Days of dilly-dallying with projects are over

No power cuts in 2008

The increasing number of violations committed against the Ceasefire Agreement (CFA) have paved the way to abrogate the agreement and it was not a sudden decision of the government but a fulfilment of a long felt need, Minister of Power and Energy W. D. J. Seneviratne said.

In an interview with the 'Sunday Observer' he emphasised the need of bringing a political solution soon while eliminating terrorism. " Power should be devolved so the people of the North and East can ensure their democratic and fundamental rights in their respective areas", he said. Meanwhile, assuring a 2008 free of blackouts and no increase in the monthly electricity bills, he said that the government's intention was not to burden the people by increasing electricity prices. Minister Seneviratne also said that despite fighting to crush terrorism, the government is going ahead with development projects and would be able to complete some of the major power projects before the scheduled time.

Following are the excerpts of the interview:

Q: Are we to experience blackouts in 2008?

A: No. The government is very concerned about the repercussions of blackouts as there would be adverse effects on the economy and the social structure of the country. So the government has determined to go ahead without power cuts.

Q: The Ceylon Electricity Board (CEB) is losing Rs. 100 million daily and are there any solutions on card to meet the CEB's grave financial crisis?

A: Yes. All our efforts are made to make the CEB stable. But I must say that unless the CEB recover the cost of production of power, it is impossible. A unit of power costs about Rs. 15 to 16 for generation and the CEB is selling it at Rs. 7.80 and for the industries it is less Rs. 8.50. So, as a result, we are selling a unit of power at a loss of Rs. 5. This is because the government does not want to raise the tariff as we do not want to burden the people further.

We know that people are burdened with the high Cost of Living (CoL). If the tariff is raised it will be a further burden to the common man. Therefore, the government has taken a firm decision not to increase the tariff. As a solution, the government has given a subsidy but it is not a 100 percent subsidy. Nearly 50 percent of the cost is now met by the subsidy. However, as a result of the imbalance between the cost of power generation and the low selling price of electricity, the CEB has to bear a tangible loss in generating and providing power to the country. We have informed the government of this situation. If you take telecommunication as an example, people have to pay more now to get telephone facilities. Railway and bus fares have also gone up.

Increasing the prices is essential but it does not mean that we intend increasing the prices of electricity. Prices of almost everything have increased and this is the phenomena not only in Sri Lanka but all over the world. In Asia, the CoL is high. Sri Lanka is also facing the same trend. The loss that the CEB has to bear when generating power is becoming huge. At the beginning of the year, we had prepared our budget on the basis of a litre of diesel being Rs. 55 but it went up last August and now the price of a litre of diesel had shot up to Rs. 78. The Ceylon Petroleum Corporation (CPC) could not provide fuel for the price of Rs. 55 according to the price that we had mentioned in the budget, which we prepared in 2007. So when we informed the government of the need of increasing the tariff instead of the tariff increase the government agreed to pay half of the loss as a subsidy, which amounts to Rs. 6,000 million a month.

But that covers only half of the price of the CPC and the price that we pay to the CPC. We pay Rs. 55 for a litre of diesel, which is Rs. 72 to Rs.80 according to the CPC's prices.

The CEB has to pay the fuel cost by the Independent Power Producers and this is not covered by the government subsidy. If we do not pay their money they will stop generation of power. Those are the problems that we are facing today.

Q: There was a proposal to amend the CEB Act and to bring reforms to the CEB. What is the present situation of these proposals, especially reforms, which were the topic of a hot debate sometime back?

A: The idea of bringing reforms is not totally abandoned. There are certain aspects that we are going ahead with. The Public Utility Commission is vested with certain powers with regard to some provisions of the country like electricity. We will go to Parliament soon. CEB Act will be amended to the extent that it will be subject to the powers of the Public Utility Commission, where certain regulations can be enforced.

Q: The government has instructed to follow the competitive basis when calling tenders. Why does not the Ministry follow non-competitive procedures and call single bidders for some power projects including the wind power project with an Indian company and nine grid sub-stations?

