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TUs
threaten to short-circuit CEB Bill
By Santhush Fernando
With the government’s move to re-introduce
the Sri Lanka Electricity Bill, trade unions are up in arms
again, insisting that they will not allow the implementation
of the Bill, if their demands are not met.
The ailing State utility major-CEB’s future hangs on
today’s meeting between trade unions and ministry officials,
The United Peoples Freedom Alliance (UPFA) government under
President Mahinda Rajapaksa attempted to bring the Bill thrice
before, but was forced to withdraw in the face of severe opposition
from trade unions and opposition political parties.
The move is not to privatise, but to restructure the heavily
indebted CEB government says. Opposition political parties
question as to why the government wants to restructure the
CEB, when it had renounced privatisation and subsequently
abolished the Public Enterprises Reforms Commission (PERC).
Previous attempts
On March 29, 2005, nearly 8,000 workers picketed in front
of the CEB head office in Colombo, and all-out trade union
action was averted as the Janatha Vimukthi Peramuna (JVP)
was a constituent of the UPFA government, then.
Despite the assurance by President Rajapaksa in the run up
to the 2005 Presidential Election, in July 2006, in the wake
of the UPFA government’s second attempt, the JVP again
put itself on a collision course, and government indicated
that it might turn to the UNP.
JVP MP and union strongman K.D. Lal Kantha said that his party
had not yet been shown the draft Bill, but said he believed
the proposals included subtle moves to privatise the CEB.
The Bill provided for six public companies to run the CEB,
following its dismantling in the first step towards privatisation.
External pressure
Like the previous UNF, however, the UPFA government has
been under severe pressure to accelerate CEB reforms. Two
large loans-Rs. 3 billion from the Asian Development Bank
(ADB) and another Rs. 7 billion from the Japan Bank for International
Corporation (JBIC)—are dependent on the restructuring
process, industry experts say. Then Power & Energy Minister
Premajayantha reportedly told media that without restructuring,
the ADB and JBIC will never consider future funding for CEB.
The previous Ranil Wickremesinghe regime introduced the Electricity
Reform Act in 2002 and proposed to split the CEB into eight
government-owned companies. A voluntary retirement scheme
(VRS) was also planned to slash the workforces in preparation
for the complete privatisation of the companies.
The state of the State utility is symptomatic of government’s
overall financial crisis. The long term debts taken for development
projects by the CEB, from various lending institution, through
the government, as at September 30, 2007 stood at Rs. 47.7
billion. Further, since year 2000, the Board has been unable
to service its long term debts and continues to incur a daily
loss of Rs 55 million to the government.
JVP
TU alleges India’s hidden hand in the deal
JVP affiliated Ceylon Electricity Employees Union (CEEU),
unlike other CEB TUs, is against the Bill in principle, its
Convenor Ranjan Jayalal told The Bottom Line.
“If we take the new Bill, it proposes to repeal the Electricity
Reform Act No 28 of 2002, which was enacted by the then United
National Party (UNP) to spearhead the privatisation of government
enterprises. So we are happy with the repealing of that act.”
“However, it further proposes to repeal Electricity Act
No. 19 of 1950. which is the founding stone of the CEB, and
we reject it outright. What the government wants to do is
to bring the CEB to the brink of destruction, in order to
sell it to India.”
“Already, India is trying to manipulate the Sri Lankan
market. We have seen that in the Petroleum industry and in
Railways, where a deal took place very recently to build another
rail track by an Indian firm.”
“India has undertaken to build a Coal power plant in
Sampur and yet another 500 megawatt plant in the Trincomalee
District. Also, PowerGrid Corporation of India has proposed
to lay an undersea High Voltage Direct Current (HVDC) transmission
line between India and Sri Lanka. The move to enact this new
Bill is under way to facilitate the sale of CEB or parts of
it to India.”
During discussions, however, the Minister has agreed that
powers of the minister have been severely curtailed by the
Bill, Jayalal said. Any attempt to bring the Draft Bill to
Parliament would put the entire country in darkness, he added.
“This is merely an eyewash. These discussions are held
just to buy time.”
Jayalal said that 28 CEB trade unions had decided to stage
union action and added that these moves were contrary to the
assurances President Mahinda Rajapaksa made in the run up
to the 2005 Presidential Election.
Not
against Bill in principle- CEB Engineers’ Union
The
Ceylon Electricity Board Engineers’ Union (CEBEU), however,
is not all out against the new Bill, but insists that, the
demands of the trade unions must be included in the Bill.
President J. Meegoda, told The Bottom Line that although the
government has not been courteous, it had much expectations
that its demands will be met.
Meegoda said that its main concern was that, under this Bill,
CEB would be a mere licensee, which has to obtain a license
like any other private player.
“We are not against the CEB coming under regulation.
But, even as Engineers, we do not have the authority to make
decisions, even regarding the day-to-day functioning of the
CEB. What we insist is that the CEB should be kept a government
entity and to give us authority and responsibility, so that
we are made accountable.”
Salient futures of the new Sri Lanka Electricity Bill
Electricity Reform Act No 28 of 2008 and Electricity Act No
19 of 1950 to be repealed
Electricity to come under Public Utilities Commission (PUC)
and the Commission to act as regulator for Electricity industry
Commission to conduct licensing, regulatory and inspection
functions for generation, transmission, distribution, supply
and use of Electricity in Sri Lanka, which hitherto was undertaken
by the CEB
PUC to regulate tariffs and other charges levied by licensees
To implement a Code of Good Practice for industry
Power & Energy Minister to formulate general policy guidelines
for the industry.
Commission to appoint Electrical Inspectors to inspect plants
and functions of licensees
Commission empowered to issue general licenses under Section
13, and special licenses for generation, transmission and
distribution, under Sections 14, 15 and 16 respectively.
Tariff system to be two-tiered; namely, Transmission and Bulk
Sale Tariff (S 28(1)(a) and Distribution and Supply Tariff
(S 28(1)(b)
Commission vested with power to take over activities/ undertakings
of a licensee
Regulations to be made for Consumer Protection and standards
of performance with different standards for different licensees
Under Sections 3(1)(a), (b) and 4(1)(a) of the new Act, unbundling
of the ailing State utility is to be facilitated, with generation,
transmission and distribution assigned to one or more private
companies.
Furthermore, Industry experts fear that Electricity industry
will be at the mercy of free market forces, as Section 4 (g)
of the Act, it will be an objective of the PUC to promote
competition.
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