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Mahindananda Aluthgamage and K.D. Lalkantha |
By Mandana Ismail Abeywickrema
The
new Electricity Bill perceived to be the first step
towards privatisation of the electricity sector by a
government that officially shuns it as policy, was
passed in parliament last week.
The
passing of the bill is expected to secure the government
several million dollars in funding from lending agencies
to uplift the country's power sector. Millions of
dollars in the form of soft loans, a grant from the
Asian Development Bank (ADB) and JBIC to the country's
power sector have been in the balance for the past few
years due to the delay in restructuring the sector.
According to opposition legislators, the cash strapped
government in a bid to secure the much needed funds was
desperate to get the necessary legislation passed,
ultimately paving the way for the privatisation of the
country's power sector.
The
bill passed last week has now given legislative effect
to an independent regulator, the Public Utilities
Commission, to regulate the electricity sector.
Public Utilities Commission
The
CEB according to the new piece of legislation would be
assigned to the Public Utilities Commission.
While
the Ceylon Electricity Board (CEB) would continue with
the generation, transmission and distribution of
electricity, private companies too would be able to
enter the country's power sector after obtaining a
license from the Public Utilities Commission.
According to the legislation, the Commission would issue
a licence to private companies where the Sri Lankan
government too would hold a percentage of shares.
However, the legislation passed last week has not
clearly specified the percentage of shares the Sri
Lankan government would have to hold in a private firm
interested in entering the country's power sector.
The
Public Utilities Commission was established in 2002
during the then UNF government, as part of its programme
to introduce reforms to the power and energy sectors.
The
opposition legislators last week highlighted the
similarities between the new piece of legislation and
the policies of the UNP's Regaining Sri Lanka programme
presented during its brief period in office between 2002
and 2004.
Infrastructure development
The
Regaining Sri Lanka programme has stated that priority
action in infrastructure development was to "move
towards achieving a competitive power tariff structure
by working towards the restructuring (through
progressive unbundling) of the CEB and CPC."
As for
power sector reforms, it has been stated, "More private
sector participation in the power sector, a rational
tariff structure and greater competition are needed to
put an end to power crises once and for all.
"A new
Electricity Act has been promulgated in 2002, which
will unbundle the power sector in areas of generation,
transmission and distribution, allow for the creation of
an independent regulator, and provide a transparent
solution to the power purchasing and selling problem.
"In
light of the growing involvement of the private sector
in the provision of utility services, a professional and
autonomous form of utility regulator will be required.
Towards this end, an independent regulatory authority
will be established to oversee the energy utilities,
including issues related to tariff setting, quality
control, licensing, and dispute resolution. The
Regulatory Commission is to be operational by 2003."
Veered away from Mahinda Chinthanaya
JVP
legislator Bimal Ratnayake charged that the government
has veered away from the Mahinda Chinthana policies that
stood against privatisation and has embraced the UNP's
Regaining Sri Lanka programme that has highlighted
extensively the need to unbundle the CEB.
He
said the main aim of Act No. 35 of 2002 was to establish
the Public Utilities Commission, to which all main state
institutions would be assigned.
"The
Public Utilities Commission is the main legal entity
established as the first step towards the privatisation
of state enterprises by the then UNP government,"
Ratnayake said.
However, he said that although the Commission was
established, it was not provided with the legal mandate
to function due to the non-implementation of the bill
introduced by the then UNP government.
According to Ratnayake, it is the new piece of
legislation presented last week that would give legal
effect to the Public Utilities Commission.
Interestingly, the UPFA government, which was in the
opposition at the time the bill to establish the Public
Utilities Commission was presented in parliament on
October 8, 2002, vehemently opposed the UNF government's
move to establish such a commission claiming it to be a
move to privatise electricity in the country.
Regulatory body
Minister Milinda Moragoda who held the portfolio of
Economic Reform and Science and Technology during the
then UNF government presented the Public Utilities
Commission of Sri Lanka Bill to the house.
During
the second reading of the bill, responding to a question
on whether the commission would be a regulatory body for
all public utilities, Moragoda had said, "At the moment
the idea is to have for water and power. As we move
along if we can accommodate others, yes. This is for the
purpose of electricity and water. If there are any other
regulatory areas that come up down the road it is kept
open."
The
Public Utilities Commission according to the then
government was the mechanism to accomplish many goals in
the development of the key sectors in the country.
Minister Dinesh Gunawardena and former legislator Ronnie
de Mel who spoke for the opposition in parliament
against the establishment of the Public Utilities
Commission in 2002 had said that it was a move to
privatise the country's electricity and water sectors.
"This
may not be privatisation today, but this is the first
step towards the eventual privatisation of power, the
privatisation of electricity in the country," de Mel has
said.
