• Repeated request for tariff hike goes unanswered
• Rs. 50 b monthly turnover insufficient: CEB
• CEB redirects income from one State bank to another

The State-run Ceylon Electricity Board (CEB) is facing challenges in financing coal payments due to a drop in income, The Sunday Morning reliably learns.

It is learnt that, during a recent meeting with Power and Energy Minister Kanchana Wijesekera, the CEB had repeatedly requested the Minister to approve a tariff increase, citing the financial strain faced by the institution.

According to CEB sources, the drop in income is a consequence of deploying high-cost diesel-fired power plants and the reduced tariff range that was approved by the Public Utilities Commission of Sri Lanka (PUCSL).

The Sunday Morning earlier reported that the regulator had not conceded to provide the full range of tariff increments the CEB had sought during the last hike.

However, the Minister has not made a final decision on the tariff revision yet, despite numerous appeals from the CEB.

According to sources, one of the major financial burdens for the CEB is the monthly expense of Rs. 20 billion for coal. Further, the CEB remains straddled with arrears, which the utility provider is struggling to collect.

As an immediate measure to ensure continued funding for coal purchases, it is learnt that the CEB has redirected its income which was previously under the People’s Bank to the Bank of Ceylon (BOC), to secure a monthly top-up loan of Rs. 20 billion, ensuring uninterrupted coal supplies.

However, despite these efforts, The Sunday Morning learns that the CEB is struggling to secure finances to pay its solar suppliers and to purchase the required diesel and furnace oil to run the power plants.

When contacted, CEB Chairman Nalinda Illangakoon said that they had formally written to the PUCSL, requesting approval to amend the current tariff structure.

“We have around Rs. 50 billion in monthly turnover, but that is insufficient to cover expenses, including coal. We did receive some funding from the BOC. We have to source funds to repay that monthly. Nonetheless, we maintain our accounts at the People’s Bank,” he added.

He also pointed out that due to the sudden tariff revision imposed by the PUCSL, the board would see a shortfall of nearly Rs. 33 billion from its annual target.

However, Lanka Coal Company (LCC) Chairman Shehan Sumanasekara confirmed that three coal shipments had already arrived in the country and other shipments were also pending.

Sumanasekara stated that the long-term coal tender had not been finalised yet.