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Electricity Reform Bill soon: A better power deal for consumers

by Rajmi Manatunga

The electricity industry is to be reorganised with the formation of separate companies to deal with the generation, transmission and distribution of power.

The initiative has been proposed under the Electricity Reforms Bill which will be presented to Parliament this week after Cabinet approval.

Speaking to the Daily News, Power and Energy Minister Karu Jayasuriya said the Bill aims to make the electricity industry profitable and efficient for ensuring a continuous supply of electricity.

"This is in no way a step towards the privatisation of the electricity sector. The CEB is an asset to our nation and the Government will always stand by the people and protect it. Through this legislation we hope to make this bankrupt institution profitable within the next few months by providing a better service for a competitive but reasonable price," he said.

The new legislation seeks to separate the functions of the Ceylon Electricity Board (CEB) and the Lanka Electricity Company (LECO) and allocate these functions to new companies to meet the rising demand for electricity.

Minister Jayasuriya assured that there will not be retrenchment of employees along with the separation of the CEB. The Government's dream was to increase the supply of electricity from 59 per cent of the households to 80 per cent without making it a luxury accessible only to the rich. "Today, the CEB is a burden to the country and we want to make it an income generating venture very soon," he added.

The administration and implementation of the Electricity Reform Act will be vested in the new Public Utilities Commission. It will act as the economic, technical and safety regulator for the electricity industry in Sri Lanka.

Under the Reorganisation of the electricity industry which has been included in the Fifth Chapter of the Bill, it is proposed to allocate hydro and thermal electric generation, transmission and power procurement, distribution and supply and other activities of the CEB and LECO such as the management of pensions and ancillary services to separate companies.

Accordingly, one company will take over CEB and LECO functions relating to hydroelectric and thermal generation, another will deal with transmission and bulk procurement and three or more will be involved in distribution.

The successor companies will be given an opportunity to operate with maximum independence, efficiency and economy whilst ensuring security of the electricity supply to consumers.

Upon approval by the Cabinet, Minister Jayasuriya will, in consultation with the Finance Minister, direct the Registrar of Companies to incorporate the companies.

The Provisions of the Conversion of Public Corporation or Government owned Business Undertakings into Public Companies Act, No 23 of 1987 will apply to every successor company and the Reorganisation also allows CEB and LECO employees to join the new companies where the Provident Fund and a contributory pension scheme will be established. Those who are not offered employment in any successor company are entitled to continue working for the CEB or LECO.

The directors of the new companies will be appointed by the Minister on the recommendation of a Monitoring and Advisory Committee which will include the Deputy Secretary to the Treasury, Additional Secretary to the Ministry and representatives of the Ceylon Chamber of Commerce, Institute of Chartered Accountants and the Institute of Engineers. Up to ten per cent of the shares of each successor company will be distributed among its employees.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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