CEBEU rejects long standing IMF proposed reforms, but willing to go along with Central Bank policies

By Ifham Nizam

The Ceylon Electricity Board Engineers’ Union (CEBEU) yesterday rejected the dictates of the International Monetary Fund and said they will only follow policies of the Central Bank of Sri Lanka (CBSL).A former CEBEU President and its Executive Member told The Sunday Island they had cordial discussions with various stakeholders and when it comes to policy matters it will have to be the Finance Ministry or CBSL.

Citing CBSL Governor Dr. Nandalal Weerasinghe, he said that the Governor often spoke about the increasing USD rates. “When the last tariff revision was done in 2013, the dollar rate was about 130 rupees and now 360,” he said, adding that institutions cannot go in that manner.”

The Union also said that the Public Utilities Commission of Sri Lanka (PUCSL) has all rights when it comes to tariff rates, however, they have no authority to poke into internal affairs and it is up to the CEB management to decide on it.PUCSL Chairman Janaka Ratnayake said that plans are underway to cut down some perks of the debt ridden CEB.

When contacted, CEB Chairman Nalinda Illangakoon told The Sunday Island that there were no such requests. However, he said that though the tariff increase is less than what they asked for, nevertheless they have to accept it.In his blog, Energy Expert Dr. Vidura Ralapanawa, said: If you think the current 75% tariff increase by CEB is too much, remember CEB asked for a 229% tariff increase at the public hearing, and CEB GM lobbied the IMF to force PUCSL to do so.”

He said that the 229% requirement is a figment of their imagination, set by a clueless tariff team (all engineers, no economists nor financial analysts). It assumed no demand reduction (happening now), no load shedding (happening now) and completely inelastic pricing (meaning that people will consume the same amounts irrespective of costs).He also pointed out that a 229% tariff increase would have wrecked the economy, driven the SMEs to the ground, created mass poverty (real and energy poverty) and left CEB with Billions of Rupees cash in hand.