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Court-room style forum on electricity tariff hikes

2013 Jul 13

‘Witnesses’ give evidence before a panel of judges and respond to questions by prosecutors regarding to corruption scandals and wastage in the State energy sector and how it affects consumers

By Dharisha Bastians
Several witnesses were summoned to testify before a People’s Tribunal last week that was investigating whether the recent increase in electricity tariffs in the country was justified.
The three-hour public forum entitled ‘Is the electricity bill justified?’ was conducted courtroom style, was organised by Transparency International Sri Lanka and held at the J.R. Jayewardene Centre in Colombo 7 last week.
Sitting as tribunal judges at the forum were retired High Court Judge W.T.M.P.B. Warawewa, who provided the dissenting judgment in the famous Sarath Fonseka White Flag verdict, Attorney-at-Law S.G. Punchihewa, former Advisor to the Ministry of Power and Energy Dr. Janaka Ratnasena and former Secretary, Posts and Telecommunications Ministry Piyatissa Ranasinghe. Senior Attorneys Lakshan Dias and Chandrapala Kumarage played the role of prosecutors or moderators at the Tribunal.
Eleven witnesses were called before the Tribunal to ‘give evidence’ in the question of whether the country’s electricity tariffs were justified from the perspective of consumers. Ranging from retired public servants to ordinary citizens, witnesses before the tribunal cited broad Government sector corruption, poor energy policy, the poor management and inefficiency of the Ceylon Electricity Board and a lack of public consultation and participation in formulating state policy.
Giving evidence before the tribunal, People’s Movement Against the Increased Electricity Bill (PMAIEB) Representative Saman Rathnapriya said the CEB losses, corruption and wastage were the reason for the recent exponential tariff increase. Rathnapriya said he had documents to prove which indicated that the Sampur power plant currently under construction would be an inefficient one that would place further burdens on the electricity consumers once the plant was commissioned.
Rathnapriya charged that the Power Minister at the time John Seneviratne had not been aware of the Sampur Agreement and that Sri Lanka had entered into the agreement with an Indian company without CEB board approval. “The CEB directors did not approve the signing of this agreement. It was done in secret and without the proper feasibility checks being performed,” Ratnapriya observed.
He said that while the agreement claimed the Sampur plant would run at 40% efficiency the actual efficiency of the plant was 35% resulting in losses of between 2.6 and 4.9 billion rupees. Asked by the prosecutors whether he could submit documentation in proof of his statements, Ratnapriya said he could.
According to Ratnapriya, the recent electricity price hikes were a result of a combination of issues, including the fact that the CEB had to cover its losses, due to wastage, corruption and inefficiency and also because electricity generation brings with it an inherent set of problems.
He explained that while hydro power was the cheapest and most environmentally conscious choice for power generation, the unpredictability of the option due to changing weather patterns meant that the country had to pursue other alternatives simultaneously. According to Ratnapriya, although thermal power generation, using diesel or coal was an efficient system, governments have failed throughout the years to formulate proper policy to increase capacity from this system. “Currently most thermal power contracts granted by the CEB are advantageous to the supplier and not to the consumer,” he complained.
Ratnapriya also made a serious accusation about the CEB’s management when he told the tribunal that the state electricity supplier was scheduling upgrades of its hydro power plants at a time when the reservoirs were full to capacity.
“In other countries that use hydro power, upgrades and renovation is undertaken during times of low rainfall or drought. The CEB on the other hand is preparing to drain the reservoirs that are currently filled to the maximum in order to ensure their own hydro power estimates do not show a discrepancy with actual hydro capacity available this year,” he said.
Ratnapriya explained that CEB estimates for the amount of electricity that could be generated in 2013 through hydro was 2800 GW. However, due to excess rainfall in the first half of the year, that capacity had almost doubled to 4000-5000 GW. Under the circumstances the CEB has the option to provide electricity at lower rates at least at present, Ratnapriya added, thanks to the excess rainfall, although the Board was instead planning to release water and begin upgrade of plants to ensure their original estimates remain the same.
Also giving evidence, Lasantha Dissanayake who said he was an investigative journalist said that the Sri Lankan Government blamed external factors as being the root of all the country’s problems. He said that the truth of the matter was that the country was governed without coherent policy. “Ports and airports are constructed ad hoc as the Government chooses, although there is no real public consultation or input as to the necessity and disregarding feasibility studies,” Dissanayake charged.
He said that the increased electricity tariffs were only one element of a massive tree of state sector corruption, wastage and decrepit policy. “We live in a country in which the Parliament and the country’s first citizen enjoy unlimited power. But the people – they have no economic freedom. More taxes will come, more increases will come as long as the root causes of all these issues remain unaddressed,” he explained.
E.A.P.C. Wimalaratne giving evidence at the tribunal said that the Public Utilities Commission of Sri Lanka had sought the opinions of some 96 people, all of whom said an increase in electricity tariffs would be grossly unjust. “In spite of this, the PUCSL went ahead and approved the tariff increase,” Wimalaratne complained.
He said that the Committee on Public Enterprises, a parliamentary oversight committee had repeatedly cited the CEB and CPC losses and made recommendations for increased accountability and efficiency at the two loss-making state institutions. “But nothing happens. These two institutions have always been loss-making but nothing is being done to reverse it,” he explained. Wimalaratne said that the true reason for the increase in fuel bills that was driving electricity costs up was the depreciating rupee, as a result of bad fiscal management and not increasing global oil prices.
Many of the witnesses complained that following the tariff hike, attempts to reduce consumption had proved futile since electricity bills were still higher than pre-increase despite lower unit usage.
The panel of judges and prosecutors called on the witnesses to submit documentary proof about the corruption and wastage at CEB and the electricity bills proving the exponential increase in tariffs to the tribunal for perusal. The tribunal would declare its verdict once the documentation was received and more testimony and evidence was submitted in writing to the TISL for which more time would be granted, the organisers said.

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