Power tariff hikes and need to revamp CEB

By Ordinary citizen

Ceylon Electricity Board (CEB) has again requested for an increase of 70% in electricity tariffs to settle its past losses. What are these losses and how can the CEB be run as a profit-making Institution? Recently, the Chairman of Public Utilities Commission (PUCSL) has claimed that the CEB had a net profit of Rs. 1 billion last month owing to the increase in rates a few months ago. Is it fair to burden an already economically oppressed public with a 70% increase in rates? While the CEB is making these unfair claims, the minister is silent on solving the problem which is the CEB itself. He even claimed that half the employees of CEB are redundant and what has he done to remedy this situation? CEB and Ceypetco are the biggest loss-making state-owned enterprises (SOE). In spite of losses they continue to pay bonuses and huge salary increases to its employees. They get a 25% salary increase every three years and recently CEB paid Rs. 3679 million to its employees under various ruses. In spite of that CEB employees recently demanded a 36% salary increase and the management has agreed to pay the usual 25% increase and this is at a cost of Rs. 9 billion! A meter reader in the CEB gets a salary of Rs. 120,000, about twice paid to a graduate teacher. General Manager of CEB gets a salary of Rs. 655,310 and a Grade 1 engineer gets a monthly salary of 533, 895 according to their own circulars. In addition, they get additional remuneration for site inspection, overtime, fuel allowance, telephone bill reimbursement etc.

These disproportionate salaries have arisen owing to the high handedness of the Board of Management which has taken decisions against court orders, cabinet decisions and Management services decisions. Since the whole country is dependent on the electricity supply, all Governments in the past have conveniently sidestepped confronting the CEB employees and given all what they ask for.

The Auditor General has pointed out that CEB has paid 1712 million in 2018 and 1873 million in 2019 going against cabinet decisions made in 2007 and Management services circular of 2009. In 2014, CEB Board proposed a 100% salary increase to only Engineers (circular no. 2014/GM/46/Pers dated 27 November 2014 and according to a Court decision (CA/WRIT/193/2015) this circular is illegal, null and void and any payments based on this circular is illegal. However, flexing its muscle, CEB granted a 85% of the salary as an allowance to engineers through Presidential decision on the advice of the attorney general which tantamount to contempt of court. Our politicians have been intimidated with the threat of strikes so as to cripple the entire country and they have no spine to oppose such exorbitant salaries and allowances of CEB employees. They have openly flouted the Government rule that limits all allowances to a maximum of 65%. If we consider other allowances on top of this 85% salary it comes to a whopping 138% of the basic salary! Furthermore, even the PAYE tax of its employees is paid by the CEB in clear violation of the Inland Revenue Act which specifically says that the income tax of an employee has to be paid by the individual and not the employer. These matters have been questioned by the COPE on several occasions but no corrective actions have been taken.

This reminds me of the courage Singapore’s Lee Kuan Yew had in dealing with a work to rule campaign of the Singapore airline pilots union in 1980. He summoned the pilot’s union representatives and gave them a choice. In his legendary remarks, he told them, “If you continue this I will by every means at my disposal teach you and get the people of Singapore to help me to teach you a lesson you won’t forget. And I’m prepared to start all over again or stop it,” Lee said. He further said, “They know that I’m prepared to ground the airline. They know that I can get the airline going again without them. And let there be no mistakes about it. Whoever governs Singapore must have that iron in him. Or give it up. This is not a game of cards. This is your life and mine. I spent a whole lifetime building this. And as long as I’m in charge, nobody’s going to knock it down.” And with that, the matter with the Pilots union was resolved. We do not have leaders of Lee Kuan Yew’s calibre and put the country first leaving aside politics. They meekly surrender to unfair demands of strong unions such as those of the CEB who hold the whole country to ransom with strike actions.

Other actions of the CEB have contributed to the losses incurred by the CEB. They have continuously scuttled cheaper energy options such as solar and buy power from private power plants at exorbitant rates. The powerful Engineers union has blocked new power generating projects such as the 300 MW LNG plant Sobodhanavi. According to them it is cheaper to purchase emergency power from private power plants which is far from the truth. Also, some of these plants could have been absorbed by the CEB through the initial agreement, yet they continue to pay not only the unit cost but also their investment expenditure. CEB has procrastinated actions on at least eleven low cost renewable energy projects in the Long Term Generation Expansion Plan (LCLTGEP) for reasons best known to them and although former President Gotabhaya in his election manifesto promised to get 70% of our energy from renewable sources, the high handed CEB Engineers: union has continuously opposed the implementation of any of the renewable energy projects. Some examples are the 100 MW solar projects at Siyambalanduwa and Pooneryn and the 100 MW wind power project at Pooneryn.

It is grossly unfair to burden ordinary consumers with high electricity tariffs when a complete overhaul of the CEB is what is needed. If the engineers’ union completely blocks such low-cost projects, it is better to go for a 100% privatisation of the CEB, which appears to be the only solution. No politician either present or past have the courage to face the unfair practices at the CEB and this requires the action of the Government at the highest levels and the parliament should debate this crucial issue in parliament and come out with a long-term strategy to provide for our energy needs. Our President appears tough on hapless student leaders and what actions he proposes to take against them. However, he has been silent on this crucial issue while the treasury is pumping around Rs. 500 billion annually to sustain the corrupt CEB and this amount has not even been included in his budget speech. No wonder why we are in such a precarious position where our economy is crumbling.