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Sectoral Oversight Committee exposes CEB costing trick to make huge profits

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MP Waleboda

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.”



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CP asks whether MoU with US a precursor to SOFA

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Dr. Weerasinghe

The Communist Party of Sri Lanka (CPSL) has asked whether the NPP entered into a military agreement with the US as a condition for reduction of tariffs and precursor to signing SOFA (Status of Forces Agreement).

CPSL Leader Dr. G. Weerasinghe told The Island that the US had almost succeeded in finalising SOFA during the Yahapalana administration (2015-2019). On behalf of the party, Dr. Weerasinghe yesterday (18) issued the following statement: “We strongly condemn the NPP government for entering into a new military Memorandum of Understanding with the United States National Guard under the so-called State Partnership Programme (SPP). This agreement between the Sri Lankan Armed Forces and the Montana National Guard represents another step in the militarisation of the ‘Indo-Pacific’ and the erosion of Sri Lanka’s sovereignty.

The new US–Sri Lanka MoU formalises cooperation on a wide range of military activities: joint training, maritime surveillance, air operations, and disaster-response integration between the US National Guard and the Sri Lankan Armed Forces. The agreement should be seen as a pretext for embedding US military structures within Sri Lanka.

This MoU has been signed in a context of heightened US militarism, including Washington’s open threats of aggression against Venezuela and complicity in the Israeli genocide in Gaza. Moreover, this is the second military agreement reached by the NPP government, following the earlier India–Sri Lanka defence MoU whose contents remain entirely concealed from the public.

There are critical questions that every Sri Lankan must ask:

Was signing this agreement a political condition for the reduction in tariffs?

Is this MoU a precursor to signing a Status of Forces Agreement (SOFA) with the United States?

Will Sri Lanka’s military, naval and air force infrastructure facilities, as well as Sri Lanka’s ports and airports, be placed at the disposal of the US war machine?

Is Sri Lanka to be a pawn in US military aggression in Asia?

The CPSL reaffirms that Sri Lanka must be a non-aligned, sovereign country. We call on the NPP government to immediately disclose the content of all military agreements it has entered into, halt further defence cooperation with foreign powers, and place national security decisions under democratic scrutiny.

Further, we call upon all anti-imperialist and patriotic forces to come forward to protect the non-aligned status and sovereignty of the country.”

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NPP going ahead with move to abolish MPs pensions

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The Attorney General has cleared the draft of a Bill seeking to abolish pension entitlements granted to MPs and their spouses.

The Cabinet of Ministers at a meeting chaired by President Anura Kumara Dissanayake has given the go ahead to repeal the Parliamentary Pensions Act No. 1 of 1971.

The Legal Draftsman has prepared the Bill aimed at abolishing the pension entitlements granted to Members of Parliament and their spouses.

Government sources said that the proposal, presented by the Minister of Justice and National Integration to publish the Bill in the Government Gazette and submit it to Parliament, for approval had received the Cabinet endorsement.

Earlier some ex-MPs opposed the move. A group, styling itself as ex-MPs Collective, declared that it was contemplating legal action in case the government moved to do away with MPs’ pension scheme.

Minister and Cabinet spokesman Dr. Nalinda Jayatissa is on record as having said that if any ex-MP found it difficult, he or she could, like any other citizen, seek assistance through government welfare programmes, such as Aswesuma.

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Pathfinder demands early action by Colombo to halt ecological disaster being caused by Tamil Nadu in Palk Bay, Gulf of Mannar

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Recently, Kachchativu Island has attracted attention not only from fisherfolk of India and Sri Lanka but also from political leaders of both nations and the judiciary. President Anura Kumara Dissanayake’s visit to Kachchativu in September marked a significant milestone. For the first time in history, the leader of Sri Lanka expressed interest in the ongoing debate over the island — an issue settled decades ago after lengthy negotiations. Meanwhile, India’s Chief Justice Surya Kant, who was in Colombo just weeks before his appointment, while not explicitly mentioning Kachchativu or illegal fishing activities by Indian fishers in Sri Lankan waters, emphasised that environmental cooperation is not a matter of charity or diplomacy; it is a necessity for survival.

Focusing on Palk Bay and the Gulf of Mannar, which are currently under severe stress from overfishing, destructive trawling, and unregulated coastal activities, as well as recurring confrontations between Indian trawlers and Sri Lankan fishers, he said the situation exemplifies a deeper ecological tragedy-competition for an exhausted resource base. Looking ahead, he added that “the time has come for India and Sri Lanka to pioneer a regional model of environmental constitutionalism.” Among the suggestions he made were establishing a Joint Commission on Marine Ecology and creating data-sharing protocols for pollution and fisheries management between the two countries.

It has been over half a century since India and Sri Lanka established the International Maritime Boundary Line (IMBL) through two bilateral agreements in 1974 and 1976. These agreements—signed, ratified, and recognised internationally—not only defined sovereign maritime boundaries but also definitively confirmed Sri Lanka’s ownership of Kachchativu Island once and for all. These two agreements did not provide for traditional fishing rights for Indian fishermen to fish in Sri Lankan waters. Following these agreements, Sri Lankan fishermen withdrew from their traditional fishing grounds around the Wadge Bank, located south of Kanya Kumari and the southern part of Pedro Bank, north of the Jaffna Peninsula, which came under Indian control. However, Indian fishermen have continued to demand “traditional fishing rights” in Sri Lankan waters.

