Sri Lanka LNG power plant push is outside the law: officials

Sri Lankan President Maithripala Sirisena (L) and Sri Lankan Prime Minister Ranil Wickremasinghe gesture as Sri Lankan Finance Minister Ravi Karunanayake (unseen) presents a supplementary budget to parliament, marking the first economic policy statement of the new government which came to power earlier in the month in Colombo on January 29, 2015. Sri Lanka's new government announced hefty taxes on top companies in a bid to raise revenue, accusing the previous regime of fudging the figures and leaving the economy in a "sad state". AFP PHOTO / Ishara S. KODIKARA (Photo credit should read Ishara S.KODIKARA/AFP/Getty Images)

Oct 07, 2009 (LBO) – Attempts to connect a private liquefied natural gas (LNG) power plant to Sri Lanka’s state-run power utility outside a competitive bidding process is not legal under a new public utility regulatory law, officials said. From this October PUC is issuing licenses to the Ceylon Electricity Board, independent power producers and smaller renewable power plants under the new law.

Industry analysts say ensuring transparent competitive bidding, implementing CEB’s long term generation plan of least cost plants under the regulatory law and reducing political interference in the utility is key to reducing power costs in Sri Lanka.

Sri Lanka’s power sector came under the regulation of the Public Utilities Commission of Sri Lanka (PUC) this April.

Under the regulatory law, all large plants have to face a competitive bidding process and also have to be listed in the long term generation plan of the state-run Ceylon Electricity Board (CEB), which is the only transmission licensee allowed to buy new plants.

LNG plants are not part of the long term generation plan. But the plant has been pushed by “cabinet approval” and even a foundation stone had been laid. A company called Lanka Aloka, complete with tax concessions