Sri Lanka amends law to eliminate competitive bidding for energy projects

The move to remove competitive bidding for energy projects has run afoul of the Opposition parties and electricity board trade unions

Sri Lanka amended its electricity legislation to get rid of competitive bidding for energy projects on Thursday. The move invited criticism from the Opposition parties. Even though the trade unions in the state-run Ceylon Electricity Board (CEB) resisted the move strongly, a majority of the MPs voted in its favor for the amendments under the Sri Lanka Electricity Act.

CEB union on Wednesday warned the incumbent government of an indefinite strike to protest the new legislation. The trade union further added that they are against the decision of the government to rope in India's Adani Group to execute renewable energy projects in the island nation, without any competitive bidding prices. The strike action was however suspended after President Gotabaya Rajapaksa decided to meet the union leaders. Rajapaksa also issued an extraordinary gazette, which declared electricity an essential service.

In March 2022, the Adani Group signed an agreement with CEB for two large power projects in the northern province of the island nation. However, the move was strongly condemned and opposed by the main Opposition party Samagi Jana Balawegaya or SJB. SJB also accused Gotabaya Rajapaksa of allowing Adani Group to enter the country through a back door, and thereby disrupting the country's competitive electricity generation system.

Power and Energy Minister Kanchana Wijesekara defended the move saying it was "essential to the quick development" of renewable energy. The minister further added in his tweet that they hope to encourage foreign direct investment. This comes at a time when the country is reeling under the worst economic crisis. Prime Minister Ranil Wickremesinghe also welcomed the adoption of the amendment bill.