News
Economist: Govt. has not reduced expenditure sufficiently
by Rathindra Kuruwita
The implementation of the IMF recommendations had left the Sri Lankan public resentful, says Premachandra Athukorala, Professor of Economics at the Australian National University.
The government has not reduced its expenditure, and it has failed to spell out what it intends to do, he said. “The IMF itself says this in its latest report. The IMF says there is reform fatigue in the country,” he said.
Prof. Athukorala has said Sri Lanka’s loan instalments that had gone into arrears during the last two years ran into about three billion dollars.
“The longer we take in external debt restructuring, the higher will be the arrears. Sri Lanka’s credit rating has been downgraded and private banks face great difficulties issuing letters of credit because of this,” Prof. Athukorale said, noting that there would be a surplus of about a billion dollars in Sri Lanka’s balance of payments in 2023. However, the country’s foreign reserves are at a historical low.
“The country faces instability. When this happens, money flows out of the country through informal means. In the balance of payments, there is a component called errors and omissions. These keep on rising. This is because money is sent out when the Central Bank relaxes restrictions on moving capital around and through over-invoicing and under-invoicing,” he said.
Prof. Athukorala said that Sri Lanka hoped to get a 30-percent haircut from its creditors. However, so far, they had only agreed to a 20-percent haircut, but the government is not agreeable to that, he said.
“The government’s expenditure is about 200 percent of its income, and 85 percent of it is recurrent expenditure. This year, we reduced the primary deficit by lowering capital expenditure. The IMF does not ask us to cut expenditure directly because it is politically sensitive. However, we need to rationalise our recurrent expenditures as well as increase tax revenue. Most people don’t like taxes because they think the government is wasting money. We need to change this,” he said. (RK)
Latest News
Sun directly overhead Nittambuwa, Algama, Malwana, Aranayake, Meegahakiula and Panamkadu about 12.09 noon today (04)
The sun is going to be directly over the latitudes of Sri Lanka from 28th of August to 07th of September due to its apparent southward relative motion.
The nearest places of Sri Lanka over which the sun is overhead today (04) are Nittambuwa, Algama, Malwana, Aranayake, Meegahakiula and Panamkadu about 12.09 noon.
News
Norochcholai digs into dwindling coal stocks, two units slash generation
Plant’s output cut from 270 MW to 140 MW amidst dwindling stocks; energy analysts warn system remains “at a razor’s edge”
By Ifham Nizam
The Norochcholai coal-fired power plant is now digging into the last dredges of its coal stock, with two operational units forced to slash generation from around 270 MW to just 140 MW on Sunday as the plant ran critically short of fuel, according to independent energy analysts and sources familiar with the National System Operator (NSO).
The sudden reduction of approximately 130 MW in coal generation has once again exposed the fragile state of the country’s power supply arrangements, with the plant understood to have coal stocks sufficient only until Friday night.
“This is not how a coal plant is expected to operate. They are digging up the last dredges of coal from the plant,” an independent energy analyst told The Island.
The analyst questioned why the units had been allowed to reach this stage without earlier intervention, arguing that at least one unit should have been deloaded around 10 days ago to conserve the remaining coal.
Had that been done, the analyst said, the country could also have reduced its dependence on more expensive diesel-fired generation during the period when
coal stocks were being conserved.
The latest NSO generation figures highlight the continuing pressure on the system.
Around 7 p.m. on Sunday, when the night peak was reached, total demand stood at 2,552.7 MW. Coal contributed only 282 MW, while major hydro accounted for 1,215.8 MW and thermal-oil generation for 791.9 MW.
The night peak of 2,552.7 MW was substantially higher than the daytime peak of 2,246 MW, according to the NSO Generation Summary for August 30.
The most immediate concern is the remaining coal stock at Norochcholai.
Sources said the plant has coal only to Friday night, making the timing of the next shipment critical.
The first shipment under the emergency arrangement is expected to arrive on Friday, September 4, but the coal unloading will have to begin on the same day if
the power plant is to continue operating without further significant deloading.
That creates another potential vulnerability, with rough sea conditions posing an additional challenge to unloading operations.
Energy sector sources said that even the arrival of the September 4 shipment would not completely eliminate the danger.
The next shipment under the new coal tender would need to commence unloading around September 15. Any significant delay beyond that could again force the Norochcholai units to operate at reduced output.
“We are still at a razor’s edge”
The independent energy analyst said the situation should not be viewed merely as a question of whether a particular vessel arrives on time.
The situation also means that any further reduction in coal generation could have a direct impact on the use of oil-fired power generation, potentially increasing the cost of electricity generation.
The latest NSO figures already show the important role being played by thermal-oil generation during the evening peak, when demand rises sharply.
The analyst questioned the rationale behind allowing the coal units to continue operating at higher loading until stocks reached critically low levels instead of taking measures earlier to stretch the available inventory.
News
22A: BASL decides against making written submissions after SC refuses to grant it right of reply
The Bar Association of Sri Lanka (BASL) has informed the Supreme Court that it would not tender written submissions in respect of the petitions challenging the 22nd Amendment to the Constitution, which were heard on September 1 and 2.
The BASL said it had initially decided not to make written submissions after being deprived of the right of reply when the Solicitor General, appearing for the State, made submissions and explained the rationale and justification for the Bill.
The BASL pointed out that the Solicitor General, who made submissions at the end of the second day of the hearing, had not made a policy document available to the petitioners.
It also said the petitioners had not been given an opportunity to respond orally to the Solicitor General’s submissions or to address the Court on certain questions raised by the judges during their exchanges with the Solicitor General. (SF)
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