With the unprecedented success of the
Jana Bala Meheyuma campaign, the UNP last week decided to up
the tempo against the........
prescription for ailing CEB
Wickremesinghe, Chandrika Kumaratunga, Wimal Weerawansa
and Mahinda Rajapakse
With the unprecedented success of the
Jana Bala Meheyuma campaign, the UNP last week decided to up
the tempo against the government calling for presidential
elections in November even as President Chandrika Kumaratunga
made one last desperate attempt to change the executive
presidential system through parliament.
Time, Kumaratunga knows, is fast
running out and in a last ditch effort to lobby all shades of
opinion within parliament for a constitutional manoeuvre, she
hit all round the wicket hoping against hope the TNA, JVP and
the JHU can be persuaded to support a change in the executive
Towards this end, in a načve
political attempt to soften the TNA and the LTTE, the
President in a statement issued Thursday blamed the violence
in Trincomalee that is threatening the fragile ceasefire
agreement on the opponents of the Post-Tsunami Operations
Management Structure (P-TOMS).
Notwithstanding the fact several
security forces personnel were injured in grenade and other
attacks by the LTTE, the Commander in Chief of the Armed
Forces and Defence Minister, Chandrika Kumaratunga went on
record stating the violence was "precipitated by the
assassinations of several senior unarmed political cadres of
the LTTE in their Trincomalee office earlier this week."
Not stopping at that, the President
also had this to say - "At a time when the government of
Sri Lanka has taken the momentous and historic decision to
commence working together with all stake holders in the post
tsunami reconstruction effort in the north and east through
the P-TOMS, it is regrettable but not entirely surprising that
opponents of the same would seek through various means,
including orchestrated violence, to disrupt the conflict
transformations process, desired by the vast majority of the
people of Sri Lanka."
Thus, whilst absolving the LTTE of any
blame, the President has attempted to shift the blame on the
violence in Trincomalee to the opponents of the P-TOMS -
namely the JVP, JHU and the Sri Lanka Muslim Congress.
At the same time, in a bid to appease
the JVP and JHU, the President also directed the gazetting
last week of the Anti Conversion Bill, hoping possibly that it
would endear the two extremist parties to her and help
maintain the balance in parliament. The Supreme Court order on
the P-TOMS in this context would have also helped even
superficially to appease the JVP and the JHU to an extent.
With the stage thus set, the
President's confidant, national list MP, Wijedasa Rajapakse on
Thursday submitted to parliament two constitutional amendments
providing for changes in the executive presidential system as
well as electoral reforms.
Amendments to the constitution
Terming it the 20th Amendment to the
Constitution, Rajapakse has called for the repeal of Article
30 (2) of the Constitution, which provision provides for the
election of the president by the people.
In taking away the power of the people
to elect the President, Rajapakse proposes that the president
be elected by the members of parliament through a secret
Furthermore, Rajapakse proposes in the
amendment that the executive powers of the people including
the defence of Sri Lanka be exercised by the president, prime
minister and the cabinet of ministers, as opposed to the
president as stated in the present constitution.
He also states in the amendment, the
speaker of the house will act for the president in the event
the holder of the office of president is unable to perform his
functions by reason of illness, absence from Sri Lanka or any
What the amendment seeks to do
effectively is pave the way for Kumaratunga to return to
parliament and be either elected president with reduced powers
or continue as a powerful prime minister within the new
In a further amendment proposed titled
the 21st Amendment to the Constitution, Rajapakse moots a
change in the electoral system providing for a 241 member
House, of which 168 will be directly elected from
parliamentary electorates with the balance 73 elected on a
proportional representation basis.
With that amendment, whilst the Tamil
political parties would be in a position to increase their
numbers in the House, it would effectively decimate the JVP
and the JHU, which parties can only hope to vie for the 73
slots on the proportional representation basis.
Thus, the only way the JVP can survive
in such a system is by forming an alliance with the SLFP lest
it be reduced to about 10 seats in parliament.
