The Ministry of Power and Energy recently revealed that the Ceylon Electricity Board (CEB), Sri Lanka’s debt strapped utility provider’s management to implement a mechanism to recover loan and interest amounts from employees who have taken loans amounting to Rs. 12 billion, part of which the CEB has been paying for decades. 

The move, which comes as Sri Lanka attempts to restructure its bloated and wasteful public sector, should be commended. “Data provided by the CEB finance division shows that financial facilities extended to CEB employees amounts to about Rs. 12 billion and that 2/3rds of the employees’ loan interest component is paid by the CEB,” Wijesekera said on X. “The interest paid by the CEB on behalf of its employees is recovered from the consumer tariffs,” he added. Minister Wijesekera has directed the CEB management to implement a mechanism to recover the loan and interest amounts from the beneficiaries of the loans “and not to pass it to the electricity consumers”. He has also instructed them to report on any services that can be outsourced in the future to be more efficient and reduce cost.

The fact that CEB linked trade unions who have long resisted introduction of renewable power to the national energy balance, resisted reforms, fostered an ecosystem where Sri Lanka has had to depend on fossil fuels, and has caused crippling trade union action in the past, conveniently forgot to mention how they were benefiting from such loans, which are part repaid by the State-owned enterprises is a clear indication, that they too, like many politicians were happy to benefit from a system of governance that was pushing Sri Lanka to bankruptcy, while claiming to represent national interest. This type of self service, before national service, is indicative of why many believe that Sri Lanka’s governance owes are not only due to the politicians and the culture of politics. It is also because the political self-serving culture has over the years been embedded in the public services, with CEB, the Ceylon Petroleum Corporation (CPC), and Sri Lanka Railways being examples of how State service personnel use the State monopolies to their benefit.       

Last year, the Government’s stated justification for postponing long delayed local government elections was the inability to provide Rs. 10 billion for the poll.  Timely elections are a hallmark of a democratic nation, and Sri Lanka, apart from a few instances, has held elections on time as a practice. Further, critical public services such as medical tests and pharmaceuticals are in short supply, placing the health and wellbeing of a broad cross section of Sri Lanka’s at risk. Sri Lanka did not have funds to buy medicine. It is understandable that many citizens are livid regarding the revelation. A vast majority of Sri Lanka’s struggle to repay their loans, leases and during the Covid-19 pandemic, and ensuing economic crisis, were disproportionality affected due to what they owed, and the unchanged repayment cycles. Meanwhile, the CEB continued to increase electricity tariff, stating that they are running at a loss. So, the question civil society groups and the consumers ask the CEB and the regulator PUCSL is well grounded; what part of the tariff is used to service CEB’s debt and reoccurring expenditure such as paying off part of its employees loans? The CEB and the PUCSL must answer.

Further, if the Government is serious about cutting expenditure and restructuring the State institution and enterprises, will the Government be bold enough to withdraw the 2005 Public Administration Circular which was issued by the Ministry of Home Affairs which details the benefits some State employees get to obtain property loans and personal loans? If Sri Lanka can increase taxes to plug the State income expenditure gap, why remove the instruments which cause the gap to be so wide? It remains to be seen if the Government, in an election year, will have the political will to streamline such expenses for the State, to allow the status quo to continue. The State must at some stage trim the fat without burdening the public.