News
Sectoral Oversight Committee exposes CEB costing trick to make huge profits
By Rathindra Kuruwita
The Ceylon Electricity Board (CEB) has significantly overestimated the cost of electricity production and transmission for 2024 and this is reflected in their estimated cost of production, says MP Gamini Waleboda, head of the Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis.
The overestimation is around Rs 140 billion, Waleboda has said, adding that the CEB has recently presented the estimated costs for 2024 to the Public Utilities Commission of Sri Lanka (PUCSL).
“When we look at the cost of production, we see that it has been overestimated by about Rs 80 billion,” he said.
MP Waleboda said that the CEB had also increased the estimated cost of transmission. Over 98 percent of households were connected to the national grid, he said.
“If you look at the cost of transmission in the recent past, it has hovered between 55 and 67 billion rupees. The cost of Rs 67 billion was when we were dramatically expanding the coverage. Now, the network is mature. This year the CEB says the cost of transmission is Rs 132 billion rupees,” he said.
MP Waleboda said that CEB had also significantly overestimated the cost of financing. The CEB’s calculation ran counter to the principles of accounting, he said.
“They have calculated the interest rate using the rates that were prevalent at the height of the economic crisis. This has to decrease. The CEB has also calculated depreciation of assets that have been fully depreciated. This is imaginary expenditure. There are many instances of double counting. The CEB has no proper cost accounting mechanism and therefore officials and policy makers parrot out numbers that someone comes up with,” MP Waleboda said.
Waleboda said the minister of power and energy, Kanchana Wijesekera and senior CEB officials had taken the recommendations of the Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis as a personal affront.
“We are actually trying to help him because the minister needs correct data to make the right decisions. The overestimation is around Rs 140 billion. In 2023, the CEB made a profit of over Rs 50 billion. It made a monthly profit of about Rs 15 billion rupees in January and February 2024.”
Waleboda said the CEB and the Ceylon Petroleum Corporation (CPC) were now profit-making enterprises. However, they were making profits at the expense of macroeconomic sustainability. The two institutions have gone beyond the breakeven point and are now making tens of billions of rupees in profit, the MP said.
“However, the social and macro-economic impact have been adverse. The education of millions of children is adversely affected when a million households are taken off the grid. The manufacturing and agricultural sectors are suffering because of high power and energy costs. To make the CEB profitable, we have undermined our macroeconomic stability, economic expansion, and social wellbeing,” he said, noting that the government must take a holistic view of the economy. The CEB is a part of a wider system and if everything else collapses, the CEB can only last for a short period, he said.
The Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis had met representatives of organisations that earned foreign currency and all manufacturers that produced for the domestic market, he said.
“We are not asking the CEB to continue supplying electricity below cost. We are asking the government to help our manufacturers and the poorest segments. If we ignore the tragedy that unfolds among the lowest strata of society, we will only be asking for a massive social crisis in the coming years,” Waleboda said.
The MP said the Central Bank (CBSL) could do a lot more to help the economy. The CBSL was implementing IMF policies, and losing its grip on the financial sector, Waleboda said.
“Financial institutions are paying a single digit interest for savings, but the interest rates for borrowing are in double digits, over 16 percent in many cases. The banks are making tremendous profits. The CBSL has reduced policy rates several times, but the banks have not passed the benefit on to borrowers. Not even state banks are reducing their loan interests,” he said.
However, the CBSL had played a pivotal role in controlling and reducing inflation which was around 70% in late 2022, Waleboda said.
“There is a lot of talk on making the CBSL independent. This should not mean it should carry out the IMF or ADB programme or act according to the whims of the few people on the monetary board. The CBSL must come up with a monetary policy that is sustainable in the long term and leads to economic development,” MP Weleboda said, noting that according to their calculations millions of US dollars that should be brought back to Sri Lanka are parked in foreign countries by exporters. “The country loses at least 1.2 billion dollars a year because of this, and this is around the income generated by the IT industry”, he said, “There should be an institution to keep a tab on these things.”
Opposition and SJB Leader Sajith Premadasa has alleged that the current government is attempting to suppress freedom of expression and media freedom to lead the country towards authoritarian rule.