Having submitted the amendments,
Rajapakse spoke to several UNP MPs soliciting their support
and indicated both the JVP and the JHU had agreed to back the
But this bait the UNP was not prepared
to bite and no sooner the amendments were brought to his
notice, UNP Leader Ranil Wickremesinghe rejected it out of
hand, making the entire manoeuvre an exercise in futility.
Wickremesinghe in fact told Chief
Opposition Whip, Mahinda Samarasinghe to communicate to
Rajapakse that the UNP will not be considering any amendments
to the constitution in relation to electoral reforms or the
executive presidency until the presidential election is held
as scheduled in November.
On the contrary, at the UNP's political
affairs committee meeting on Wednesday, July 13 the party was
all gung ho ready to take the fight to the President's
doorstep if any attempt was made to postpone the presidential
At the meeting called by Wickremesinghe
and attended by senior members including Deputy Leader Karu
Jayasuriya, Chairman Malik Samarawickrama, Tissa Attanayake,
G.L. Peiris, Mahinda Samarasinghe and Kabir Hashim, it was
decided to extend the agitational campaign from August.
The political affairs committee also
decided that a 'petition drive' calling for presidential
elections should be launched house to house from August, with
back up campaigns in all towns.
With the strategy for the follow up
action planned, the political affairs committee focused on
Prime Minister Mahinda Rajapakse's tsunami funds
misappropriation scandal, where the unanimous opinion was that
the party should call for a full scale investigation.
The UNP Leader himself pointed out that
monies received by the Prime Minister cannot be transferred
out of state control into private hands since it tantamounts
to not only criminal misappropriation but also a criminal
breach of trust against public property.
"When I was prime minister, Prima
gave a donation of Rs. 25 million in 2003 to mark their 25
year anniversary in Sri Lanka and asked me to use it for any
purpose I saw fit. I deposited it to a parliament scholarship
fund and is now under the control of Prime Minister Rajapakse.
It did not go into a private account. I do not know whether
that money was used for the purpose for which it was
deposited," Wickremesinghe said.
The UNP Leader also referred to Finance
Minister Sarath Amunu-gama's statement in parliament and said
according to that statement there were only three official
accounts and the 'Helping Hambantota' private account was not
one of them.
Continuing Wickremesinghe said The
Sunday Leader had presented the facts meticulously with
documentary proof and the defence submitted by Rajapakse had
also been demolished.
Said he, "In this backdrop we
cannot be silent, especially when tsunami victims are still
languishing in makeshift tents and the monies given are
deposited in a private account and gathering interest. Even
S.B. Dissanayake called me today and said to pursue this case
With Wickremesinghe's comments
receiving unanimous approval, the matter was also placed
before the UNP working committee on Thursday, July 14, where
once again it was decided to pursue the case in all available
Wickremesinghe in fact referred to a Rs.
25 million donation made by Unilever to the 'Helping
Hambantota' fund as detailed by Prime Minister Rajapakse and
asked whether it was possible a multi national company could
have done so.
"According to the Prime Minister,
Unilever has given Rs. 25 million only for Hambantota.
Unilever products are sold in all districts affected by the
tsunami and in fact more of their products are sold in several
of the other districts affected by the tsunami. MPs from the
affected districts must go in delegation to Unilevers and ask
for funds to help their districts as well. Otherwise say the
people will boycott their products because of the
discrimination," the UNP Leader said.
Taking the cue from Wickremesinghe,
UNP's Hambantota District MP, Sajith Premadasa on Friday wrote
to Unilever seeking assistance for the work he is doing in the
area in view of the fact the Premier is yet to use any of the
monies given him by the company.
Kadirgamar violates the law
The Prime Minister apart, Colombo
District MP, Ravi Karunanayake pointed out to the working
committee Foreign Minister Lakshman Kadirgamar too had
violated the law by providing his wife a per diem from Foreign
Ministry funds every time she travelled with him in addition
to the ticket payments.
