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 Post subject: Rise and Fall of Ceylon Electricity Board (CEB)
 Post Posted: Mon Jul 25, 2005 9:46 pm 
Shock treatment and extravagance at CEB

Sunday Leader
11th February 2001
By Frederica Jansz


AT least thirty vehicles belonging to the Ceylon Electricity Board (CEB) were released to the Ministry of Irrigation and Power on the orders of CEB Chairman Arjun Deraniyagala, for the use of government politicos at the last general election in October 2000.

(see box for details)

The Deputy Minister for Irrigation and PA candidate Bandula Basnayake was given two luxury vehicles. A Toyota Prado and Toyota Land Cruiser jeep. The Deputy Minister for Samurdhi, Youth Affairs and Sports Piyasena Gamage, also a PA candidate, received a Toyota Prado jeep. The PA candidate for Monaragala District Jayasundara Wijekoon was handed two vehicles. A Toyota Prado jeep and Toyota Land Cruiser. H. T. Dayananda, Special Coordinating Officer in the Ministry of Irrigation and Power was also on the orders of Arjun Deraniyagala, lent a Toyota Prado jeep. S. A. Premaratne a private lawyer from Piliyandala was given a Toyota Land Cruiser jeep belonging to the CEB. Chairman of the Energy Conservation Fund, Ministry of Irrigation and Power, W. Rajakaruna was the recipient of a Mitsubishi L200 double cab. The Deputy Minister of Industrial Development and PA candidate for Gampaha District Athula Nimalsiri Jayasinghe took a Toyota Land Cruiser jeep. Felix Perera, deputy minister of Power and PA candidate for Gampaha District was delivered several vehicles including four double cabs.

This revelation comes amidst other electrifying allegations that the CEB Chairman is guilty of massive misappropriation of funds and in effect has totally mismanaged the electricity board.

As highlighted in The Sunday Leader last week, in addition to a 45 million rupee circuit bungalow being built at Samanalawewa for the Chairman, Arjun Deraniyagala, millions of rupees has been mismanaged at the CEB. So much so, that the CEB is on the verge of a financial crash if quick measures are not enacted to save the bankrupt, politically riddled, bureaucratic institution.

Last year, President Chandrika Kumaratunga angrily reprimanded the ministry of power and irrigation for violating tender procedure and importing a 1.5 billion rupee power generation plant which arrived at the Colombo Port early February 2000. The plant was imported by the Ministry of Irrigation violating government procedure and without seeking the approval of the cabinet of ministers.

Exactly one year ago, the president, referring to the import of this power plant, in a hard hitting cabinet memorandum on February 14, 2000, found fault with the Ministry of Irrigation and Power. The President in her capacity as Minister of Finance said, "Even though, I understand the gravity of the power situation, I consider this motion by the Ministry of Irrigation and Power highly irregular."

The Ministry of Power and Irrigation entered into this transaction and signed for the import of this power generation plant without cabinet approval a few days before the presidential election in 1999. No tender was called. President Kumaratunga before cabinet on February 14, 2000, stated, "I also express my grave concern that without looking at other options and without intimation to the power committee nor the cabinet of ministers, the CEB had entered into an agreement to install 58 mega watt of short term generating capacity through a company named Aggriekko and a further 20 mega watt by Lakdhanavi involving a financial outlay in excess of Rs. 1500 million.

It is pertinent to remind our readers that The Sunday Leader last week pointed out that the CEB is at present paying Aggriekko, (the same Dutch owned and managed company referred to in the president's memorandum,) ninety five thousand sterling pounds (eleven million rupees) as weekly rental for the use of the generators. This payment is made after the CEB has supplied the fuel, and other lubricants for the running of these machines.

The CEB is also paying 'Aggriekko' Rs. 12.50 per unit of electricity generated from the emergency generators. The CEB in turn is forced to sell electricity to the consumers at Rs. 4.60 per unit. The domestic sector is even less and sold at Rs. 3 per unit. The domestic sector accounts for one third of the CEB consumer sector.

In this context, taking into account the millions of units bought by the CEB and the payments made to most of these private generators they are in the red for approximately over rupees one thousand two hundred million every month and the figures are growing.

President Kumaratunga has continued in her memo stating, "Nevertheless, in view of the fact that the CEB had already entered into a contractual agreement with Aggriekko, and the power plant has arrived in the Port, despite having violated procedure, I directed the Treasury to grant clearance to install this plant. However I directed that any agreement entered into with Lakdhanavi, a majority owned subsidiary of CEB should be cancelled forthwith."

