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Friday March 1st, 2024

Will pass on CEB gains to consumers: Sri Lanka minister

ECONOMYNEXT – Minister of power and energy Kanchana Wijesekera said that if the Ceylon Electricity Board makes any operating profit by December due to rains, those gains will be passed onto consumers in April.

Wijesekera said the CEB is currently facing a financial deficit of Rs 12 billion. However, given the prevailing rain conditions, it is anticipated that there may be a positive turn in the financial outlook.

“If operational profits are realized by December, as determined through financial calculations, a concession will be extended to consumers in April,” Wijesekera said at a press briefing at the Presidential Media Centre on Saturday (25).

“Furthermore, the government has issued instructions to the relevant departments to reassess the fee for reconnection. It is anticipated that the current reconnection fee, set at Rs 3,000, will be revised to a range between Rs 1,000 and Rs 2,000.”

The Cabinet granted approval last Monday for the CEB restructuring. Steps are underway to gazette and submit the new Electricity Act to Parliament within the next two weeks.

The Minister said there were misconceptions raised in Parliament concerning the configuration of electricity generation, transmission and distribution.

“The proposal entails restructuring power generation into four distinct companies. The entire hydroelectricity sector will remain under government control. The management of power plants situated in close proximity to Mahaweli, Lakshapana and Samanalaweva will also be retained by the government.”

As part of this restructuring initiative, it has been decided to consolidate the Norochcholai power plant under a single company, while all other power plants will be grouped together under a separate entity, Wijesekera said.

The proposal includes the establishment of a distinct company dedicated to transmission work, with the main control system under government ownership.

“The restructuring of the electricity board is anticipated improvements in efficiency, quality and reduction of wastage. The initiative takes into consideration existing laws and regulations in various countries worldwide.

“The implementation of the restructuring plan is slated to follow the submission of the draft, incorporating feedback and suggestions from various stakeholders, including experts of the relevant field.

Wijesekera said the country had suffered the loss of numerous power plants as a consequence of delayed policy decisions and the prolonged non-implementation of previously made decisions.

“The proposed construction of the Sampur power plant faced a significant setback when the decision was made in 2016 to forego its construction. Originally slated for completion in 2020, the non-realization of the Sampur plant has resulted in an annual loss of Rs 95 billion.”

He added that there are plans to sign agreements for five more projects before the end of the current year.

“The forthcoming agreements include collaborations with the Adani wind power plant in Mannar, the construction of a solar panel power plant in Siambalanduwa, the Hambantota solar panel project, also projects proposed for Batticaloa and Punakari.” (Colombo/Nov25/2023)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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