"When questioned Kadirgamar said
there was a circular authorising such payments but I spoke to
the Foreign Secretary, Palihakkara, today and he said there is
no such circular. He said there was a general circular
covering per diems but it did not cover spouses of the
ministers. It was also confirmed Kadirgamar's wife does not
have any official status in the Ministry," Karunanayake
The MP said as such, whilst taking
action against the Prime Minister, the party should also move
against Kadirgamar, a proposal for which the UNP Leader gave
the green light.
Accordingly, the UNP Leader authorised
the complaint against Prime Minister Rajapakse to be made
Monday, July 18 with the CID followed by the complaint against
the Kadirgamar duo. The complaint is to be lodged by Kegalle
District MP, Kabir Hashim tomorrow.
And on Thursday, July 14, former
Attorney General, Tilak Marapone drafted the complaint against
Rajapakse as directed by the party and submitted it for the
consideration of the leadership and it was duly approved.
Despite this looming crisis confronting
the Prime Minister, he was focused on capturing the SLFP's
presidential election nomination and had a hurried but secret
meeting last week with Minister Mangala Samaraweera, JVP
Propaganda Secretary Wimal Weerawansa and Ruwan Ferdinands at
the residence of a Tamil businessman prior to leaving for a
family engagement to India. The Premier was visiting India to
attend the home coming of his brother Basil's daughter who
married an Indian national.
At this secret discussion, Minister
Samaraweera had stressed the importance of Rajapakse being
nominated the SLFP presidential candidate and the steps needed
to be taken to ensure a speedy decision.
Samaraweera had said to achieve this
objective it was important to neutralise Anura Bandaranaike
and the way to do so is by offering him the premiership in the
event of Rajapakse winning the presidency.
He had further said if Rajapakse agrees
to amend the constitution upon winning and grant some of the
powers of the executive president to the prime minister, there
was a possibility Bandaranaike will pull out of the race and
support Rajapakse's candidature.
If that was the case, the President's
support will be reduced to four or five deputy ministers and
she would be weakened in the party as well, it was also said.
Rajapakse however did not agree,
stating Ministers Nimal Siripala de Silva, Maithripala
Sirisena and Ratnasiri Wickremanayake too were expecting to be
appointed prime minister under his presidency and naming
Bandaranaike would see them rallying behind Kumaratunga.
Samaraweera was not convinced. He said
the history of the SLFP shows all members gravitate to the
centre of power and Rajapakse need not fear any divisions.
He went on to say it was the same
strategy which saw Chandrika Kumaratunga without any title in
the party assuming the leadership.
JVP support for PM
Supporting Samaraweera was Wimal
Weerawansa. Said Weerawansa - "We must ensure the
presidential election is held this year and Kumaratunga's term
ends by December 2005. Both the President and the government
are losing ground by the hour and the people are becoming
increasingly disillusioned. With each passing moment the rift
between the SLFP and JVP is also widening. Therefore the only
way to stem the tide is by nominating Mahinda Rajapakse as the
Added he - "If that happens, we
can tell the country we have come to an understanding with
Mahinda. We can even sign an agreement. But to do all this the
Premier must keep a straight backbone and take decisions.
Therefore, either in a good or bad way, the Prime Minister
must start his presidential campaign straightaway both within
the party and the country."
Not wanting to take the battle head on,
Rajapakse said irrespective of all the issues raised, the
party machinery was in Kumaratunga's hands and without it,
there was little he could do to launch any campaign.
Shot back Samaraweera, "That is
why you will have the JVP machinery at your disposal."
Continuing, Samaraweera said he has
already made preparations to set up a campaign secretariat
with the party media machinery also under his control.
Given this backdrop, Samara-weera
pointed out it was difficult for the President to control the
campaign levers and if they worked out the strategy carefully
she could be checkmated.
With those words, Rajapakse was swayed
and agreed to launch his campaign on his return from India,
kicking it off initially with a poster blitzkrieg.
In the midst of all these developments,
the Supreme Court on Friday added a new dimension to the
looming crisis in government by staying the setting up of the
regional office of the P-TOMS in Kilinochchi and the regional
fund but went on to say the agreement in substance was valid
and the President had the powers to enter into such an
agreement with the LTTE.