Arjun Deraniyagala, Chairman, CEB, at the time when asked about this transaction dismissed the suggestion that the transaction is irregular saying, "if we wait to observe all government tender requirements this country will be in darkness."

While consumers in stoic silence accepted that the CEB is once more forced to raise electricity tariffs by a further 25 percent, Arjun Deraniyagala last week appealed to users of air conditioners to not use their cooling systems until the water levels in the hydro dams had risen.Emergency regulations were also introduced

The fact of the matter is that the present crisis situation with the CEB is not because the water levels in the catchment areas are down. This is a situation which had already been predicted by the Generation and Planning unit of the CEB spanning a 15 year period. The plan was published in 1996.

This plan states that in order to meet the country's present demand of 8 to 10 percent every year, two combined cycle power plants at Kelanitissa were to be in operation by the year 2000. This type of integrated plant is a combination of gas and steam turbine. It serves a dual purpose and is much more efficient than either of these technologies being used separately.

One turbine is being built by the private sector from which the CEB will purchase power on a long term contract. The plant will operate in a similar manner to the 51 mega watt plant at Sapugaskanda, which is owned and run by Asia Power Limited and also the 60 mega watt barge mounted plant situated at the Colombo Harbour. This plant is run by Colombo Power Limited.

In February 2000, KHD/Asia Power made a proposal to the BOI for a 20 Mega Watt extension to the existing power station at Sapugaskanda. It is curious to note that while Asia Power's agreement is with the CEB, why they made a proposal to the BOI. Despite the CEB finding that this proposal is not technically feasible the president who serves as minister of finance submitted and obtained approval for a cabinet memorandum recommending this extension even without the knowledge of the minister of power.

It is this kind of bad administration and political interference that has resulted in the consumers today being asked to pay a price for the mis-dealings that have been going on at the CEB.

Meanwhile, the much delayed two combined cycles power plants are at present under construction at Kelanitissa. One is being built inside the existing power station while the other is being constructed next door. The privately run plant is being constructed by AES Corporation and will have a power generation capacity of 150 mega watts. The CEB will purchase power on a long term contract for 15 or 20 years form this plant. The other 150 mega watt plant has been undertaken by the CEB and is to be constructed with Japanese aid by a Japanese company. The final estimated cost of this plant is 850 billion rupees.

In this instance too, tender procedure was violated. The tender was valued at over 9 billion rupees for construction only and awarded to a Japanese firm by the CEB. However the bidder received 20 percent to begin construction instead of the stipulated 10% in the contractual agreement approved by a Cabinet Appointed Tender Board. The twenty percent draw-down payment was made by the CEB to begin work on the combined cycle power plant project at Kelanitissa. This time around the Ministry of Power & Energy has lodged a complaint with the government Treasury, stating that tender stipulations have been violated and a fraud committed. A top man at the CEB pointed out that it is this kind of fraudulent deal, that has sunk the CEB into depths in which it cannot swim let alone float.

Dr. Susantha Perera, President for the CEB Engineers Union pointed out that at the end of the day, the buck is always being passed between politicians and the institutions top management. Both are quick to accuse each other of incompetence and throw accusations as to who is guilty for the CEB's failure in being able to deliver and serve the nation's needs with integrity. The consumer meanwhile pays for these haphazard decisions and unscruplous wheeler-deals.

The hydro capacity in the country is exhausted. Except for hydro power projects at Upper Kotmale and Kukule Ganga it is no longer economically viable to develop more hydro potential.

Dr. Perera maintained that this is why plans were made to meet the country's growing demand for electricity at the lowest possible cost.


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 Post subject: Mismanagement of Ceylon Electricity Board (CEB)
 Post Posted: Mon Jul 25, 2005 10:25 pm 
Threat of blackouts as demand for coal power mounts

By Frederica Jansz
Sunday Leader
04th February 2001


As the nation staggers under a 25 percent increase in electricity tariffs, The Sunday Leader found that the reasons for the raise for consumers is due to massive fraud and political interference at the Ceylon Electricity Board. Furthermore, while consumers will wilt and feel like 'March Hares' when paying their electricity bill two months hence, the chairman of the CEB will relax at a holiday bungalow built to the tune of 45 million rupees.

