Total mismanagement by former regime:

CEB, CPC worst loss-making State institutions

The Ceylon Electricity Board (CEB) and the Ceylon Petroleum Corporation (CPC) which have been white elephants were in a worse predicament during the former regime which carried out unsolicited bids and ran into its earnings by total mismanagement making them among the worst loss-making State entities in the country.

Power and Energy Minister Patali Champika Ranawaka said the story of the CPC is much worse and needs urgent corrective action in all spheres of activity. The Ministry saved around Rs. 500 million from unsolicited bids for the supply of fuel.

“We need to make the fuel procurement procedure more transparent and allow more players to enter the fray for the benefit of the country,” Ranawaka said.The Minister was addressing a technical program on the introduction of electric cars in Sri Lanka, jointly conducted by the Organisation of Professional Associations (OPA) and the Engineers Guild of Sri Lanka last week.

Ranawaka said most of the State institutions need corrective action and added that the path to success is a long and hard and there are many obstacles along the way.

We have made the CEB a financially independent entity without any restrictions from the Treasury since the beginning of this year so that it could manage its financial affairs independently.

“This is only the beginning. Much more has to be done to transform the CEB into a dynamic organisation,” Ranawaka said.

The CPC, CEB, SriLankan Airlines, Mihin Air, Sri Lanka Transport Board (SLTB) and Railways have been incurring year-on-year losses for a considerable period. According to surveys, the loss by the CPC and CEB amounted over two percent of the GDP in 2012.“The CEB has a commendable resource of over 800 engineers, middle level technical officers and staff who could make a vital contribution to the sector provided there is a right climate for them to be innovative,” the Minister said.

He said that due to the operation of costly independent power plants (IPPs) in the past, the country suffered immense expenditure on imports of costly fossil fuel.

“We are in the process of retiring these costly IPP plants . The Ministry saved over Rs. 3,500 million a year by retiring a costly power plant. This is only a minor aspect of financial discipline and management. We need to address many issues relating to efficiency, human resource management, use of resources, driving innovation among the youth who are ready to face challenges,” Ranawaka said.

He said it is a shame that the CEB had to depend on foreign consultants and designers for all most all its major projects although it had an annual turnover of around Rs. 200 billion.

This has to stop and we should encourage indigenous experts to take over from foreign counterparts.The Ministry of Power and Energy hopes to introduce a transparent pricing formula for electricity and fuel soon. This has to go along with innovative financing mechanisms and improved performance.

“The electric vehicle sector needs careful planning and implementation. However, electric vehicles are the future mode of transportation in the world and one cannot get away from this reality. Fossil fuels are fast depleting and a day will dawn when the era of combustion engines will be over,” the Minister said.

Global surveys reveal fossil fuel production will peak and rapidly deplete in the next two decades.Ranawaka said the era of electric vehicles has dawned and it is highly beneficial to the economy and the environment. It will help reduce the carbon foot-print in the country.

-LF