Effectively what the Supreme Court has
said is the JVP claim that the P-TOMS agreement and the
ceasefire agreement were a nullity because it compromised
national sovereignty was not a valid contention.
For the JVP, though they picked up a
crumb in the form of the stay order on the headquarters being
set up in Kilinochchi, the seal of approval given to the
overall agreement meant the JVP's own action has helped grant
legitimacy to the P-TOMS agreement (see box for SC order).
At the same time, the government was
left in a quandary over the stay order issued by the Chief
Justice Sarath N. Silva with Justices, Raja Fernando and
Gamini Amaratunge agreeing since the LTTE would not accept
shifting the headquarters from Kilinochchi, thus placing the
entire agreement in jeopardy and with it the foreign funding.
The LTTE, no sooner the order was
known, made it clear security considerations will not enable
them to work outside areas controlled by them, thus putting
the whole agreement in jeopardy.
But if the LTTE were to agree to a
shift in the location, then what the JVP has done by going to
court is to have legitimised the entire P-TOMS agreement.
In fact the stay order on the regional
fund and the Kilinochchi head office will be a blessing in
disguise to the LTTE with the organisation now in a position
to claim to the whole world, the government is not even in a
position to enforce a simple agreement.
At the same time, what the JVP action
has done is legitimised the ceasefire agreement entered into
by former Prime Minister Ranil Wickremesinghe with the LTTE,
since the Supreme Court has not ruled out of order that
provision which was part of the P-TOMS agreement.
More importantly for the LTTE was the
Supreme Court ruling out the Kilinochchi headquarters for the
regional committee which the Tigers claim was a tacit
acceptance that Kilinochchi was not part of a united Sri
Lanka. This the Tigers claim has strengthened their case
internationally for a separate state and has the JVP to thank
Government on notice
And while the Supreme Court was issuing
its order on Friday, the LTTE also put the government on
notice with regard to the ceasefire agreement in a letter
issued through the Head, Sri Lanka Monitoring Mission (SLMM),
In that letter, LTTE Political Wing
Leader, S.P. Tamilselvan rejected the conditions stipulated by
the government to provide transport security for LTTE cadres
and said the administration was duty bound to do so in terms
of the ceasefire agreement. The LTTE has said it will not be
bound by restrictions placed by the government with regard to
the transport of its cadres.
"We reiterate therefore that our
travel proposals on June 30, 2005, formulated after careful
and lengthy discussions, be taken in the right perspective and
given effect without any further delay. Please be advised that
we will be forced to resort to our means and modes of
transport if suitable action is not taken to effectively
implement our proposals without further delay. If this becomes
a necessity, the military should not interfere with our travel
and security arrangements. If on the other hand, the military
attempts to prevent or hinder such travel, we would be
compelled to react suitably. This, we fear, would push the
ceasefire agreement into a grave and complex situation,"
Tamilselvan also wrote in his letter.
Thus, with the P-TOMS now in abeyance
following the Supreme Court decision and the ceasefire hanging
by a thread, Kumaratunga has finally hit ground zero.
The bottomline is, the political
floodgates are now wide open and nothing short of a miracle
can prevent the government in its entirety from being
of Supreme Court order
The preamble to
the MoU sets out the basis on which it was entered into,
being the need to provide urgent humanitarian assistance
to the persons who have extensively suffered on an
unprecedented scale from the tsunami that struck Sri
Lanka in December 2004. As head of the executive and of
the government it is the duty of the President to ensure
that essential relief and assistance for rehabilitation,
reconstruction and development should be made available
to the persons who have thus suffered. Hence in my view
there is no illegality in the President entering into an
MoU for the objectives and reasons set out in the
preamble. The petitioners have failed to make out a
strong prima facie case in respect of matters (i)
and (ii) drawn in issue by them.
Gunasekera contended that it is illegal to enter into
the MoU with the LTTE which he described as a terrorist
organisation that caused tremendous loss of life and
property in this country. The contention is that even
assuming that the President could enter into a MoU for
the objectives and reasons stated in the preamble, the
other party to the MoU is not an entity recognised in
law and should not be so recognised due to antecedent
illegal activities of the organisation.