Our investigation learned that a Herculean crisis is brewing at the CEB as it faces bankruptcy carrying an overdraft at the Peoples Bank of over rupees four thousand million. A recent budgetary report by the Finance Manager of the CEB points out that by the end of this year the CEB will be in debt to the colossal sum of Rs. 18 billion.

The recently released CEB budget report for 2001 states that in December 2000 the CEB had a financial deficit of 4,070 million rupees. According to the report this amount will rise to Rs. 18,383 million (18 billion) by the end of this year.

The reasons for the near crash of the CEB are varied. Disgusted employees who are forced to remain anonymous as they may suffer harassment if identified say that a terrific lack of commitment by top managers, huge misappropriation of funds and mismanagement of the entire CEB has resulted in this sorry situation.

For example, a tender valued at over 9 billion rupees and awarded to a Japanese firm by the CEB, received 20 percent to begin construction instead of the stipulated 10% in the contractual agreement approved by a Cabinet Appointed Tender Board. The twenty percent draw-down payment was made by the CEB to begin work on the gas turbine project at Kelanitissa. The Ministry of Power and Energy has already lodged a complaint with the government Treasury, stating that tender stipulations have been violated and a fraud committed. A top man at the CEB pointed out that it is this kind of fraudulent deal that has sunk the CEB into depths in which it cannot swim let alone float.

In 1999 alone the CEB spent 3,360 million rupees on thermal power generation. In the same year the CEB also spent 2,400 million on purchasing power from Independent Power Producers, (IPPs).

In the year 2000 the CEB spent 8,822 million rupees for the purchase of fuel alone. This fuel is also distributed by the CEB to private emergency generators in addition to paying a weekly rental of eleven million rupees for the use of the generators.

Top officials at the CEB told The Sunday Leader that if tariff rates are not increased by 50 percent later this year the CEB will not be able to meet its massive deficit. The present 25 percent surcharge is minimal they asserted, adding that further increases are a must in order to lift the CEB out of its present disaster.

For the last one year the CEB has been paying a Dutch owned firm -- Aggreko -- £95,000 (ninety five thousand sterling pounds) per week (over eleven million rupees every week) as rental for the use of emergency generators. This payment is made after the CEB has supplied the fuel, and other lubricants for the running of these machines.

The CEB is also paying 'Aggreko' Rs. 12.50 per unit of electricity generated from the emergency generators. The CEB in turn has been forced to sell electricity to consumers at Rs. 4.60 per unit. The domestic sector is even less and sold at Rs. 3 per unit. The domestic sector accounts for one third of the CEB consumer sector. (These rates were before the tariff increase was approved by the State).

In this context, taking into account the millions of units bought by the CEB and the payments made to most of these private generators, they are in the red for approximately over rupees one thousand two hundred million every month and the figures are growing. This does not include the 40 additional megawatts negotiated by the CEB last week, which they are buying to meet the present power crisis.

When Arjun Deraniyagala took over as Chairman of the CEB in 1996 the CEB had over Rs. 4 billion in excess cash in the bank. At the end of 1999 there was a little over Rs. 3 billion in excess cash. Two years later, by the year 2001, the CEB is in debt to the Peoples Bank for some four thousand million rupees and the figure is sky rocketing.

Amidst this backdrop, The Sunday Leader found that the CEB has spent some 45 million rupees on the construction of a holiday bungalow at Samanalawewa to enable the chairman and his family to take their regular sojourns. (see box).

Having said that, not all the bad decisions are the incumbent chairman's only. A board paper maintains that government decisions taken against the interest of the CEB have also resulted in enforcing far greater liabilities on the CEB forcing the state institution into a state of bankruptcy.

For instance, in May 1999 members representing the CEB disagreed with the project committee on the construction of a medium term power plant at Anuradhapura and Matara. But despite the CEB's disagreement for varied reasons, the Cabinet Appointed Negotiating Committee approved the selection of a bidder who the CEB disapproved of and who finally enforced greater liabilities to the CEB than those envisaged by the bidding documents.

In February 2000, KHD/Asia Power made a proposal to the BOI for a 20 MW extension to the existing power station at Sapugaskanda. It is curious to note that while Asia Power's agreement is with the CEB, why they made a proposal to the BOI. Despite the CEB finding that this proposal is not technically feasible, the president who serves as minister of finance submitted and obtained approval for a cabinet memorandum recommending this extension even without the knowledge of the minister of power.