A: Talking about wind power, it is a new concept as far as our country is concerned. The wind potential was there but that was never harnessed. It has been harnessed to a very minor extent where three mega watts of power was generated in Hambantota. Other than that no effort has been made in harnessing wind power. After 2005, we thought we should harness wind as a source of power generation. There are local entrepreneurs who applied and were given the projects but they have not started the projects yet. Then an Indian company came forward. The Economic Development Committee (EDC) which is chaired by President Mahinda Rajapaksa, has decided that the wind power is a source of energy that had not been harnessed and can be harnessed in Sri Lanka. Then this particular Indian company came forward. That is a not a decision taken by the Ministry of Power and Energy but taken by the EDC. Though the Ministry is the implementing point we did not play any role in selection. With the approval by the EDC it was referred to the Cabinet, which granted its approval for the project. The nine grid sub-stations were old and the mini- hydro developers and dendro power developers were complaining about the poor absorbent capabilities of these grid sub-stations. We took immediate steps to improve these with Cabinet approval.

Q: What is the progress of the major power projects kicked off after this government came into power?

A: The main thing is that we cannot wait for long because the country needs power for development. We cannot wait till all the people agree to take decisions. The people who are responsible for taking decisions and those who are responsible for implementing these decisions have not done it even with regard to Norochcholai Coal Power Project, Upper Kothmale Hydro Power Project and Kerawalapitiya Power Project. I must reiterate that most of these projects were started after I resumed duties as the Minister of Power and Energy. My policy is that the country needs power and we cannot allow the country to suffer without power. So, where there is a possibility of generating power we must make use of it. This is the policy that is followed in India. Anybody who is ready to generate power in India, they are welcome and no conditions laid for them if they can come within the government's tariff structure. This does not mean that our government is keen on following India but these countries can be cited as examples for countries which face the problem of not having sufficient power like us and their efforts to illuminate their countries. Our power generation is done at a very high cost as we have not gone for cheap resources for power generation. We could have tapped them 10 to 15 years before and if the coal power project was commissioned in time we could sell power for Rs. 7 to 8. However, because of not implementing such policies we are suffering. In order to implement these we have to take double speed action in power generation now. Power generation comes under my Ministry and it is my responsibility to maintain good supply. Another thing I want to highlight is, I need a speedy implementation process of these power stations as we cannot delay this for years. Constructions of these projects are going ahead well though I have to confront many lethargic elements that dragged the implementation process for long.

Some responsible people are lethargic and they do not care for what is needed. They are not active enough and fast enough. We cannot wait till they come up and do the work. Either we have to wake them up from their slumber or have to go ahead by ourselves. I strongly believe that we cannot run this country this way. We cannot wait till they adopt themselves to our speed. What we need at this juncture is the implementation of these projects for the betterment of the country. And then it is impossible to reach the target within a specific time frame. But now despite these obstacles we work together as a team to complete these power projects as in scheduled.

Q: Is it true that the Ministry is to get a US $ 500 million loan from an unknown investor despite the warnings of the Central Bank (CB) ?

A: Now the CEB, as I said earlier is facing a huge financial crisis. We also owe a huge amount of money to the CPC. And we have also taken a huge overdraft from the Bank of Ceylon (BoC). Finding money to overcome these crises, is the thing we discussed over and over again.

At the same time we got an offer from a bank which is prepared to give us a loan. This proposal was not decided by the Ministry of Energy but the matter was referred to the Cabinet, which referred it to the Central Bank and the Treasury. The Ministry requested the Cabinet to appoint a Technical Evaluation Committee including the officials representing the Central Bank, the Treasury the CEB and the Attorney General's Department to look into the matter of this loan. We also suggested that this committee should study this and then only the CEB will get it. So they can be satisfied with the genuineness. They have to be satisfied with the legality aspect of it and then only we can get the offer. The Ministry is not the authority in approving this loan and on the other hand we do not want to do so. The CB has sent some observations to the Cabinet. But that has two options. In one instance, the CB says that further particulars should be provided to them to study and in the other it says that this should not be pursued because it might be black money. I do not know which version to be followed. These are contradictory to each other where we the proposer is confused. So, we have suggested to get the observations of the next authority - the Treasury.

