Power to the people

PRESIDENT Mahinda Rajapaksa’s May Day boon will be met with much sighs, but it could be short-lived relief unless the Government makes strong inroads into reducing losses and mismanagement at the Ceylon Electricity Board (CEB).

The announcement made on Wednesday will leave a bitter taste in the mouth of Power Minister Pavithra Wanniarachchi who staunchly defended the tariff increase despite overwhelming criticism from both within and outside the Government. Critics would point out that the very numbers on paper would have shown that the increases were a nonstarter. Be that as it may, the relief promised by Rajapaksa still has to be one that can be afforded by the CEB.

The hike will not achieve the desired objective of CEB meeting debts of more than Rs. 30 billion to the Ceylon Petroleum Corporation (CPC). Instead the additional revenue will only be used to meet the extra expense incurred by increased furnace oil prices from 1 April. This means that the CEB would fall afoul of the Petroleum Ministry, which has now decided that it will stop credit to State institutions.

Among the State enterprises are SriLankan Airlines, which owes Rs. 27.4 billion to the CPC. Others which have run up heavy bills include the Sri Lanka Navy Rs. 6.7 billion, Sri Lanka Railways Rs. 5.3 billion, Army Rs. 4.1 billion and the Air Force Rs. 1.8 billion.

It is therefore worth considering why such massive amounts were allowed to be racked up by institutions and whether they can be rationalised to provide maximum benefit to the consumer. In this vein, it can be pointed out that the Rs. 12.7 billion in arrears accumulated by the military would be one place to start. Given the whopping Budget allocation for the defence sector, which is larger than any other, it would seem that it is in the best position to repay its debts to the CPC so that it in turn can concentrate on areas more central to the economic development of the country at large.

Moreover, the price allocations for State institutions and religious organisations remain low, while more pain is being heaped on consumers, which is blatantly unfair. Equitable distribution of CEB’s debt burden is one aspect that is usually paid little attention, but underscores the unfair process employed time and again by the Government and other stakeholders. Even though price increases are enthusiastically implemented, there is much less enthusiasm on restructuring the CPC and CEB, reducing massive corruption and wastage, holding officials accountable, depoliticising and improving overall governance.

In this context it is imperative that the Public Utilities Commission of Sri Lanka (PUCSL) sticks to its reform proposals along the agreed timeframe. There also needs to be broader consultation of energy generation and distribution options that need to be consistent and not trotted out only when a tariff increase is in the offing. The PUCSL needs to be made more independent as was evidenced by the barrage of accusations it faced for being able to implement any recommendations or changes.

The adjustment of the tariff by the President under public pressure is a consequence of arbitrarily undermining set procedure, which was technical and not political and which had room to accommodate public concerns, critics say. Moreover, the President cannot continuously disregard procedure and reverse policies arbitrarily for popularity.