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Friday, 10 May 2013 00:01 - - {{hitsCtrl.values.hits}}
By Ashwin Hemmathagama Our Lobby Correspondent
The main Opposition staged a charged debate in Parliament yesterday over the recent electricity hikes, slamming the Government over a “flawed” tariff structure, the failure of the regulator and massive mismanagement within the Ceylon Electricity Board (CEB).
UNP MP Eran Wickramaratne making a detailed speech highlighted numerous oversights in the management of the CEB that has led to sustained losses exacerbated by little financial accountability resulting in the need to raise electricity prices increased exponentially.
“Electricity prices must be kept affordable and competitive through transparent open bidding processes. The Government has an obligation to ensure that a mafia is not profiting at the expense of the consumer. An uncompetitive electricity tariff will also make Sri Lanka’s manufacturing and services internationally uncompetitive. The recent price increases highlight the fact that corrupt practices and inefficient management contribute to the escalating tariffs as much as unpredictable oil prices in the international markets,” he stressed.
He pointed out that when a comparison is made between countries in South Asia, with the exception of the lowest consumer group of zero to 30 units of consumption, the new tariffs are the highest in South Asia.
Criticism was also levelled on the decision to move away from increasing block tariffs to volume differentiated tariffs, where the consumer pays the tariff of the last consumed unit of electricity for the entire consumption. Wickramaratne insisted that this would not lead to the anticipated gains when compared with the administrative costs.
“Dr. Tilak Siyambalapitiya illustrates that if the meter reader turns up in the afternoon instead of the morning and you cross the tariff slab, you may end up paying an increase of Rs.2, 500 on your monthly bill.”
The Public Utilities Commission (PUC) also came under heavy fire for ignoring the 270 submissions by public stakeholders with the UNP tagging it as being politicised and calling for a new set of officials.
“The Auditor General has issued qualified reports in 2007, 2008, 2009 and 2010. The CEB Annual Report has not been tabled in Parliament since 2009. The Audit Committee of the CEB has met only six times in 2011 and 4 times until August 2012. This is unacceptable for a Government institution running losses of Rs. 60 billion in 2012, which is more than twice the subsidy on fertiliser. The Audit Committee’s ineffectiveness is exposed.”
Unfavourable contracts signed with private power producers have also lost the CEB an estimated Rs. 6 billion while mismanagement within its 16 subsidiary companies have also contributed to the institution’s staggering losses, Wickramaratne remarked.
Electricity...
Moving the motion UNP General Secretary Tissa Attanayake described the recent tariff hike as being “unbearable” and an additional burden for the general public which is facing rising inflation as a result of the ever-increasing corruption.
“The highest tariff increase is paid by the lowest users and the lowest is paid by the highest electricity users. This is the nature of this tariff hike. The Government acts as if it is ignorant of the use of electricity for all matters in the country, which includes the general households, schools and hospitals. We would like to know the reasons for the tariff hike, the formula used to calculate the increased price, and the plans Government will use to compensate the poor,” he said.
UNP MP Sajith Premadasa also made his presentations to the House, during which he outlined the impact on small industries.
“This will have an adverse impact on small industries competitiveness. But this is not what is mentioned in the ‘Mahinda Chinthana’ political manifesto. The electricity increase on the small businesses is 9% and the large businesses are enjoying a 5% increase. If you take the domestic increase, the ordinary consumer experiences an increase of 68% to 100% while the rich enjoys an increase of 1% to 8%. If you quantify, the consumers using over 300 units amounts to 1% of the total usage. The price for one to 300 units has been increased by Rs. 5 to Rs. 26 and the consumers above 300 units till 900 are subjected to an increase of Rs. 6. Those who use over 900 units will have a price increase of Rs. 2. The volume difference pricing formula is not used in any other country. In 2008 Supreme Court also held this unsuitable. The Ceylon Electricity Board has gone appeared before the Public Utilities Commission overruling what President pledged. We also need to focus and prepare a national plan on the renewable energy use,” he suggested.
Defending the Government stance, Public Administration and Home Affairs Minister W.D.J. Senewiratne reminded the House of the burden placed on the country due to delayed coal power projects, which have been fast-tracked by the Rajapaksa administration.
“The available solution is to finish the second and the third stages of the Norochcholai, which will add 600MW to the grid. The cheapest source is coal when it comes to power generation. Each unit is produced at Rs. 7.75 at Norochcholai. We are also looking at constructing two additional power plants which will run using LNG. Adding more to it, Government has encouraged the renewable energy use. As a result by 2008 we have established 108 small hydro power plants, nine wind power generators, and two dendro powered plants,” he added.