It is this kind of bad administration and political interference that has resulted in the consumers today being asked to pay a price for the mis-dealings that have been going on at the CEB. Poor public relations and a massive lack of commitment both political and managerial has resulted in the CEB not being successful in pushing forward a coal power plant project which is deemed absolutely essential for the country. In fact the former Chief Engineer Planning, CEB, Dr. Tilak Siyambalapitiya pointed out that if a coal power plant is not in place by the year 2005, the CEB will crash.

Needless to say, if the CEB does crash, it will bring down with it not only the government, but, the entire nation not to mention an already staggering economy. The stark and frightening reality right now is that the CEB is teetering dangerously on a red line that cannot be brushed aside or ignored.

If coal is not used as an alternative to fuel electricity plants, Dr. Siyambalapitiya has predicted that the price of electricity per unit will cost Rs. 9 three years from now, plus with the depreciation of the rupee, the cost per unit will double for the consumer.

Dr. Susantha Perera, President of the CEB Engineers Union, is disillusioned and disgusted. He said that a lack of direction and planning both political and managerial, to ensure the coal power plant was built has resulted in this present crisis.

The latest budget report presented by the Finance Manager of the CEB, Corali de Saram has predicted that the CEB will, by the end of this year, end up with a Rs. 18 billion deficit. Informed sources within the CEB said that Ms. de Saram handed in her resignation soon after this report was presented to the board at the CEB.

Ms. de Saram when contacted by The Sunday Leader however said that she was leaving to better her prospects. Ms. de Saram in fact, is the third finance manager to be employed by the CEB within a period of two years. Similar to her two predecessors Ms. de Saram has hardly lasted a year in the politically riddled institution, steeped in bribery and corruption. Arjun Deraniyagala, Chairman, CEB, denied reports that Ms. de Saram was resigning as a result of the present financial crisis the CEB is facing. "She is merely bettering her career prospects and has secured a better posting," he said.

Since the government has refused to allow the CEB to initiate one-hour daily power cuts for a period of one to two months, the CEB pays Rs. 1.2 billion every month to private generators to avoid a one hour power cut every night. This figure too is growing.

Amidst this pathetic backdrop, concerns have been raised stating the country's hydro power resources can no longer meet the growing needs of a nation for electricity, and the country's Ceylon Electricity Board including top engineers insist that coal power is a must for this nation.

Nowhere in the world it is argued, is oil used to such a great extent as in Sri Lanka to generate electricity. Hence, the recent explanation for proposing to raise the tariff on electricity as world prices in fuel also increased by leaps and bounds.

Total lethargy and the political will to meet this crisis has resulted in delaying installing a coal power plant that is now obviously essential to negate the present crisis. In fact the Japanese government has shown great interest in funding the construction of such a plant and had already released some 800 million rupees as a soft loan for the CEB to conduct a feasibility study on the installation of a coal power project.

All this has now come to nought, as the president bowed down to the wishes of Bishop Frank Marcus Fernando, the all powerful religious dignitary in Chilaw and refused to allow the plant to be constructed.

Engineers at the CEB say that the electricity demand in this country grows at the rate of some 8 percent annually. Only 56 percent of the country's households have electricity. Dr. Tilak Siyambalapitiya, asserts that Sri Lanka requires 1200 Megawatts of new electricity generating capacity available over the next ten years.

He added that coal is the cheapest form of fuel that can be used to generate electricity. Diesel at present costs Rs.24.50 per litre. This same quality diesel is needed for the gas turbines and is a very expensive commodity to use to power the generators. Coal in comparison can be bought for only about Rs. 4.50.

An almighty row blew up when the CEB decided to install a coal power plant at Norochcholai. Backed by environmentalists and almost an entire fishing community, Bishop Dr. Frank Marcus Fernando, lobbied President Chandrika Bandaranaike Kumaratunga hard, to stop the building of the power plant. And stop it, she did, weeks before the presidential election in 1999, much to the chagrin of the Chairman of the CEB, Arjun Deraniyagala and his deputies D. G. D. C. Wijeratne and Shavindranath Fernando.

The CEB hierarchy and engineers are in fact furious with the bishop and the president's decision which they maintain has held the entire nation to ransom as a demand for a coal power plant lies dormant.

According to top engineers including Dr. Tilak Siyambalapitiya, the country has only a few more hydroelectric power plants to build. Solar electricity, wind power and small hydroelectric plants cannot, he says, give us the large new capacity the country requires. For example, he explained that Denmark is a country, which obtains the highest portion of electricity from wind power. They have achieved only a 2 percent contribution from wind, while they operate 5000 Megawatts of coal-fired power plants.