Despite these agreements, reached after lengthy and intense negotiations, the issue of Kachchativu and illegal fishing persists, not due to any ambiguity in law or diplomacy, but because of a calculated political and economic interest in sustaining them. Tamil Nadu’s persistence in raising the issue is less about sovereignty and more about securing access to the rich fishing grounds around Kachchativu — and, unsurprisingly, far beyond that island.

According to reports this year, by mid-July, Sri Lanka had detained 24 Indian trawlers and taken into custody 181 fishermen for illegally entering Sri Lankan waters, fishing without licences, and engaging in bottom trawling. On 5th, 6th and 9th August, 31 fishermen were taken into custody, and on 28th September, another 12 were apprehended. These arrests continued in October, netting 47 fishermen and five trawlers, and in November, 49 fishermen and five fishing vessels.

The Real Issue: Industrial-Scale Poaching

Although Tamil Nadu’s claims suggest the dispute centres on fishing rights near Kachchativu, Indian trawlers frequently encroach into Sri Lankan waters well beyond the vicinity of that island. Their illegal activities have been observed along the northern, north-western, and even eastern coasts of Sri Lanka. It appears that Kachchativu is merely a distraction; the real issue lies in the pursuit of unsustainable and illegal bottom trawling in Sri Lankan waters, driven by profit.

Bottom trawling harms the marine environment. It not only harvests mature fish and prawns but also damages seabed habitats, kills juvenile marine life, and creates wasteful bycatch, accounting for about 30 per cent of the total catch. The damage is long-lasting and may take decades to repair, if it can be repaired at all. The fish catch in the northern peninsula, which was 35,000 MT in 1995, dropped to 17,000 MT in 1923—once a thriving industry in the conflict-affected Northern Province—serves as a silent reminder of the destruction caused.

Political Opportunism Across the Palk Strait

When a few of the hundreds of Indian trawlers that trespass into Sri Lankan waters are seized and the offenders are arrested, protests flare up in Tamil Nadu, from where most of the intruders originate. These protesters appeal to the state government, which then petitions New Delhi, demanding decisive action to recover Kachchativu Island. What took place during the 2024 Lok Sabha elections was turning Kachchativu, a non-issue, into a political football, not to score goals but to garner votes.

Sri Lanka, by comparison, has remained notably restrained and consistent. Over the past fifty years, the only activities undertaken by the Sri Lankan state on Kachchativu Island have been the renovation of St. Anthony’s Church and the organisation of annual church celebrations held in March, attended by pilgrims from Tamil Nadu and Sri Lanka.

Time for a Science-Based Solution

By the way, what has Sri Lanka done in the past half-century since asserting its rightful claim to the island? Absolutely nothing! That is strange behaviour after extensive, painstaking negotiations over the maritime boundary and the ownership of Kachchativu. Is it due to a lack of imagination or simply lethargy?

Although sovereignty over Kachchativu has been established, concerns about the health of the Palk Bay ecosystem persist, as Indian Chief Justice Kant highlighted. It is now essential to shift the debate from profits and politics to science and sustainability. Sri Lankan institutions must take the lead in achieving that goal.

Several years ago, the Pathfinder Foundation proposed establishing a marine research station on Kachchativu Island to make productive use of the currently barren land. This could be realised through collaboration with national organisations such as the Department of Fisheries, the National Aquatic Resources Research and Development Agency (NARA), and Sri Lankan universities. India has numerous research stations along its coastline, including regional centres of the Central Marine Fisheries Research Institute (CMFRI), the Gulf of Mannar Biosphere Research Units, and others. A research station in Kachchativu, among others, could:

Quantify the impact of illegal bottom trawling.

Monitor marine biodiversity and ecological degradation.

Document migratory patterns and spawning areas.

Make recommendations to arrest the deterioration of marine ecosystems and improve fish stocks.

Facilitate dialogue grounded in scientific evidence.

The old argument — that Kachchativu lacks basic facilities like power, water, and sanitation — no longer holds water. Today, solar power, desalination units, Battery Energy Storage Systems (BESS), and environmentally friendly sanitation systems are both cost-effective and easy to deploy. The island, covering 1.15 sq km, though small, is large enough for a low-impact scientific outpost and modular research laboratories to research and develop proposals to enhance fish stocks in the area.

Furthermore, research carried out at this station could be shared with Indian counterparts to enhance understanding of sustainability, transparency, and scientific diplomacy. A well-organised, collaborative framework could establish joint marine conservation initiatives and even future agreements for seasonal, well-regulated artisanal fishing that does not involve bottom trawling.

Conclusion: Act Before It’s Too Late

India and Sri Lanka could benefit greatly from maritime cooperation and avoid substantial losses resulting from ecological collapse and ongoing bilateral tensions. Instead of insisting on revisiting a settled agreement, both countries—especially their coastal communities—would gain more from science-based management of the Palk Bay ecosystem.

Sri Lanka must avoid allowing political expediency to jeopardise regional stability and marine sustainability. It should exercise decisive leadership to seize the current opportunity. Pathfinder Foundation remains ready to help steer that course, grounded in legal principles, supported by scientific evidence, and driven by long-term national interests.

This is a Pathfinder perspective. Can read more on the web www.pathfinderfoundation.org and communicate with us at pm@pathfinderfoundation.org.

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