Do we deserve uninterrupted electricity?

By Sanjeewa Jayaweera

The day starts with friends calling and asking, “Machan, any power cuts today?” The main item of news on television is also of possible power cuts. Even overseas television stations carry news about possible power cuts in Sri Lanka. In Sri Lanka, a potential power cut of even one hour is viewed with trepidation.

Despite the issue of power cuts being of great importance to the public and being constantly in the news, none of us knows what the future holds. No one seems to know what needs to be done, and it seems a case of postponing the inevitable by a few days.

The energy minister Udaya Gammanpila has pronounced that the Ceylon Electricity Board (CEB) should pay US dollars to purchase fuel from the Ceylon Petroleum Corporation (CPC). The Power Minister Gamini Lokuge replied that the CEB does not recover their dues from customers in USD. For once, both are correct! The shortage of foreign exchange in the country is why the CPC cannot source diesel and furnace oil in the quantities required by the CEB while ensuring adequate supply for transportation and the use of industries. The CEB is also correct in saying that they don’t collect their dues in USD. Let alone dollars; they can not even collect all their dues in rupees as approximately Rs. 45 billion are in arrears from the customers.

As is the norm, the opposition parties and various trade union leaders come out with their vituperative comments, none of which are helpful to resolve the current problem. The Ceylon Electricity Board Engineers, who are game for industrial action at the drop of a hat, have gone to the extent of announcing the power cut schedule, which I would think is the prerogative of the senior management of the CEB.

Recently, on the “Mawatha” programme broadcasted by Sirasa TV, an insightful discussion ensued about the current power crises. Dr Tilak Siyamabalapitya (TS), an electrical power expert, raised some pertinent issues. He commented that the electricity tariff has not been changed since 2014 and that the customers are charged an average of Rs. 16 per unit when the cost of generating a unit was as much as Rs. 24. The net result is that the CEB has accumulated losses of over Rs. 400 billion. He posed a question to the Chairman of Public Utilities Commission (PUC), Janaka Ratnayake (JR), a fellow panelist, as to why the tariff had not been increased despite the PUC being legally empowered to do so. Unfortunately, JR, an entrepreneur who understands income statements, balance sheets, cash flows and return on investments, did not provide an adequate response other than to say that they have now proposed an increase in the tariff. A case of closing the stable door after the horse had bolted.

I am sure the PUC has refrained from increasing the tariff only because successive governments would have instructed them not to do so. Unfortunately, governments that we have elected since independence have inculcated in the people a culture of okkoma nikang – everything free. Due to this, governments shy away from taking decisions on pricing utilities and commodities based on the concept of “cost plus profit.” There is no other explanation for why the electricity tariff has remained unchanged for seven years and why the CEB has accumulated losses over Rs. 400 billion with the CPC not far behind. There is no commercial sense in selling an item below cost. The irony of the strategy is that even the poor are subsidizing the well-off, who are the biggest consumers. The losses are funded by money printed debt and palmed off to the next generation.

TS also lamented how in 2015, the GOSL decided to cancel the Coal Power Plant to be built in Sampur, for which incidentally the MOU for the first 500 MW phase was signed on December 26, 2006. So, after procrastinating for 10 long years, the project was canceled. He stated that no government should change the first four years of the long-term power generation plan of 20 years submitted by the CEB and approved by the PUC. It seems the current long term power generation plan is also in limbo as the target for renewable energy by 2030 is still under discussion despite two years having elapsed.

About a decade ago, I used to visit India regularly and particularly in the summer months, when power cuts extending to over six hours was the norm. This has been the case even in Pakistan and Bangladesh. I came across a news report dated June 24 2015, filed by Rajiv Biswas about the power crisis in Pakistan. “Pakistan has been in an energy crisis for some years. The current shortfall in power generated is estimated at 5,500 Megawatts, with electricity production of 15,500 MW compared with demand of around 21,000 MW. As a result, there is significant electricity load shedding being implemented across Pakistan in both urban and rural areas. Pakistan has been facing a power crisis for some years already due to a combination of factors, including low electricity tariffs due to subsidies, which resulted in accumulated losses for the electricity generators, as well as inadequate investment in new power generation capacity and high transmission losses due to poor infrastructure as well as theft of electricity. The long periods of load shedding each day have resulted in a lack of electricity supply, sometimes for over 12 hours per day. Years of neglect and lack of reform of the power industry have contributed significantly to its deteriorating financial position. A key constraint was the slow progress in undertaking pricing reforms for energy tariffs, which have contributed to the financial problems of the electricity-generating companies. The ongoing power crisis has severely impacted upon the industry and transport sectors in recent years, as power shortages have had a crippling effect on industrial production.”

If one is to insert the word Sri Lanka to replace Pakistan, the above paragraph would be a carbon copy of what an analyst would write about the power crisis in our country. The only difference is that in Sri Lanka, the government instructed the CEB to run generators operating on diesel and furnace oil to bridge the shortfall. The decision was made even though it was the most expensive power generation method. There was no attempt even to impose a surcharge to recover the additional cost. The logic behind the proverb “Cut your coat according to your cloth” has escaped both our politicians and the voters.

In The Island of January 27, 2022, a report filed by S. Venkatnarayan is captioned, “Indian Supreme Court issues notice on political parties’ promises of ‘irrational freebies’ before elections. It is not my intention to delve into the reasons for the Supreme Court to have sought responses from the Union Government and the Election Commission of India. We, too in our country, have been seduced and fallen for various “freebies” promised by political parties leading up to elections. Many of them have remained only as promises. I still remember as a 10-year-old being fascinated by the election promise of Mrs Bandaranaike in 1970 of an extra measure of free rice, which she promised to even bring from the moon!

Given that in July 1969, I had listened over the radio of Neil Armstrong landing on the moon, it was not too difficult for a 10-year-old boy to believe that promise! Unfortunately, many decades later, despite many lessons, many of us still believe what politicians promise. Based on news reports, the inducement is now primarily a bottle of arrack or a few roofing sheets! I was a bit taken aback recently when viewing a short video interview of Sir John Kotelawela in 1959 when he said, “our people want money for jam”.

In my view, the comment made by Minister Gammanpila that it is best to suffer a 90-minute power cut now than four hours in April is the most sensible of the options. When there is a limitation of resources, there needs to be a list of priorities and winners and losers in that context. The opposition parties must also educate the public that these measures are required. I know I am “whistling in the dark”, but we need to live in hope.

If Indians, Pakistanis and Bangladeshis have had to endure daily power cuts over six hours, Sri Lankans need to grit their teeth and stomach the inconvenience. A panellist on the “Mawatha” programme mentioned how in 1974, even in Great Britain, the government had to introduce a three-day working week, closure of all television stations by 10.30 p.m. and children had to study by candlelight due to power cuts. For a country that had been a colonial power for centuries, it would have been difficult to stomach such living conditions. However, to their credit, they gritted their teeth, accepted the new norm, and worked through in search of better times. We, too in Sri Lanka, need to do the same and be pragmatic of our conundrum.