Says that current projections put breakeven point in 2014, but pledges to reduce losses in 2011
The Ceylon Electricity Board (CEB) will not be able to meet International Monetary Fund (IMF) stipulations to bring the State-owned facility to breakeven point by the end of 2011 as included in the Stand-by Agreement, says the Power and Energy Minister.
Even though the CEB managed to post a profit of Rs. 2.4 million after nine years, Power and Energy Minister Champika Ranawaka noted that this would be a short term relief and breaking even would be a goal that could be realistically achieved in 2014.
Ranawaka’s statements are in contrast to IMF Review Head Dr. Brian Aitken’s indications at a press conference last week that they are working with the CEB to reach the breakeven target by the end of this year. However, both institutions were conservative of their expectations.
According to Ranawaka, the 2010 numbers are a “temporary win” and the prospect for 2011 more along the lines of posting a loss of Rs. 16 billion. Even though the projected loss for 2010 was Rs. 40 billion, the positive numbers at the end of the year has bolstered confidence.
The Ministry is working to increase efficiency, reduce wastage and expand the national grid in an effort to serve the people and development process better, the Minister insisted. He stressed that no new recruitments have been made since 2002, except on contract basis and that they expect to save twice the amount of Rs. 4.5 billion earned through increased tariffs by increasing worker efficiency.
However, the short term loan burden of CEB is Rs. 161 billion while the long term debt totals Rs. 322 billion.
Ranawaka expressed gratitude to the Treasury for absorbing the increasing oil expenses so that tariffs do not need to be increased and pledged to pay the Ceylon Petroleum Corporation (CPC) fully for oil supplies. However, this money will have to be paid as a long-term loan by the CEB.
“In 2010 CEB sold Rs. 120.5 billion worth electricity but was only able to collect revenue of Rs. 118.1 billion because the cost of street lighting is not paid by either local authorities or the Treasury. This cost has to be borne by us but we do so for the welfare of the people.”
Ranawaka pointed out that the focus of the CEB was to maintain electricity prices while spreading the network to every corner of the country. He insisted that if domestic users were to compare their bills from 2008-2011, they would see that for 90% of users, the amounts charged have remained static.