Cautious of the consequences
Gunawardena has said that the government should be
cautious of the consequences it would have to face and
the role of a regulator in the event a large-scale
foreign company took hold of the country's power sector.
He has
also said that the country would be in dire straits if
the water and electricity sectors in the country were
also subjected to the same fate that befell the Gas
Company.
Be
that as it may, the present government members who
opposed the establishment of the Public Utilities
Commission in 2002 while in the opposition last week
ensured that the new Electricity Bill was passed with a
thumping majority.
The
opposition last week also alleged in parliament that the
new bill was prompted by the need to secure foreign aid
that was pegged to the introduction of reforms to the
country's power sector. A charge that the government
accepted.
Asked for cooperation
JVP
parliamentarian and trade union wing leader K.D.
Lalkantha said in parliament during the second reading
of the new Electricity Bill that the President during a
discussion with the CEB union representatives had asked
for their cooperation as the government was in need of
the foreign loans that were pegged to the restructuring
of the CEB.
Power
Minister Mahindananda Aluthgamage in his speech admitted
that the government was in need of the foreign loans on
concessionary terms to uplift the country's power
sector.
He
said that given the present situation in the country, it
was advantageous for the government to opt for soft
loans from lending agencies at low interest rates than
borrow money at commercial rates.
The
UPFA government since 2004 has tried tirelessly to
secure foreign funding amounting to billions of dollars
from the ADB and JBIC for the power sector.
The
main requirements of the ADB and JBIC were similar and
they included independent regulation of the power
sector, autonomy of the sector through the establishment
of new companies under the Companies Act, introduction
of competition to ensure increased efficiency within
each functional area of the power sector, development of
appropriate policy, legal and regulatory framework to
ensure balanced growth of the power sector, enhancing
sector efficiency by establishing a commercial and
competitive business environment, and the improvement of
financial viability of the sector.
Strategic business units
However, the lenders were also not agreeable to the
establishment of strategic business units (SBUs).
Since
then the government has on many occasions tried to push
the CEB reforms amidst protests by the trade unions and
former government allies, the JVP.
Even
after the defection of the JVP, the UPFA government
pursued its efforts to introduce reforms to the CEB. The
many agitations and the protests held by the JVP
affiliated unions against the move to restructure the
CEB, which they claimed to be another word for 'privatisation,'
compelled the government to shelve its reforms proposals
temporarily.
The
piece of legislation passed in parliament last week has
now opened up the country's power sector and as claimed
by many opposition legislators, moved towards the
privatisation of the CEB and the electricity sector.
Ironically the opening of the country's power sector has
come under a government headed by President Mahinda
Rajapakse, who in his Mahinda Chinthana policy statement
stated, "I will not privatise the Ceylon Electricity
Board. New management approaches will be introduced with
the consensus of all stakeholders including trade
unions, to improve work efficiency."
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"No privatisation of CEB"
Power and Energy Minister Mahindananda Aluthgamage
says that the new Electricity Act would not in any
way bring about the privatisation of either the CEB
or the power sector.
He
said that the present administration headed by
President Mahinda Rajapakse was opposed to
privatisation. "Neither the electricity sector nor
the CEB will be privatised."
According to Aluthgamage, the CEB would continue to
perform its role in the generation, transmission and
distribution of electricity in the country without
any change.
Explaining the bill that was passed in parliament
last week, Aluthgamage said that the CEB would be
brought under a regulator, the Public Utilities
Commission that would regulate the sector, address
the issues faced by the consumers and adopt a fare
tariff system.
Aluthgamage explained that under the existing
system, independent power producers sell electricity
to the CEB that purchases it at various prices.
However, according to the new legislation, the
Commission would determine the price in future.
He
said that any company involved in the country's
power sector would have to do so with a licence from
the Commission.
"Under the new legislation, a foreign company cannot
be given a power project if the Sri Lankan
government does not have any shares in the
respective company," he said.
According to Aluthgamage, a large number of
consumers have complained about the CEB and the
institution has so far not put in place any
programme to look into the welfare of the consumers.
Speaking of the funds from the lending agencies, he
said that it would be beneficial to the government
to accept soft loans and grants from the ADB and
JBIC rather than opting for commercial loans.
"The government is to get US$ 250 million from the
ADB and 15%-20% of that is a grant and the rest is a
soft loan with a grace period of 10 years," he said.
When asked if the loans were subject to any
conditions, Aluthgamage said the lending agencies
had not put forward any conditions and that the
funds were held up due to the inefficiency of the
CEB as an institution.
He
also said that while the CEB had 4.5 million
consumers, 35% of them had low voltage. "This means
there is a lot of upgrading that is needed in the
country's power sector. That would require about US$
1,000 million," he said.
"Privatisation coming"
The JVP last week voiced concern over the possible
loss of employment for about 14,000 CEB workers.
