PUCSL calls for consultancy to revamp bankrupt CEB

I was surprised, as one who worked at the Ministry for Power and Energy for nearly three decades, to read a newspaper advertisement calling for consultancy service by Public Utilities Commission Sri Lanka [PUCSL] from qualified consultants who could investigate the reasons to the woeful financial situation of the Ceylon Electricity Board [CEB] and to propose how to introduce reforms to the country’s largest vital utility to bring financial stability. My immediate reaction was, has the PUCSL overstepped, usurped or trespassed on the duties and undermining the efficiency of the Ministry for Power and Energy. Whatever the PUCSL act says this matter should have been rightly handled by the Ministry.

Without wasting time, energy and finances, the Ministry for Power or the CEB should have studied how this vital state commercial organisation was run profitably earlier – pre-1990, with knowledgeable staff, briefing the Minister, after consultations and discussions and reaching agreement with the CEB. It would have been more suitable, unless the Secretary has already taken action to find a solution, appoint a committee consisting of a representative of CPC as the major financial debt is for purchase of diesel from the CPC, a representative from the Treasury, GM, CEB a consultant to CEB on Energy pricing.

As I see interferences and appointment of political favourites as Chairmen and Directors to the Board and General Managers toeing the line without objections. Overstaffing to satisfy Minister’s wishes is one, and today the CEB has, I understand, over 10,000 in the lower grades.

The next is in not implementing the Long Term Least Cost Generation Plan on schedule, causing short fall in electricity to meet the ever-increasing demand, resulting in seeking help from private suppliers, leading to horse deals.

Before the CEB was set up, this vital utility – electricity was under the Department of Government Undertakings [DGEU] and managed as a government department subject to FR and other administrative regulations, and the Secretary to the Ministry as Chief Accounting officer was responsible. When the CEB was set up as a statutory body, though under government, there were no strictures as followed by government departments and Ministers made these organisations, employment exchanges to employ their supporters, not the interests of the organisation. In fact, the World Bank insisted that the CEB be privatised, mainly due to over staffing and other unwanted expenditure. I remember, once WB granted a loan with a condition that no cars be purchased from the loan granted on a particular project. This shows how WB follows work done on loans granted, to ensure the loan Is utilised in a proper manner without waste, unlike, for example China.

Next the most important reason why the CEB is in this financial mess, is not following the procedure followed then when the Long Term Least Cost Generation plan was discussed in detail by the Ministry along with the Minister and implemented without any delays. But what happens today? The Minister interferes and also the newly formed Public Utilities Commission of Sri Lanka –[PUCSL] and approval delayed or altered. In one case where PUCSL delayed in granting approval was the inclusion of a Coal Power Plant. I boldly question who are the other engineers, other than the qualified, trained engineers in the CEB who could prepare the Generation plan. Others outside CEB are those engineers who have retired and set up private consultancy firms.

The other two recent notorious cases are – Delay in awarding the tender for a LNG plant at Kerawalapitiya, where the Minister interfered in the award of the tender to the lowest offer by a local company and insisted the award be made to a Chinese firm. This dragged on for over four years and ultimately the local firm had to seek legal remedy.

Subject to correction, no major generation project had been undertaken, after the Upper Kotmale Hydro Power project. The on-going award of a tender to a US firm [ NFE] has caused much up roar and displeasure not only by engineers of the CEB but also members of the ruling party, including three Cabinet Ministers. This award had been made, even without the knowledge and acceptance by the Ministry for Power and the CEB.

It would have been unnecessary to call for this Consultancy, if only the government had retained the former Minister Dallas Alahapperuma, without removing him in the reshuffle of Cabinet Ministers. He would have made the CEB a profitable venture as pledged by him, and towards this end had taken certain steps. One case to mention was his request to President Gotabaya Rajapaksa, to remove PUCSL from interfering in the internal affairs of the CEB. This was granted and unfortunately, Prime Minister Mahinda Rajapaksa who was also the Minister for Finance overruled President’s directive. Whether this interference by PM is right or wrong is another matter.

The worst is, if PUCSL interferes with the administration of the CEB, it will also mean, instructions from the Ministry to CEB could also be questioned or overruled by PUCSL. How many masters have CEB to serve? Will not there be utter confusion and thereby who suffers – the country and we the consumers.

A few solutions to run the CEB as a profitable venture in my view are: –

1. Remove unacceptable political interferences and give political support to implement the proposals of the CEB on target.

2. Stop all new recruitments, specially to lower grades.

3. Appoint knowledgeable, honest Chairman and Board of Directors who could stand up to Minister’s or government’s instructions which are detrimental to the organisation and done without the knowledge or acceptance of the CEB. – Example – NFE, cancellation of the additional Coal Plant and setting up a target to achieve 70% renewable sources of energy.

4. Stop unnecessary expenditure, especially to please politicians.

5. Encourage installation of Solar panels in all buildings, Domestic, shops and small-scale factories which will also mean reducing the minor staff.

6. Revise the tariff to be realistic, though it may be unpleasant.

7. Make PUCSL an advisory body not interfering with the administration of the CEB.

I wonder whether the Ministry for Power would allow PUCSL to go ahead with the call for a consultancy, thus hand over the responsibility to PUCSL in managing the CEB or call for its cancellation/ withdrawal?

G. A. D. Sirimal

BORALESGAMUWA.