brand logo

Public burdened for admin failures

21 Aug 2022

  • Cost of policy failures, inefficiency, vested interests placed on the public
By Asiri Fernando   Electricity consumers in Sri Lanka will begin paying a higher tariff rate for power usage from this month, shouldering the cost of long-term political inaction and vested interests that brought the island to its knees by weakening its energy security. Through the tariff hike, the electricity consumer will also contribute to lavish bonuses, which the loss-making Ceylon Electricity Board (CEB) continues to pay some of its staff members, as Sri Lanka once again attempts to review the power sector and enact far-reaching reforms, riding on a wave of public support for a ‘system change’. The CEB has long campaigned for an increase in the electricity tariff and it is no secret that the decision to fix it at the previous rate years ago was influenced more by politics than a desire to improve the efficiency of power supply. The State-owned power utility, which has lost the trust of the public today, points to high generation costs as the cause for the need to increase the tariff.   Man-made power crisis   Sri Lanka has been plagued with a weak energy security architecture for decades, which was last year characterised by the then Chairman of the CEB M.C.C. Ferdinando in a letter to the Ministry of Power as a man-made crisis. The power crisis is due to failures by successive governments in incorporating adequate amounts of renewable energy to the national grid and the failure to implement key planned power generation projects over the last two decades. With the current fossil fuel-heavy dependence Sri Lanka has for power generation, the island nation pays exorbitant amounts to import coal, crude oil, and diesel – all of which have soared in price in international markets due to various reasons.  With Sri Lanka embroiled in an unprecedented economic crisis, the need to import fossil fuels for power generation has triggered a high tariff rate, which today the consumer must shoulder. Speaking to The Sunday Morning, energy expert Dr. Tilak Siyambalapitiya blamed changes to long-term power generation plans and the failure to implement them as reasons for the current energy crisis. “The electricity industry works on a 20-year rolling plan. This is what some politicians and members of the public don’t understand. When you disrupt a 20-year plan, the result is that a power plant will not be built. You can get a large diesel generator and supply power; however, you cannot run a national power supply in a sustainable way using diesel power plants,” Siyambalapitiya said. He pointed out that the practice of emergency power purchases, which several governments had resorted to, was a band-aid solution instead of getting the long-term plan right. Such emergency power purchases, which come at a high cost, have been the subject of several investigations, following allegations of corruption involving politicians, the CEB, and ministry officials. “I think this issue began in 1992, when the Trincomalee Power Plant plans were interfered with by some politicians and bureaucrats. Gradually the politicians got used to the ‘game’. The game is, when you need power in a hurry, you look to procure power though emergency power contracts. I think there were some in the Government and perhaps in the CEB who were happy to see this happen,” Dr. Siyambalapitiya opined. He stated that a number of power plants were required to provide ‘firm energy,’ on which renewable energy could have been added, but which had not been established over the last two decades, resulting in Sri Lanka having to rely on Private Power Producers (PPP), who mostly use expensive diesel to generate electricity at a high cost, which is then purchased by the CEB using emergency power purchase agreements.   Vested interests over public interest   Responding to a question on why the consumer should foot the bill for bonuses given to the staff of an inefficient power utility, Opposition Parliamentarian and former member of the Committee on Public Enterprises (COPE) MP Kabir Hashim told The Sunday Morning that the lack of political will to implement proper policies and reform the CEB should not be passed on to the consumer as a cost. “The bottom line is that politicians have not had the guts to criticise the CEB and the trade unions related to it because they thrive on and survive with the help of the unions. Some of the engineers have vested interests too. Those few engineers are linked to private power generation plants who sell the power to the CEB at exorbitant prices. That is why the engineers have never allowed solar power or other renewable energy sources to be incorporated into the supply chain. They have blocked renewable energy. That is why the cost of power generation is high, even with hydro; on average it’s Rs. 58 per unit now,” Hashim charged. Hashim argued that although many power sector trade unions claimed that they represented the interests of the workers, they were only interested in protecting their vested interests, which benefitted a few members. “The union members take high salaries and bonuses when the country is suffering. A few thousand make money and they talk about worker rights and national interests. The taxes of these high earners are also paid by the taxpayer – the Government. They are part of the reason for this crisis and what they do is not justifiable. It is a crime and they should be charged. I think this is what the people want when they call for a system change. They need to be held accountable along with the politicians who have also been linked to these unethical practices,” Hashim argued. He said that institutions such as the CEB had been a drain on the State and the consumer and were in urgent need of well-planned reforms to improve transparency, accountability, and efficiency.   Performance and management   Former Minister of Power, Opposition MP Patali Champika Ranawaka told The Sunday Morning that even if some of the planned power projects had been implemented, the consumer may have had to pay an increased tariff, though not as high as what had been rolled out by the CEB this month with the permission of the regulator, the Public Utilities Commission of Sri Lanka (PUCSL). While acknowledging the delays of successive governments to effectively forecast and prepare for present power demands, Ranawaka pointed out that the coal- and LNG-powered plants which were planned may have invariably become high cost due to the prevailing climate in the energy market today. “Coal has not been as cheap as forecasted, nor is LNG. The market volatility and disruptions to energy sourcing have pushed LNG prices higher as well, so generation costs may have not reduced as planned through the building of coal and LNG plants,” MP Ranawaka said.  He too pointed out that delays in effectively incorporating renewable energy sources, which could have helped ease generation cost over time, had worsened the situation. The former Power Minister also charged that passing on the inefficiencies of the CEB to the consumer via the tariff hike was unreasonable. “A long-standing issue has been that there is no benchmarking in place for the CEB. We need to implement Key Performance Indicators (KPIs) for the power sector. Without it, we can’t gauge their technical efficiency and financial efficiency, which is important to understand the losses they keep making and also ensure efficient management. The CEB has a large staff, numbering in the thousands. Are they being utilised in the best way possible? How efficient are they? To know the answers to these questions, any reforms introduced will need to include KPIs and transparency measures so that the CEB can be held accountable,” Ranawaka stated. Responding to a question on the wastage by the CEB, Dr. Siyambalapitiya stated: “There are many aspects to this issue. If we consider manpower, CEB has more than 22,000 personnel. This is a huge number, because the network is not growing. We completed coverage of Sri Lanka in 2016. When the lines and length are not growing and technology has improved in managing customer inquiries, why should the number of employees grow? It may be difficult to reduce the number, but you must make sure it does not grow.” He also called for the financial separation of the business units of the CEB to improve efficiency and reduce wastage, pointing out that LECO, which had been “unbundled” earlier on had a lower power generation cost and higher income per unit. Attempts to contact the CEB Engineers’ Union and the CEB Workers’ Trade Union for comment failed. 


More News..