THE CEB CRISIS- In the end, economics governs!

By Shyamon Jayasinghe, Melbourne

In the end, economics governs! Successive governments of all shades have fiddled with our huge electricity problem shying away from taking the hard decisions that economic reality demands. The burden has ballooned and fallen on the UPFA government. CBK lies between the devil of the JVP and the deep blue see. A major infrastructure in our country is being threatened with extinction.

During the previous CBK regime, Sri Lanka shocked the world and went into continuous darkness for weeks . The UNF government, which succeeded her government switched on the lights with a purely short term measure- the expansion of thermal power. However, nothing was done about the real solution, which is the harnessing of coal power. Political dynamics have since dogged the introduction of coal power in Lanka. The Norochcholai coal power project and the Upper Kotmale project was shelved.

Governments have been happy to survive in the short run without the resort to coal power. But at what cost? At the cost of hugely subsidising electricity. Subsidies are funded by bank credit which cannot be repaid. This is true of the whole gamut of subsidies like petroleum, fertilizer etc. When bank credit is not meant to be paid, this strategy amounts to the printing of money and to inflation. The cost of living keeps mounting. There is a political advantage in letting COL rise this way than by government itself raising prices directly, namely the government can pretend that it is not responsible. It is inflation after all! The world market is the devil! What can we do? Leave alone ordinary people, most of our political leaders display an unbelievable lack of economic literacy. The irrational anti-privacy protests of the JVP and the JHU reflect this same ignorance. Revd. Athureliye Rathana is reported to have stated that “globalisation does not bring forth capitalists but government officials”!

The second aspect of the electricity crisis is that the CEB has become a highly bloated organization with far more staff than it requires. Government subsidies, once again, hide the consequent costs. State corporations are favourite recruiting grounds for our politicians. This is not employment but ‘hidden unemployment’.

The over-expanded employee population has not meant better administration as is seen by the numerous reported cases of illicit tapping of electricity by businesses. It is estimated that 20 per cent of electricity is wasted this way and much needed revenue to the CEB is being denied. Meter readers have gone wild acting as they do in toe with customers! Maladministration is rampant. New technologies of control at field level are resisted by the trade unions.

What does the JVP do in terms of its obligations to the government? Without offering any positive constructive suggestions it protects the errant employees and conspire with its trade union to block the reforms that CBK has planned. Several times has the government tried to bring restructure and every time workers threaten to strike. Each time the cabinet withdraws meekly.

In administration terms, I think the CEB retail distribution should be immediately privatised. But the government would not dare to do that with a coalition partner who joined it merely to defeat the UNF government. The UNF has been displaced. But what have they brought in its place?



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