Chairman of the Public Finance Committee Dr. Harsha de Silva, MP, yesterday (31) said that the National People’s Power (NPP) government was going ahead with a controversial move to pass on the massive losses caused by the coal scam to the public. The government also intended to recover USD 2.5 (approximately Rs 800 mn) lost by the Treasury from the people by introducing an amendment to the Budget, the Opposition lawmaker alleged.

Dr de Silva said that the government had been compelled to increase the supply of diesel for the oil-fired power plants to meet the Norochcholai generation shortfall due to the use of substandard coal.

Responding to The Island queries, the former State Minister said that regardless of repeated assurances that electricity consumers wouldn’t be burdened for the lapse on their part, the government, in writing, has assured the International Monetary Fund (IMF) to recover the losses from the public. This came to light after the IMF released the Letter of Intent submitted by the government following the completion of the combined Fifth and Sixth Reviews under the Extended Fund Facility (EFF) programme to receive USD 695 mn.

Commenting on the specific assurance as regards the upward revision of fuel prices and electricity tariffs, MP de Silva pointed out the government’s assurance of its commitment to cost-recovery pricing for fuel and electricity meant that subsidies provided to ease the burden on households and businesses would remain within budgeted limits and be phased out by the end of September 2026.

Welcoming the USD 695 mn IMF loan, MP de Silva said that in terms of the agreement between the government and the IMF, the relief would end once Rs 100 bn allocated to provide relief was spent on subsidies on fuel (Rs 57 bn), electricity (Rs 15 bn) and the rest on ‘Aswesuma’ social welfare scheme and fertiliser.

MP de Silva said that the crisis should be examined taking into consideration that Sri Lanka paid very high prices to procure fuel in the wake of the continuing turmoil in West Asia. He noted that having perpetrated a coal scam the government could not under any circumstances absolve itself of responsibility for the skyrocketing electricity tariffs.

Commenting on the Sri Lanka-IMF agreement, lawmaker de Silva lambasted the government for utterly chaotic and poor management of the economy. Severe criticism was directed at the government over the rapid depreciation of the rupee against the USD and the NPP’s pathetic performance. Amidst speculation that De Silva may switch allegiance to the NPP, the MP also posted a video in which he flayed the government alleging the NPP couldn’t take forward measures taken by former President Ranil Wickremesinghe.

MP de Silva explained how the people would end paying for the theft of USD 2.5 by way of an amendment to the Budget. The MP told The Island that assurance meant that the government acknowledged that there was no hope of recovering USD 2.5 mn though they talked of investigations and progress being made. De Silva called for a combined Opposition effort to pressure the government to act responsibly in the face of growing challenges.

The government couldn’t lie as the relevant IMF report and the government letter of intent were in the public domain, Dr de Silva said.

by Shamindra Ferdinando