The country in this context is left with only two options. Either to develop more oil burning power plants or build coal fired power plants. Both oil and coal have to be imported. Coal-fired power plants can generate electricity at least one rupee cheaper per unit, than oil-fired ones. Furthermore, coal-fired power plants are reliable, last longer and used mostly for base load operation, which is needed in the country right now.

Dr. Siyamabalapitiya maintains that presently 30 percent of our electricity is supplied from oil burning power plants. In 1999, the average cost of oil to generate one unit of electricity was Rs. 2.40 excluding taxes. If coal is used instead, this can be reduced to Rs. 1.60 by the year 2004, and further to Rs. 1.40 by the year 2009. If coal power is used to generate over 55 percent of the country's electricity, by 2009, this benefit will be directly felt by the electricity consumers. Furthermore, the price of coal does not fluctuate in the world market as oil does.

In fact, experts have pointed out that delaying to build this coal power plant by just one day, will cost the country at least Rs. 4 million extra for alternative forms of electricity generation. Dr. Siyambalapitiya has issued repeated warnings that this delay is bringing us dangerously closer to the next major power crisis this nation will be forced to experience. "In order to avoid the next power crisis in 2004, decisions have to be taken now," he said, adding, it takes five years to build the power plant. Electrification, he pointed out is the driving force behind the economic successes of all major industrialised countries. They continue to build coal power plants even today.

Information provided by both the CEB staff, Shavindranath Fernando, Deputy General Manager CEB and Dr. Tilak Siyambalapitiya say that coal power provides for over 40 percent of the world's electricity needs. All developed countries such as the USA, UK, Germany, Australia, Japan and Canada have large coal power plants. Developing countries like India, China, Malaysia, Indonesia, Thailand and the Philippines also have large coal power plants and are building more.

Both economic and technical studies on this issue have found that Sri Lanka needs 900 Megawatts of coal power by the year 2010, and a further 900 Megawatts by the year 2017. By the year 2004, coal power should provide about 20 percent of our electricity needs, which will rise to about 45 percent by 2011.

Shavindranath Fernando pointed out that Sri Lanka needs a good 'fuel mix' in electricity generation. He says it is imperative that our reliance on oil is reduced and by adding coal to the country's fuel mix, it will help stabilise fuel supply for electricity generation. He says this way the cost of electricity will also be lower. Sri Lanka he says will then have electricity at a competitive price to drive its next phase of social, commercial and industrial development.

Although a feasibility study and an engineering design for a coal power plant was done for Trincomalee in the 1980s it was later abandoned due to security constraints. A site at Mawella in the South suffered the same fate as some 200 families needed to be re-located and the project was met with stiff resistance by the residents of the area.

Dr. Siyambalapitiya maintains that Sri Lanka needs not one but at least five coal-fired power plants. He says that the criterion at present is not to shift the identified site at Norochcholai but to find more sites for more coal power plants elsewhere too. He explained that extensive studies at locations between Mundal and Thalawila, conducted over 1994-98 by teams of local and foreign experts have confirmed that the most feasible site is west of the village Panniaidi. The site location is now commonly known as Norochcholai, which is the village to the north of the site. The CEB has prepared plans to cover every aspect of the project, including social, environmental and technical issues.

The Sunday Leader is not going to dwell on the pros and cons of this project at Norochcholai as it is now a subject much written about. To put the issue in a nutshell, some 300 acres of land at Norochcholai is required for the power plant and buffer zone. The site is 11 kilometres away from St. Anne's Shrine at Thalawila. Some 54 families living in the 300 acre plot need to be re-settled. Each family will be provided with a permanent house on a half acre lot, and a further 1 1/2 acres will be provided for agriculture.

The power plant has already moved through the process of Environmental Impact Assessment. All concerned authorities and institutions have granted the environmental clearance to the project.

One senior engineer at the CEB noted that it almost appears as if the top management at the CEB are waiting for an emergency situation to develop to perhaps push forward a proposal, or a solution to the crisis which will soon boil over into a catastrophic situation.

***********************************************************

Money for relaxation

A 45 million-rupee holiday bungalow (above) has been constructed on the orders of CEB Chairman Arjun Deraniyagala at Samanalawewa. The Japanese firm Kumagai-Hazama-Kajima have jointly constructed the bungalow for the chairman, CEB to relax when he needs a holiday.