In a video message on Thursday (25), Premadasa said that in a democratic country, the four main pillars safeguarding democracy are the legislature, the executive, the judiciary, and the independent media, but, at present, the government is using the police to violate both the democratic rights of the people and the rights of police officers themselves.
He said that the government is working to establish a police state that deprives citizens of their right to access truthful information.
“For democracy to be protected, media freedom must be safeguarded, and space must be given to independent media. Instead, the government is interfering with the independent media process, using the police to suppress and intimidate independent media,” he said.
He noted that even when independent media present their views based on reason, facts, and evidence, the government attempts to suppress them. Such actions, he said, amount to turning a democratic country into a police state. “Do not suppress the voice of the silent majority, the independent media,” he urged.
Premadasa emphasised that independent media represent the voice of the silent majority in the country and must not be suppressed.
“Media repression is a step towards authoritarian rule, and the people did not give their mandate to create an authoritarian regime or a police state. If the government attempts to abolish democratic rights, the Samagi Jana Balawegaya will stand as the opposition against it,” he said.
The Opposition Leader further alleged that the government was interfering with police independence, stating, “Political interference has undermined the independence of the police, making it impossible for them to serve impartially. Suppressing freedom of expression is an attempt to lead the country towards authoritarian rule.”
Premadasa pointed out that the media has the right to reveal the truth, and interfering with that right is a violation of the rights of 22 million citizens.
Vegetable prices at the Peliyagoda Manning Wholesale Market surged to unusually high levels yesterday (26), raising concerns among consumers as the festive season drives up demand. The situation is expected to persist over the next few days, a spokesman for the Manning Market told The Island.
He said a sharp increase in the number of buyers visiting the wholesale market, ahead of upcoming festivities, had resulted in a sudden spike in demand, prompting wholesale traders to raise prices significantly. The price hikes have affected a wide range of commonly consumed vegetables, placing additional pressure on household budgets.
According to market sources, the wholesale price of beans climbed to Rs. 1,100 per kilogram, while capsicum soared to Rs. 2,000 per kilogram. Green chillies were selling at around Rs. 1,600 per kilogram. Prices of other vegetables, including beetroot, brinjal (eggplant), tomatoes, bitter gourd, snake gourd and knolkhol, also recorded unusually high increases.
The spokesman alleged that despite the steep rise in prices, vegetable farmers have not benefited from the increases. Instead, he claimed that a group of traders, who effectively control operations at the wholesale market, are arbitrarily inflating prices to maximise profits.
He warned that if the relevant authorities fail to intervene promptly to curb these practices, vegetable prices could escalate further during the peak festive period. Such a trend, he said, would disproportionately benefit a small group of middlemen while leaving consumers to bear the brunt of higher food costs.
By Kamal Bogoda ✍️
The Hakgala National Botanical Garden, which was closed in the aftermath of Cyclone Ditwah, has been reopened to tourists from yesterday, the Ministry of Environment indicated.
The Ministry said the reopening was carried out in accordance with recommendations and guidelines issued by the National Building Research Organisation (NBRO) and the DisasterManagement Centre (DMC) after safety assessments were completed.
However, due to the identification of hazardous ground conditions, several areas, within the garden, have been temporarily restricted. These include the pond area, near the main entrance, and access roads leading towards the forest park where potential risks were observed. Warning signs have been installed to prevent visitors from entering these zones.
To ensure the safety and convenience of both local and foreign visitors, the garden’s management has introduced a special assistance programme, with staff deployed to guide and support tourists.
The Hakgala Botanical Garden was closed as a precautionary measure during the disaster situation triggered by Cyclone Ditwah. The Ministry noted that the garden has now been safely reopened, within a short period, following remedial measures and inspections, allowing visitors to resume access while maintaining necessary safety precautions.
By Sujeewa Thathsara ✍️
A few showers may occur in the Northern, Eastern and Uva provinces and in Polonnaruwa, Matale and Nuwara-Eliya districts
Sajith warns country is being dragged into authoritarian rule
Wholesale mafia blamed for unusually high vegetable prices
Cyclone-damaged Hakgala Botanical Garden reopened with safety measures
Holiday travellers generate record revenue for expressways
Another casualty from underworld warfare succumbs to his injuries
‘Dates have the highest sugar content to fight Coronavirus’
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