Excerpts of the interview:
Q: The government claims there is no option other than increasing the electricity tariff to help the Ceylon Electricity Board (CEB) out of its present crisis. Is this correct?
A: Partly correct and partly not. We have to look at the costs of electricity generation, transmission and distribution. The problem is that this is veritably an integrated monopoly. You have the cost of the CEB as a whole, but the cost structure is not transparent. The cost, which is shown by the CEB should be broken down as costs of generating power and its distribution. There is the revenue side. If you are satisfied that you have done everything to reduce the costs and still you are running at a loss, then there is a reason to increase the rates. I am not convinced they have reduced all the possible costs. Costs can be divided into two areas. During the period 1982-1993, all the power projects – namely the Mahaweli, Randenigala, Rantambe and Victoria, were launched. Except the Kukulegama project, no power project was set up, until 2012 where the Norochcholai, Kerawalapitiya and Kotmale projects were commissioned.
Since power generation measures had not been implemented in keeping with the increasing demand of electricity in the country, power cuts had to be introduced in 2001. Power cuts of eight – 10 hours per day were introduced.
As a precautionary measure, when the UNP came into power in 2001, we introduced private thermal operators system. What I want to emphasize is that the authorities did not take timely decisions to meet the power demand.
The other side of the problem is the cost of power generation. While a hydro power unit costs Rs 3.50, thermal power costs have gone up to Rs 35 per unit, due to high costs of oil. There are allegations that CEB always does not switch on to the least cost options. The present situation is that power generating units are partly private and partly CEB owned. There are openings for corruption as pointed out by some parties.
There should be transparency on power purchases. As explained, some power generating companies are partly private and partly CEB owned. For example, Lanka Transformers (Pvt) Ltd., is one of the major companies supplying power to CEB, which owns 60% shares of the company, while 40% are owned by various other people. But none of their accounts are audited and presented to Parliament. Countless allegations are levelled against Lanka Transformers. The other company is Lanka Coal Ltd., which has the exclusive licence to purchase coal. But Parliament has no authority to look into their accounts.
Former Power and Energy Minister, Patali Champika Ranawaka, wanted to uncover some financing transaction deals of Lanka Coal Ltd., and finally the Chairman of Lanka Coal was removed by the minister. Now that person has come back to the CEB and Minister Champika was removed from that ministry partly due to that issue.
Q: There was a Court decision in 2009 on electricity price hikes. It is pointed out that the present electricity tariff hike violates that Court Order. Can you elaborate on this situation?
A: I heard about that, but I am not fully aware of the Court decision. In this country, I don't think there is any value attached to Court decisions anymore after the former Chief Justice, Dr. Shirani Bandarnayaka was removed, and an adviser to the regime was installed as the Chief Justice, so Higher Courts can do as they please.
Q: The Minister of International Monetary Cooperation and Deputy Minister of Finance and Planning, Dr. Sarath Amunugama, said recently the government cannot supply electricity at subsidized rates to people for tamashas, or to watch TV. Your views in this regard...
A: Dr. Sarath Amunugama, is one person who speaks the truth. There is a truth in this statement, and that is, people must pay for what they use.
The University of Colombo conducted a research recently and found that 33% of the households in Sri Lanka are 'electricity poor' – that is they consume lesser units of power, and 2.4 million households come under that category. The CEB's tariff vision targets this category of power users.
MP Mangala Samaraweera, raised an important point recently. Some government MPs and influential people who are conducting various functions such as car races and sports events do not pay electricity bills. Those events are commercial events and they earn millions, but they do not pay the costs of the electricity they use when they conduct such events. But they should certainly pay. The ministers pay only Rs 2,000 per month for the power they use, Mangala Samaraweera pointed out. Wastages and corruption should be stopped, from the top.
Q: The government organized various functions and tamashas but they do not bear the cost of electricity. Finally, the people have to bear the cost. How can the people avoid this?
A: When car races or cricket matches are being held during peak hours, especially at night, the cost of electricity is very high and these commercial event organizers must pay for the electricity they use, but the fact is they don't. Poor people use less than 60 units. Their requirements can be provided by hydro power plants and coal power plants whose power generating cost is lower than Rs 14 per unit. When powerful lights are used for various functions such as car races, cricket matches and events such as the Deyata Kirula exhibition, expensive power generating units have to be used and the unit cost goes up. The CEB does not look into this aspect. They put all consumers under one category and propose to charge everyone at the same rate. That is very unfair.
Q: The Public Utilities Commission of Sri Lanka (PUCSL), sought the views of the people and various organizations with regard to the increase in the electricity tariff, and finally recommended exactly what the CEB had proposed. People allege that the PUCSL had misled the people? Your views?
A: The PUSCL has let down the public. The many hours that hundreds of people's representatives, consumer groups, engineers and civil society organizations had spent on public consultations were a total waste of time.
The spineless PUCSL had met with the President and compromised its independence by agreeing to an unfair tariff increase on households considered as 'electricity poor,' that is, those who use less than 48 units per month, while increasing the tariffs by a mere 2% on the super rich. It is not a Public Utilities Commission – rather it is a 'political utilities commission.'
Q: The developed world generates electricity from solar, wind and various resources. Why can't Sri Lanka also move in that direction to generate electricity?
A: Generating solar and wind power costs nothing when compared with other resources. But the infrastructure for solar and wind power is costly. Solar and wind panels are very expensive. I believe the cost of infrastructure may come down over time. However solar, wind and LPG power options must be actively pursued.
Q: A series of tariff and price hikes applicable to water, consumer items and bus fares may follow on the heels of the electricity tariff hike. What action will the Opposition take on behalf of the oppressed masses?
A: We have done everything possible to convince PUCSL to refrain from increasing electricity tariffs proposed by CEB. I appeared before the PUCSL and presented a strategy outlining how to overcome the issue without harming the poor people. They did not listen to our proposals or those of academics, engineers and members of civil society. The new electricity tariff formula only serves to penalize the general masses who make up the majority of consumers, and use less than 90 units per month. This formula would benefit only the super rich class, which constitutes 1% of the consumer base. They burn up more than 900 units per month.
The opposition parties, trade unions and civil society must get together and come forward against the unjust and arbitrary decision of the government. As a political party, the UNP has also sought legal advice from prominent lawyers in this regard.
Q: The unprecedented electricity tariff is an indication that there is mismanagement of the economy by the government. Your views?
A: When the UNP came to power in 2001, we decided not to recruit people to the public service due to the Treasury being bankrupt. Today, anyone can understand why the present government decided to increase the electricity tariff so as to hit the poorest segment of society. Today, the Treasury is not strong enough to carry out welfare activities.
The government is responsible for the bankrupt situation. They have devalued the Rupee, which is now Rs 130; it was Rs 109 before the New Year. Furthermore, the people will no longer believe the lies stated by the government that it will increase the per capita income to US $ 4,000.
No doubt, the people will start agitating against the government when they receive the electricity bill next month.
Q: Although Sri Lanka enjoys electricity supply round the clock, the government claims that some countries in the region have power cuts. Is this true?
A: That's not an excuse to increase electricity rates. Sri Lanka is richer than other countries in natural resources with so many rivers and streams, which can be used to generate power. Even at provincial level, there is so much malpractice and corruption that become barriers on the path to development.
India cannot meet the huge electricity demand. So they have power cuts. But Nepal and Bhutan wisely developed their rivers and streams to generate hydro electricity. Even Bhutan, which developed the hydro electricity sector with the assistance of the Asian Development Bank, exports electricity to India.
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