The money for the construction was released by the Japanese as a government-to-government loan. Kumagai-Hazama -Kajima were initially handed a contract to conduct remedial work on the reservoir and are in the process of wet blanketing the Samanalawewa reservoir which serves as a hydro electric project.

Ashley Ratnavibushana was the chief architect who designed this holiday home and was paid a fee of Rs. 2 million for his design only.

Upto March 1999 the CEB had spent Rs. 34,097,902.30 million as total cost on the new house. In addition, the Japanese firms were paid over 13 million yen for their role in helping construct the luxury bungalow.


"They can have it in the west coast"

Dr Frank Marcus Fernando, Bishop of Chilaw, firmly reiterated that while in principle he is not against the installation of coal power plants in Sri Lanka, it is the present site chosen at Norochcholai, which he strongly disapproves of.

Citing some chief concerns regarding the present site, the bishop said that security concerns was a main reason. He said St. Anne's shrine located at Thalawila a mere 9 kilometres away from the site may suffer sea erosion, while pilgrims to the shrine too could be affected, due to heavy security in the area in the event the project was implemented. The bishop also said that a 4.2 kilometre jetty would face serious threats of LTTE attacks.

" I am not against a coal power plant if it can be located elsewhere. Not just a few miles away from Norochcholai, but in another district more suitable for such a plant," he said.

Asked if he would object to the project being moved anywhere along the west coast, Bishop Fernando answered in the negative. "I too must be logical," he said, adding that he would not object to the plant being shifted elsewhere along the western coastline. The Bishop maintained that he was protesting against the project being built at Norochcholai due to the reasons he has already stated, which are security concerns both for the area as well as for the damage that may occur to the centuries old shrine of St. Anne's.

The bishop reiterated that his position is that while he firmly believes the project is not suitable for Norochcholai, this in no way means that a coal power plant cannot be located elsewhere. "In a place where there is less threat of attacks to the station as well as where religious shrines will not be affected in any way would in my opinion, be more suitable," he asserted.

The bishop observed that it has been some time since the president refused to allow the project to get underway at Norochcholai, and he pointed out that in that context the top management at the CEB should have begun looking for more suitable locations. "Instead they have also just sat on this issue and waited for a crisis situation to develop," he said.


CEB chairman optimistic

Arjun Deraniyagala, Chairman, CEB, when asked about the present financial crisis the CEB is facing, sounded optimistic saying that he is certain the finance ministry together with the cabinet of ministers will come up with alternatives and proposals that will bring the CEB out of its present crisis. He mentioned imports at concessionary rates and bank loans that could perhaps be negotiated to help the CEB raise its head. The fact that more loans would only tell on the consumers finally, Deraniyagala admitted it is a possibility unless a proposal to install a coal power project gets underway.

As far as coal power is concerned he said, the position is very straightforward. "It is very clear that unless we go in for coal, the cost of operating oil generating plants is colossal," he noted, adding that there is no way forward for the country if it is to continue with the latter.

Asked why he was not pushing more strongly for the installation of the coal power plant at Norochcholai, he maintained that ultimately the president had to decide. "We will continue to make representations but in the end the government has to take the decision. It is up to them to tell us if and when we can go ahead," he claimed.

Deraniyagala reiterated that the price of electricity has gone up because of the huge increase in oil prices in the world market. Oil, he asserted, is something the country has to look at only in the short term.

He said, the massive increase in oil prices had forced the CEB into bearing this cost, which in turn rebounds on the entire nation who are also taxed into bearing this cost. "It is ultimately up to the people to decide if in fact we can bear such a heavy cost on an essential commodity," he said.

The chairman maintained that in the last two years rains have been poor in the hydro catchment areas and as a result the CEB unfortunately has had to depend on oil fired plants.

He admitted that at the moment the CEB is not what it is used to be. "The CEB did have monies in excess which we do not have now. We consider this to be temporary. My expectation is we will have normal rains in 2001 and we will soon be free of this problem," he said.

Not resorting to electricity cuts was a decision backed by a majority of the nation, Deraniyagala pointed out. "After all, it is our job to supply electricity and if we have to borrow right now to do that, then it is a measure which will be finally worked out by the finance minister."

He noted that not only the CEB, but the state petroleum corporation too is financially in the red, "not because of bad management but due to world prices escalating," he said.

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