies within the energy sector. Globally, energy has underpinned economic success; electricity is a key element. Since the Industrial Revolution, electricity enabled mass production, lower costs, and productivity. Our national policy must take the whole into account. Experts and engineers have long prepared plans. Looking ahead, renewable energy costs fall and capacities rise. Other countries have advanced, but politicization here has prevented delivering results to people and the economy.

¶ 05 Thus we must act on two fronts: correct harmful outcomes created by previous policies and build the foundation for a broad future energy policy. That is the basis for bringing these 2025 amendments.

¶ 06 Some claim the old CEB Act was progressive and we are bringing a harmful Bill. In truth, the 2024 Act was the harmful one. Because of how past Governments used terms—investment, privatization—they narrowed meanings to a single path. A Member earlier conflated privatization, sale, and inviting investment as identical. Privatization is transferring state property to private hands; private enterprise is broader. Our amendments do not sell off or privatize state assets; rather we prepare the ground to invite enterprise and investment. The earlier draft had 12 companies—fragmentation without an integrated mechanism, enabling pieces to be disposed of without system governance. Under our Bill, the entire electricity mechanism—generation, transmission, distribution, consumption and system maintenance—comes under a unified state-governed framework, while enabling efficiency.

¶ 07 Electricity is not a conventional commodity—kWh and MW are standardized; thus pure open-market treatment is inappropriate. A degree of regulation is needed to ensure low costs progressively and in a timely manner. We target 70 percent renewables by 2030. With our hydro base, we must grow wind and solar to achieve that. The target was already marked; we must further reduce costs. If we lock into long-term high-price PPAs, we cannot reduce tariffs. Work must proceed under a comprehensive energy policy to improve efficiency and productivity, because electricity must drive industrial revival and the economy.

¶ 08 On unbundling: it is to improve efficiency and functionality, not to sell. The Generation Company (GenCo) can have any number of subsidiaries, all under state regulation and control—this is not an open-market monopoly issue; it is sovereign responsibility and national security—when power goes out, everything stops.

¶ 09 Under this structure, while transmission remains state-owned, space exists to attract private investment where additional capacity or upgrades are needed. We plan to expand domestic wind and solar and even export surplus power regionally.

¶ 10 We have separated wired from non-wired transmission under a National System Operator to avoid conflicts in operations. This Bill provides the foundation for sustainable and renewable energy to advance within Sri Lanka. Claims that we are selling or harming worker security are false. CEB funds such as EPF and pensions are separate and secure. Workers will choose their placement among six main companies; if everyone opts for one, we will allocate considering preference and demand so all are assigned. No current benefit will be reduced even by one percent.

¶ 11 This is a crucial Bill to reorient electricity within our future energy policy, industrialization, economy, and people’s lives. We seek your support.