According to the JVP, the Electricity Bill that was
passed in parliament last week has paved the way for
the privatisation of the power sector, creating an
unstable situation in the CEB.
JVP Parliamentarian K.D. Lalkantha said that the
gradual privatisation of the electricity sector and
its impact on the CEB would jeopardise the jobs of
14,000 CEB employees.
Power Minister Mahindananda Aluthgamage however
denied the claim made by the JVP, adding that the
CEB was in fact looking at recruiting an additional
2,500 employees to its current work force including
500 engineers.
He
said that the CEB had only 500 engineers for the
past few years to address the country's rapidly
increasing electricity requirement. "We have only
500 engineers currently and that is not enough," the
Minister said.
New Cowboy Justice emanates from the ICC
On
March 5, the world witnessed a new form of criminal
justice when the International Criminal Court (ICC)
sitting in The Hague issued a warrant for the first
time for the arrest of a sitting head of state, the
President of Sudan Omar Al Bashir. The ICC created
by the Statute of Rome in 2002 works under the aegis
of the United Nations Security Council and has the
trappings of an international court of justice.
Membership in the ICC is voluntary, and comprises
106 members of the United Nations. But some key
members of the UN are not in the ICC and this
includes: America, India and Israel.
It
means that while former heads of state of other
countries like Slobodan Milosevic of Serbia, Charles
Taylor of Liberia and now Omar al Bashir can be
tried by the ICC for crimes such as genocide,
torture, rape, pillage and other crimes perpetrated
against civilian populations, heads of state who
opted to be out of the ICC can sit pretty in their
presidential palaces untouched by the law of the ICC.
Not only presidents but even those in the lowest
ranks of the armed services of countries that are
non members need not be bothered by ICC rulings
Since most of those brought before the ICC has been
members of black states save those of Serbia it has
earned the label of being a White Man's Court,
already.
Powers of the ICC
The ICC has no powers of arrest or a police force
to serve its warrants. Only those who surrender
themselves to court or are produced before the ICC
by foreign governments will be subject to their
jurisdiction.
This means that President Omar al Bashir can move
freely in his own country but if he strays beyond
its border and is arrested by some other forces and
brought before the ICC, he can face charges as an
accused. Some jurists have pointed out that under
this set up, a plane in which the Sudanese president
is flying can be forced to land in a foreign
country and his arrest be made. This is indeed a new
form of cowboy justice.
Support of the people
While the charges against President Omar al Bashir
were being read out in The Hague in Sudanese cities
like Darfur and Khartoum, people in their thousands
took to the streets calling for 'Jihad' against
America and for the head of Moreno-Ocampo, the chief
prosecutor of the ICC.
No
doubt the vast numbers of rebel groups fighting the
Sudanese regime too would be calling for 'Jihad'
against al Bashir in their own regions and would be
cheered by the issue of the warrant against him but
even Western reports conceded that al Basheer has
the support of a substantial section of the Sudanese
people.
The anticipated charge of genocide is not in the
warrant of arrest, the prosecutors claiming that
there was insufficient evidence. But Omar al Basheer
is being charged for directing many crimes against
humanity such as murder, torture, rape and many
more.
Omar Basheer on Wednesday also staged a
demonstration of military power in Darfur with an
armoured column driving through town with trucks and
two jets screaming over. Reports said that this was
to demonstrate to rebel groups and others that he
was in power.
Arabs Vs Blacks
During the six years of fighting when rebel black
African groups in the south of the country took to
arms against the Arab dominated Sudanese government
alleging discrimination and neglect an estimated
300,000 people had died in the fighting or of
diseases claim the UN and Western humanitarian
organisations. The Sudanese government maintains
that the number dead is about 10,000.
Last week the government ordered six 'humanitarian'
organisations including CARE International and
Oxfam to cut down their activities and pull out
their international staff out of 10 camps. This
could result in adverse effects on 'one of the
largest humanitarian operations' that is being
conducted, some workers for these organisations was
reported as saying.
The immediate impact on the issue of the warrant
could lead to destabilisation of Sudan and also
neighbouring regions, spokespersons for the African
Union and the Arab league have said. Both these
organisations had been trying to persuade the United
Nations Security Council to delay the indictment on
al Basheer and serving of the warrant for at least
one year. A general election is due in Sudan this
year which could lead to further political
destabilisation.
Justice or stepping up suffering?
What happens next would depend on the reaction of
the strongman of Sudan to the warrant of the ICC.
The ICC, he had steadfastly maintained, has no
jurisdiction in Sudan and on Wednesday he had said
that they could 'eat the warrant.'
Are the UN and Western nations helping the suffering
people of Sudan in trying to bring' justice to the
land' or making it worse for them? |
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