Editorial

Power generation and public funds

Recently it was reported that the country was losing billions of rupees not because of the war but due to the equally critical power generation. A key reason for the losses is the wrong use of fuel to power these plants. Among other reasons cited was wastage in certain power plants.
As per some estimates the loss suffered by the CEB due to thermal power plants in 2007 is a staggering Rs. 15 billion while the Engineers Union have gone on record stating the state power utility was losing Rs. 55 million per day. Amidst this serious situation there are reports that yet another expensive furnace fuel guzzling 300 MW plant at Kerawalapitiya is due for commissioning shortly.

Experts have warned that this plant will add a further Rs. 8 billion in annual losses for the CEB. It was also reported that Japan and some officials in the Government were trying to launch a 300 MW power plant initially using expensive auto diesel, also at Kerawalapaitiya, whereas the suggestion was to make it a cheaper Liquid Natural Gas (LNG) plant from the inception itself. If the recommended move is ignored the CEB will lose a staggering Rs. 22 billion per annum. The reason being price per KW unit of LNG is Rs. 10 whereas auto diesel will cost Rs. 21. These figures on losses are incomprehensible and those in the power sector as well as managing public finances are turning a blind eye on the issue.

While the main opposition UNP is busy campaigning against the proposed US$ 500 million Bond issue, it must urgently focus on this bigger crisis as well. The mounting loss, as well as the fast deteriorating financial situation of the CEB, coupled with the ill conceived future generation plans are similar to a bomb ticking.

The CEB engineers have blamed the politicians and certain key officials for the serious state of health of the power sector. But is that all the engineers can do? They are quick to stage work to rule campaigns on staff issues but drag their feet when the very institution they serve is heading towards financial suicide. We understand that successive Ministers as well as Governments haven’t heeded sound advice given by engineers but CEB also needs to look within.

It is ironic that even the oil rich Saudi Arabia is reducing reliance on expensive auto diesel power plants. In the US, they are even opting for coal power and LNG as opposed to thermal plants. Queries have been raised at debates why Sri Lanka, though poor and struggling with both a financial crisis and mounting debts, is pursuing the use of an expensive source of energy.

The country has to accelerate the push for cheaper as well as renewable energy. We have had enough talk and policy statements. What is lacking is swift but responsible and concerted action. The desired high socio-economic growth, that is being pursued by the Government and aspired by people, cannot be sustained if power generation is costly as well as loss making into billions in the future. If urgent action is not taken the power sector will certainly electrocute the nation sooner than later.