Q: Is there any delay in the commissioning of the Kerawalapitiya Multi-Fuel Combined Cycle Power Plant, which is to generate 300 mega watts of power?

A: No. There is no delay as such. President Rajapaksa who paid a visit to the construction site was fully satisfied with the progress that we have made upto now and invited the other Ministers to go and see the progress as it is a model to show that while fighting a terrorist war the government proceeds with country's development too.

The turbines costing Rs. 12,000 million for the installation have already arrived. Whoever who have suspicions, or blame that this project is getting delayed, should go and see. They blame us for doing nothing but should not forget that only this government is able to go ahead with implementing these power projects. We agree that there were certain obstacles at the beginning but we have overcome all of them and we are definite that we would be able to complete this project soon.

Q: Meanwhile there is an allegation that the Norochcholai coal power project is now in a slow moving process and this will result of a delay in completing the project?

A: No, it is going ahead well but I agree that there was a little delay at the beginning. We are to complete this project by 2011 but the Ministry is taking every effort to complete the project one year ahead, by 2010. We have adopted some dynamic processes to accelerate the completion.

Q: Several studies have recommended that the natural gas power projects are not feasible for Sri Lanka. What is your comment?

A: We cannot say that natural gas is not feasible to Sri Lanka. The President went to Japan and the Secretary of the Ministry of Energy has signed an agreement to embark on power projects on natural gas. These would be implemented if they are proved feasible to Sri Lanka. Feasibility studies will be done by Sri Lankan engineers and after their recommendations only we will decide on natural gas.

Q: What are the main tasks of the government and what are the targets to be achieved in 2008?

A: The major task is the eradication of terrorism. The government is playing a major role in crushing terrorism and now that has been successfully going ahead. Now hope has been created in the minds of the people that terrorism can be wiped out. It is 90 per cent successful now. It will be successful in the North too and it is one of the major tasks of the government in 2008. Other task is the development of the country. However much we talk about the high cost of living it cannot be brought down unless there is development in the country. The government has now embarked on several development projects to achieve that. I think that these are the two main targets of the government in 2008.

Q: After capturing the Eastern region the government has given priority to develop the East. What can you say about the progress of the projects that are initiated to electrify the East?

A: Yes, electrifying the East is given the priority. In villages where people have not seen light for their lives are now getting electricity and they are happy. These programs are going ahead well.

Q: Are we going for alternative energy sources in 2008?

A: That is the policy of the Ministry and that is why we have created the Renewable Energy Authority with the purpose of establishing a separate entity to identify the potential of the renewable energy sources. By 2015 we are hoping to generate at least 10 per cent of the energy requirement of the country through renewable energy.

Q: Do you have any plans to make the energy sector free of corruption?

A: It is one of my prime goals and I should say corruption is something that you find in every field. If some one says that corruption is there mainly in the energy sector then that someone is trying to blow up the situation out of proportion.

Those who are very critical about the CEB management including the trade unions are always trying to highlight that there is corruption. When you go to eradicate corruption there is not so much of it as it is alleged. We also know that there are corrupt activities but not to the extent they allege. We are taking every step to prevent them.

Q: What about the COPE report which listed the CEB as one of the top state institutions where corruption is taking place?

A: The COPE has been mentioning about this and we have referred it to the AG and the Commission of Bribery and Corruption through the Parliament.

Q: Will there be a Cabinet re-shuffle soon?

A: I do not know and I am also asking the same question.

Q: People appreciate the bold decision taken by the Mahinda Rajapaksa government to crush terrorism. There seems to be a delay in addressing the grievances of the ordinary Tamils through the All Party Representative Committee (APRC). In this situation do you think that the government can solve the national problem parallel to defeating terrorism?