In this regard
I have to note that the matter so strenuously urged by
counsel cannot by itself denude the status of the fourth
respondent to enter into the MoU. The circumstances
urged by counsel cannot and should not have the effect
of placing the fourth respondent and the organisation
that he seeks to represent beyond the pale of law. We
have to also to bear in mind that already a ceasefire
agreement has been entered into on 23.2.2002 between the
government of Sri Lanka and the LTTE, which according to
section 2(b) of the MoU "shall continue in full
force and effect."
In these circumstances there is
no illegality in entering into the MoU with the fourth
respondent for the purpose of rendering humanitarian
assistance as contemplated in the preamble to the MoU.
The petitioners have failed to establish a strong prima
facie case in respect of this matter as well. In the
result the petitioners have failed to make out a strong prima
facie case on any ground that warrants interim
relief as to the entirety of the MoU.
prescription for ailing CEB
By Mandana Ismail Abeywickrema
ownership, regulatory framework and Report of the committee
The government is still dilly dallying
with the unbundling of the Ceylon Electricity Board (CEB) and
restructuring the power sector to remedy the crisis-stricken
sector from falling deeper into an abyss.
With an overall debt of Rs. 89 billion
and a short-term debt of Rs. 36 billion, if the government
manages to secure the funds from the Asian Development Bank (ADB)
and the Japanese Bank for International Co-operation (JBIC) it
could secure up to Rs.6 billion.
The report of the committee on power
sector reforms headed by the Additional Secretary, Power and
Energy Ministry, W. B. Dissanayake was finalised on July 12
and handed over to the Power and Energy Minister, Susil
Premajayanth on July 13.
The committee in its report has deemed
it necessary to establish reasonable financial stability in
the electricity industry.
However, it has clearly stated that
contrary to statements made by politicians through
restructuring the cost of electricity could be brought down,
it would not be possible to do so.
The report states, "Although the
cost of electricity could be brought down by off loading all
the sector debts, it is not possible to reduce or even to
stabilise the electricity prices, at current levels."
According to the report, "while
the new enactment is being drafted for passage through
parliament, it is imperative that financial stability of the
CEB be improved by immediate revision of tariffs to atleast
reflect the steep increase of fuel prices." (See box)
Root causes of crisis
The Sunday Leader has in its possession
a copy of the final 13-page report, which was handed over to
Premajayanth for final deliberations before presenting it to
The 13-member committee after about 30
sessions of discussions identified the root causes for the
present crisis in the power sector.
According to the report, the power
sector is faced with serious and longstanding issues including
a financial crisis and four major issues have been identified
as those in need of urgent attention.
First among them are the obstacles
faced by the CEB during the past one or two decades in
implementing the plans for setting up large scale, low cost
base load plants, particularly those using coal and fuel and
large scale hydropower projects.
The proliferation of relatively low
capacity thermal power generating plants using petroleum
fuels, the prices of which have sharply risen is a cause.
Another cause identified is the CEB's
inability to increase tariffs to commensurate with the
increasing fuel prices, depreciation of the rupee which
contributed to the increase in capital costs and a part of the
operational costs and the consequential higher prices paid to
independent power producers in terms of their contracts.
The final root cause is the structural
and managerial weaknesses and operational inefficiencies
within the CEB, as well as an inadequate level of empowerment
in its decision making process.
The committee in the report has
mentioned three strategic initiatives - (tripod) to be adopted
to solve the problems related to the four root causes.
However, the committee highlights that
the "sector reforms essential to ensure a viable,
self-sustainable and nationally beneficial power sector should
have three principal strategic initiatives, each of which
constitutes a leg of the power sector tripod."
First in the three initiatives is the
immediate adjustment of electricity tariffs to at least
reflect the direct costs consequent to the increase in the
price of fuel. This however is needed to be followed by a
realistic, fair and transparent mechanism for tariff setting
and compensation for tariff subsidies.
The next is the urgent implementation
of the lower cost large-scale thermal base-load generating
plants using coal, until they meet a substantial part of the
energy requirements. The committee highlights that there
should not be any room for vacillation and diversionary moves.
