The Hon. Ajith P. Perera

¶ 01 Hon. Chairman, under the Committee Stage of the Appropriation Bill 2025, I move that under Head 119 relating to the Ministry taken up today, all recurrent and capital expenditure in each programme be reduced by Rs. 10, in keeping with tradition.

¶ 02 Hon. Chairman, the energy and electricity sector accounts for more than one-third of our economy’s effective capacity. The focus we give to this sector and its reforms will determine the country’s future path. Everyone speaks of creating a production-based economy; there is no dispute. The biggest obstacles to achieving this are high energy prices and concerns about reliability and quality. If we do not respond immediately, we cannot overcome the challenge of rebuilding the economy.

¶ 03 Therefore, strategic and policy reforms are urgently needed across electricity, petroleum, and gas under the Ministry of Energy. They must move in the right direction. As the Samagi Jana Balawegaya (SJB), we have a clear policy. Our Leader, Hon. Sajith Premadasa’s presidential policy statement set this out in detail. We are ready for a policy change and to work collectively as a nation.

¶ 04 In June 2024, Parliament passed a new Electricity Act. When that Bill came to Parliament, the SJB went to the Supreme Court with senior counsel and argued extensively on suitability and constitutionality. Because of the issues we raised, the Court focused on affirming citizens’ rights over energy security and proposed serious amendments. As a result, many deficiencies were addressed before passage. However, shortcomings remained, and as a responsible Opposition, the SJB proposed further amendments in Parliament. Our proposals were not accepted, which we regret. Thus, beyond the Court’s limited interventions, no broader policy corrections were made. You promised at the presidential election to bring an entirely new law; later, the Government shifted to amending the existing law with transparency and consultation with stakeholders and experts, as stated in your policy platform.

¶ 05 Unfortunately, the proposals now brought to rectify deficiencies would, instead of taking the sector forward, turn it backwards by constraining domestic and foreign private investment in generation, transmission, and distribution, especially in electricity.

¶ 06 Hon. Chairman, the present Minister submitted a Cabinet Paper on 23 January 2025 with a Concept Paper dated 20.01.2025 proposing that amendments be drafted on that basis. Critically, this was done without proper consultations with stakeholders, although time was later extended. Even the private think tanks engaged in the sector, including one I am associated with in a non-commercial capacity, were not duly consulted.

¶ 07 Subsequently, the Minister of Finance, Hon. Anura Kumara Dissanayake, submitted observations dated 03.02.2025. I table those Cabinet documents and his observations. Annex 1 to the observations, signed by Hon. Dissanayake, states clearly that the concept paper as presented is fundamentally flawed, regressive, would deter future domestic and private investment in electricity, and runs counter to understandings reached with international institutions.

¶ 08 Therefore, Hon. Nalinda Jayatissa, within your Government there is a serious policy contradiction on the energy sector. After the Energy Minister relied on a committee he appointed to move to drafting, the Finance Minister’s proposals contradict that approach. Routine adjustments by Finance to a line ministry are normal; but here, the conceptual frameworks are diametrically opposed. If the Government proceeds amid such contradictions, it will harm the country, the Government itself, and delay or derail essential reforms via litigation, conflicting policies, and injunctions, ultimately reversing development.

¶ 09 I table the Finance Minister’s observations and related documents dated 03.02.2025.

¶ 10 We urge you, responsibly, to resolve this policy contradiction. We are ready to cooperate, across party lines, to implement urgent, time-bound corrections in the energy sector. Please consider our constructive proposals.

¶ 11 On transmission and distribution, our focus has been insufficient; debate has often centred only on generation. Today, we have about 1,400 MW of solar integrated, mainly from the “Soorya Bala Sangramaya” launched on 06.09.2016. Now we hear the system cannot manage that 1,400 MW due to transmission and distribution constraints. We must invest heavily in transmission: Kilinochchi–Habarana 400 kV line; Habarana–Kappalthure 400 kV with AIIB financing (underway); Habarana–Victoria–Kirindi Oya 400 kV; and Hambantota–Monaragala 400 kV. Completing these four would resolve many transmission issues for the next 20–30 years. We must also strengthen system balancing, not just generation.

¶ 12 The system’s weakness became notorious after the incident at the Panadura Grid Substation, where a monkey caused a failure, exposing vulnerabilities. May that creature rest in peace. To remedy weaknesses, we need battery storage: 200 MW at Habarana, 200 MW at Hambantota, and 100 MW at Kollonnawa, in addition to the Aranayake pumped storage project. Further technical upgrades are needed. The National System Control Centre that had stalled by 2015 was completed by 2018; even now, another control centre upgrade is required with ADB and other support. Without it, we would be in a worse state.

¶ 13 On pumped storage: beyond Aranayake, consider a Victoria–Randenigala pumped storage using Victoria as upper pond and Randenigala as lower pond, possibly coupled with floating solar, at comparatively lower cost, leveraging existing infrastructure and grid proximity. This is attractive to private investors due to minimal land acquisition.

¶ 14 We need around USD 6 billion in the next 2–3 years, not in 20, and from multiple foreign and domestic investors familiar with Sri Lanka’s terrain and power system. Under the current Electricity Act, and the draft proposals, this is not feasible. Create a win-win legal framework that attracts both local and foreign investment urgently.

¶ 15 Sri Lanka’s National Energy Policy and Strategies, declared by Gazette Extraordinary No. 2135/61 of 09.08.2019, is the governing legal policy document for electricity, gas, and petroleum. Successive personalities should not make ad hoc pronouncements. Update policy coherently with expert participation across public and private sectors.

¶ 16 Your “Prosperous Country – Beautiful Life” policy statement contained 41 energy proposals; only four find mention in this Budget. We are in economic difficulty; reforms must be swift. You have a strong Government; if not now, when?

¶ 17 Hydrogen will be vital. With superior wind resources in the North and strong solar, we can produce surplus renewable energy and pivot to green/blue hydrogen for transport, industry, and even households, as some countries already do. While we cannot adopt all technology at once, early-stage research is necessary. Yet the Budget lacks even a symbolic allocation to commence hydrogen research via the Sri Lanka Sustainable Energy Authority (SLSEA). Strengthen SLSEA—it has been instrumental in wind and solar resource development and early projects like Mannar (104 MW), and underpinning private wind additions (~200 MW). Build the transmission backbone needed to evacuate resources such as Pooneryn (>1,000 MW potential: ~240 MW wind, ~800 MW solar on land, with even greater offshore potential). Recruit and retain expert engineers with competitive remuneration; otherwise, we will lose them overseas.

¶ 18 On rooftop/utility solar: restrictions and curtailment, including Sunday curtailments, are creating severe distress for small domestic developers who bid competitively with modest ROIs (16–20%). If curtailment is technically unavoidable now, apply fair, transparent, and minimal curtailment and move rapidly to technical fixes instead of blanket stoppages.

¶ 19 On petroleum: expedite the Hambantota refinery agreement signed by the previous Government, or make a clear decision on refurbishing or replacing the existing refinery—do not dither. Transition to a smart grid; it will lower consumer bills, improve efficiency, and ease control. Invest in distribution and transmission upgrades accordingly. Thank you.