The Hon. (Dr.) Harsha de Silva

¶ 01 Thank you, Hon. Deputy Chairperson. On the Energy Ministry’s Estimates: the 2024 Electricity Act reforms aimed to unbundle the CEB—separating generation, transmission and distribution, and creating multiple generation entities—to increase efficiency, transparency, and ultimately reduce tariffs. We supported reform to lower costs for households and SMEs. However, the 2025 amendments effectively re-bundled parts, keeping 100 percent state ownership of aggregated generation—hydro (Mahaweli), thermal (diesel/coal), wind, solar—under one company. That undermines private investment appetite that the earlier framework allowed (up to 49 percent). For example, placing LTL Holdings under the Transmission Company raises questions of logic and governance. Who leads this transformation? Where is the expert panel? Why no international consultancy support?

¶ 02 Engineers opposed your eight-page restructuring plan; now we hear you are redrafting it. Is there a master plan, due diligence, action plans, checklists, timelines, and clear accountability?

¶ 03 On transmission: at SOC chaired by Hon. Marikkar, PSRS head Pubudu Niroshan said USD 5 billion is needed over five years, with USD 1 billion public and USD 4 billion private. But the 2026 Estimates show only Rs. 21 billion capex in total for “Power Generation, Distribution & Development,” of which Rs. 7.6 billion is for ADB/JICA loan servicing; Rs. 1.1 billion for the Colombo Waste-to-Energy plant gap; Rs. 0.302 billion for SLAEB capacity; Rs. 5.4 billion for Kerawalapitiya–Port 2nd transmission line; Rs. 1.5 billion for Sampur–Kappalthurai transmission; and Rs. 1.88 billion for a 75 MW synchronous condenser at New Habarana. If USD 1 billion/year is needed for transmission alone (~Rs. 310 billion), the Budget allocates only about Rs. 20 billion for the whole sector—roughly 6–8 percent of what is needed for transmission. How then will costs fall?

¶ 04 Further, the ADB loan for the Kerawalapitiya–Port line is USD 52 million at SOFR plus 0.58 percent (~4.52 percent), but with a Public Debt Management Office risk premium of 4.34 percent, the effective rate is about 8.85 percent. Paying nearly 9 percent USD debt and then promising tariff reductions is questionable. We also expected incentives for solar PV with storage in this Budget—none materialized.

¶ 05 Given unexpected Treasury revenues, notably circa Rs. 600 billion extra from fuel taxation due to import parity, I propose creating a dedicated fund from petrol/diesel tax receipts to subsidize PV storage batteries.

¶ 06 If our plan remains confused, we cannot sustainably reduce tariffs. Thank you.