The committee has included policies and
measures to be adopted in this aspect. (See box)
The third leg is restructuring the
power sector by unbundling the CEB and establishing
independent, self-contained and commercially oriented
companies fully owned by the CEB and ensuring their continued
viability by offloading debt and subject to an independent and
transparent regulatory mechanism.
To receive optimal results, the
committee in its report has recommended that these three
initiatives be implemented consistently, vigorously and
concurrently with equal emphasis on each initiative.
Speaking of power sector reforms, the
committee has noted that it suffers from issues related with
its structure, governance and regulation and the reforms are
expected to help gear the sector for future challenges. (See
The committee has reiterated that the
subsidiary companies under the CEB will not be privatiszed and
the necessary legal framework would be drafted accordingly.
However, the committee has stated in
its report that a written agreement of the relevant
international lending agencies be obtained by the government
for the concepts contained in the paper. This has been
considered a mandatory requirement by the trade unions,
especially with regard to debt off-loading and implementation
of the long-term generation expansion plan.
The report states it is a reflection on
the consensus arrived at by the committee as a basis for a
The committee discussions were based on
the proposals submitted by the alliance of the CEB trade
unions, on the understanding reached between the alliance of
CEB trade unions, Power and Energy Minister Susil Premajayanth,
Finance Minister Dr. Sarath Amunugama, Power and Energy
Ministry Secretary Weerahandi in the presence of Prime
Minister Mahinda Rajapakse and the views expressed by the ADB
However, it is expected to take months
or even a year to reach finality in the whole process.
Till then, the country's heart and soul
- the power sector - would have to survive with its ailments.
sector reform process
Following is the sector structure
proposed by the committee in its report.
(a) The sector will be restructured to
ensure increased efficiency, transparency, autonomy,
accountability, competition and financial viability.
Presently vertically integrated functions of generation,
transmission and distribution of the CEB will be
vertically and horizontally unbundled.
(b) The Ceylon Electricity Board (CEB),
established under the provisions of the Ceylon
Electricity Board Act No. 17of 1969 will remain as a
statutory body subject to the necessary changes in
keeping with these proposals. Autonomy (independence)
and authority of the CEB will be granted by introducing
necessary legislation. CEB should be allowed to form one
subsidiary company and/or hold shares of other
companies. Relevant legislation should be suitably
amended/repealed or be introduced to ensure the
(c) CEB owned subsidiary companies will
be established under the provisions of the Companies Act
No. 17 of 1982 for the following functions presently
handled by the CEB and they will operate independently
as separate legal entities.
* Generation -- one company
* Transmission and bulk electricity
trade - one company
* Distribution - two or more companies
All non-core activities will remain
with the CEB.
Broad policies such as human resource
management and accounting policies applicable to
subsidiary companies will be jointly evolved by the CEB
and subsidiary companies.
(d) The CEB Employees Provident Fund
and the Pensions Fund will continue under the CEB.
(e) The Lanka Electricity Company (Pvt)
Ltd. (LECO) will remain and continue as a separate
entity at this stage of reforms.
(f) The Public Utilities Commission of
Sri Lanka (PUCSL), established under the Public
Utilities Commission of Sri Lanka Act No 35 of 2002 will
act as the economic, technical and safety regulator for
the electricity industry of Sri Lanka.
(g) The independent Monitoring and
Advisory Committee (MAC) will be retained to monitor the
performance of these companies and advice the
minister of power and energy on operational and
financial matters of the relevant subsidiary companies
and the CEB. This committee will make recommendations to
the minister of power and energy on matters relating to
the appointment and removal of -the board of directors
of the CEB.
and measures recommended by committee
The Government or the CEB or the subsidiary
companies will not initiate projects, call for proposals
or entertain proposals, or appoint committees to
investigate proposals, whether solicited or unsolicited,
to build any new power plants that would operate on oil
or other fuels of which the price is linked to world oil
prices, except in accordance with the approved Long Term
Generation Expansion Plan.