A: Definitely. We must come out with a political solution soon and we should not delay it further. The political solution should be based on the solution that we have already announced to the country - the devolution of power. While terrorism is being eliminated, the Tamil community must be convinced that their rights are recognised and they are able to implement their democratic and fundamental rights within their respective areas. To address these issues political solutions should be introduced as soon as possible. This fact was discussed at the Cabinet this week and the President also agreed with the need of bringing the solutions soon. And within this month he is hoping to get the proposals and by next month the proposals will be submitted to the Parliament.

Q: What do you think about the abrogation of the CFA?

A: There was a proposal to abrogate the CFA for a long time. And this was not an outcome of a sudden decision. I think that the CFA is not followed by either party and in the light of such a situation there is no point of upholding the CFA which is not followed.

Q: As a senior politician how do you see the mis-behaviour of your colleague Minister Mervyn Silva at the Sri Lanka Rupavahini Corporation?

A: I do not condone it at all. I also condemn the behaviour of Minister Mervyn Silva. And he should not go there in the first place and the type of people who had accompanied him when he went to Rupavahini is also a factor that has to be considered. A person of the calibre of a Minister should not accompany those people. There is another matter that needs to be considered. That is when the police went there and brought the situation under control and took the man who had assaulted into police custody and hand-cuffed him, Minister Mervyn was also brought out of the place. And they were manhandled and assaulted. That is not something permitted under the law of this country, because this will allow to take the law into hand and nobody should be allowed to do so. Therefore both aspects should be looked into and the government should take action.

Q: This is not the first time he mis-behaved in this manner and why does the government tolerate Minister Mervyn so far?

A: The government is not tolerating him and the Central Committee of the Sri Lanka Freedom Party (SLFP) has appointed a top level Committee including myself, Minister Siripala de Silva and Governor Alavi Mowlana to look into the incident. A new Disciplinary Board has also been appointed to take action against him.

Q: Do you think that his actions will make the Government more unpopular?

A: That is based on the opinion of the public. What I feel is rather than measuring the popularity as a government we must do what is right.

Q: You are the chief of the SLFP Disciplinary Committee. Are you going to take disciplinary actions against him this time?

A: No. We cannot take action directly. The Disciplinary Action Committee is mandated to follow the instructions of the Secretary of the Party. The mandate emerges once the matter is referred to the Central Committee. The Central Committee will decide any particular matter be referred to the Disciplinary Committee. Otherwise the Disciplinary Committee by itself cannot take any action for any matter. The Party Secretary must refer any matter to the Disciplinary Committee through the Central Committee.

Q: Can the SLFP Disciplinary Committee prevent politicians employing underworld thugs as their bodyguards?

A: Yes. If the Committee thinks that these are not keeping the good name of the Party or is harmful to the Party or the image of the Party, the Committee always can take action. We have already taken some such decisions previously.

Q: Once you have said that if disciplinary actions were taken in previous occasions where the Minister Mervyn went wild he would have learnt a lesson. Why do you think that the Committee failed to punish him?

A: Yes. That is what I say even now. If the correct steps have been taken either he would have been corrected or there would have been some results. Every time the politicians particularly the MPs or a politician of his calibre does a wrong thing it does not mean that we cannot take disciplinary action. But it is not practical and in party politics there are certain things that you have to tolerate.

Q: What is the progress of the inquiry against former Ministers Mangala Samaraweera and Sripathy Sooriarachchi?

A: That is going on. In fact, Mangala wanted some time because he was going out of the country. Now he is back and the Disciplinary Committee will take up the matter next month. At the SLFP Central Committee meeting held at the Temple Trees chaired by President Rajapaksa the newly appointed Disciplinary Committee was asked to take action against former Ministers Anura Bandaranaike, Mangala and Sripathy and also MP Wijedasa Rajapaksa.