With the primary objective of reducing the
electricity production costs, where the Long Term
Generation Expansion Plan recommends coal fired thermal
power plants, those plants should be implemented.
The existing policy of building all future
thermal power plants only by the private sector should
be suspended for the first 900 MW coal-fired thermal
power plant. The objective of this is for the public
sector to build the first 900 MW coal-fired power plant
expeditiously by securing a long-term low-interest loan
and to provide relief' to electricity customers within
the shortest possible time.
A conducive environment should be created for the
state sector to compete with the private sector for
thermal power generation, except as required in (c)
The coal-fired power plant proposed to be built
at Norochcholai at Puttalam shall be the first
coal-fired power plant. The government shall process the
concessionary- financing proposal without delay, enter
into the required agreements, and target to build the
power plant to produce electricity from year 2010
onwards. All relevant government institutions, CET and
the institutions established under the reform process
will be instructed to strictly adhere to this schedule.
No substantial quantity of the annual electrical
energy requirement shall be contracted to be purchased
either from one power plant or from a group of power
plants belonging to one privately owned entity.
A 10% share of energy is considered to be
substantial in the power sector.
All obstacles to the rapid construction
of the Upper Kotmale Hydropower Project should be
cleared and the project should be implemented to produce
electricity from year 2009.
Efficiency improvement of existing
power plants should be undertaken to reduce the
with trade unions
On Friday (15), Power and Energy
Minister Susil Premajayanth together with the committee
met with trade union representatives.
After a long discussion, which lasted
about three hours, the trade unions agreed to the
formation of companies under the CEB.
Following the legal and parliamentray
procedures, the formation of the companies is expected
to take one to one and a half years.
However, the trade unions have said
that during the interim peiod of one to one and a half
years, the government would have to form strategic
business units to overlook the functions.
events at a glance
January 2, 2004: The reorganisation
scheme under the power sector reform process was
published for the information of the general public.
May 7, 2005: CEB trade unions launch
protest campaigns against the implementation of the
reorganisation scheme. Special meeting chaired by Prime
Minister Mahinda Rajapakse with the participation of
ministers of power and energy, finance and senior
May 13, 2005: Power and energy minister
appoints committee to attend to matters pertaining to
the agreement signed at the May 7 meeting.
May 26, 2005: The alliance of the CEB
trade unions forwarded a new concept paper on power
sector reforms to power and energy minister.
May 30, 2005: The committee on power
sector reforms appointed by power and energy minister
and headed by Additional Secretary, Power and Energy
Ministry, W. B. Dissanayake commenced deliberations.
June 6, 2005: Special meeting between
the members of the committee and lending agencies - ADB
and JBIC - chaired by Power and Energy Ministry
June 9 and 13, 2005: The ADB and JBIC
forwarded their views.
June 27, 2005: Power sector reforms
committee meets with Prime Minister to discuss issues on
which the committee could not have reached a consensus.
July 13, 2005: Final draft report of
the committee handed over to power and energy minister.
July 15, 2005: Power and energy
minister meets with trade union representatives.
The views and main requirements of the
ADB and JBIC were similar and they included an
independent regulation of the power sector, autonomy of
the sector through the establishment of the 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 a balanced growth of the power sector, enhancing
the sector efficiency by establishing a commercial and
competitive business environment
and the improvement of the financial viability of
However, the lenders were not agreeable
to the establishment of strategic business units (SBUs).
Head awaits Govt. response
ADB Head Alessandro Pio when contacted
by The Sunday Leader said that the bank was yet awaiting
the government's response.
The bank's requirements with regard to
the restructuring process remain the same.
As for JBIC, the bank maintained that
their requirements too have not changed.
Speaking to The Sunday Leader,
Representative, JBIC, J. Sahara said that the bank was
not in a position to make any comments as they had still
not received the report from the power sector reform
for the present ailments
Following are the four root causes
identified by the committee in brief.
* Non-implementation of low cost power
projects. Eg: coal and hydropower projects.
* Proliferation of relatively low
capacity thermal power generating plants.
* Non-revision of tariffs
* Institutional deficiencies.