EPC poll: importance of the Muslim factor

Whatever Rajapakse's detractors may say, he remains determined to conclude the second phase of his political strategy with the same tenacity of mind. Only that the province when taken as an entirety is diverse and politically divided. It has not seen a provincial election since 1998, and is home to over 60% of the country's displaced population. It is also where the Muslim community is politically vocal and strong. The contest would prove keen.

Above all, the east as a province has different political implications to all three major communities with each staking unique claims. Those advocating a separate homeland for the Tamil-speaking people oppose the provinces being separated, despite a court ruling that has indeed achieved this 20 years after the Indo-Lanka Peace Accord. As for the Muslims, sandwiched between the Sinhala and Tamil communities, and with their own political aspirations being stifled, a separate administration in the Eastern Province is vital.

Ethnic considerations

As for the Sinhalese, the east has cultural and religious implications, in defence of which the Jathika Hela Urumaya (JHU) feels duty bound to run for provincial office. The JVP that does not miss an opportunity to justify the 'reintegration' of the Pillayan Group into society and mainstream politics is quite wary, despite a decision to enter the fray.

The JVP listed a series of demands before announcing its decision to contest the forthcoming PC elections in the east. They include the full implementation of the 17th Amendment to the Constitution well ahead of the May 10 elections so that the Constitutional Council would be in operation by then, and the two vital institutions required to ensure a free and fair poll, an Independent Elections Commission and an Independent Police Commission would be functional before the polls.

The JVP also dabbled in India bashing alleging that the President's sudden dedication to reintroducing the 13th Amendment was at the behest of India, a fact the JVP took into consideration prior to reaching its decision to contest.

All these varying considerations of communities and political parties would come into play as the eastern provincial election process begins. In post Batticaloa poll euphoria, it is unlikely that the government feels their weight yet. And to give this poll the winning streak, just having the TMVP on its bandwagon is insufficient. The UPFA requires a powerful ally in terms of Muslim support.

Having worked with the TMVP on the Batticaloa local election, it is not possible for the UPFA to disregard the union. But it is this very alliance that is proving an embarrassment as the government struggles to enter the fray as a formidable alliance. Government partners such as the EPDP have severely criticised the TMVP's violence and coercion to capture political power in Batticaloa.

Given the eastern dynamics, Muslim support is crucial for victory. Yet, for all the wanton defecting, this is too much to expect from the SLMC defectors who work with the UPFA administration. They too have recently come out strongly criticising the Pillayan Group for violence unleashed against the Muslims. These defectors would  lose face if they were to board the same platform with the government that openly backs the TMVP.

The east is of immense political value to the Muslim community. It is there that they clearly stake a claim for regional political leadership. As a community, it is a political right the Muslims would religiously defend.

Quite rightly, they fear that if their political aspirations are ignored in the east, the community has nothing to hope for. "This is crucial for the Muslim political identity. We represent a political party that sprang from the eastern soil. The SLMC was created largely because our founder leader realised that our political identity and aspirations were being disregarded. More so post Indo-Lanka Agreement. It compelled us to form ourselves into a political group," explains M. L. M. Hizbullah, a senior SLMC member.

Vying

This is also why the two main political parties have begun to vie for the SLMC's support in contesting the eastern provincial poll. The SLMC, aware of its own significance during this election has demanded the post of chief minister and enhanced accommodation on the nomination lists. This does not augur well for the UPFA and the UNP as both parties have Muslim politicians who would like to run for the top post in the province.

For example, there is Naushad Majeed who heads the UNP's Eastern Political Affairs Committee. The UNP,  struggling to come to terms with the Batticaloa poll has Majeed  brimming with confidence about the possibility of winning the provincial poll.

In support, he says that the recent poll shouldn't be compared with an election to be held in the entire province. "We predicted the Batticaloa electoral result. There was much pre election violence that people feared to vote. We did not want our cadres exposed to such violence," offers Majeed. In his opinion, contesting the PC poll is one sure way to prevent the alleged TMVP militancy from growing further. "For that, democratic political parties must contest," he opines.

Pathetic response

Nevertheless, the UNP's response to both the Batticaloa poll and now the Eastern Provincial Council (EPC) poll has proved pathetic. When the Batticaloa poll results were announced, the UNP cried foul alleging the government's failure to disarm paramilitary groups and not creating conditions for holding an election.

Having skipped the local authority poll, the UNP can no longer risk its reputation by shunning more elections. It next went up in delegation to the Election Commissioner's office at Rajagiriya to express their opposition. Outside, a badly organised protest was held with the easiest of slogans 'Batti was handed over to Pillayan.'

For a party that has contested and also held elections under trying conditions, during times of insurgencies  and war, the UNP's approach to the polls is lamentable. Party voters would have heaved a sigh of relief when its decision making body, the Working Committee eventually decided to contest the EPC elections scheduled for May 10. A nomination board comprising UNP Leader Ranil Wickremesinghe, Chairman, Rukman Senanayake, General Secretary, Tissa Attanayake, Naushad Majeed and two others has been appointed.

Meanwhile, SLMC spokesman, Parliamentarian Hasan Ali confirms the party's decision to contest the provincial election but adds that any alliances would be announced later. "Whether to go it alone or contest in alliance with another party will be announced later," says Ali. The SLMC last week held a meeting with all local council members, district committee and village level members.

The contentious TMVP, the reason for grumbling by most political parties, is also keen to contest. Spokesman Azad Moulana was recently quoted in the press having stated that the TMVP would like to take over the province and administer it.

APRC stand

As nominations were called for the EPC, in a correlated development, the APRC last Monday stood for a merged NE Province with a separate Muslim majority unit. It is an interesting position that would make the poll a keenly contested one with ethno-political considerations of Tamils and Muslims coming to the forefront. This proposal was made by the SLMC representative, Attorney Nizam Kariappar.

Meanwhile, the four Muslim political leaders extending support to the government - Ministers Ferial Ashraff, Segu Izzadeen, Ameer Ali and A.L.M. Athaulla had agreed to the northeast merger subject to a Muslim majority unit in the east.

As nominations close on April 3, this contest is going to prove not only keen, but trying as well.

Consumers paying for government's sins

For Sri Lanka's electricity consumers who continue to reel under the spiralling cost of living, there appears to be no hope. People received shock treatment mid March when a minimum 40% tariff hike was imposed. Electricity consumers had to shoulder that, though due to no fault of their own.

The administration is honest enough to admit that it is the corruption, mismanagement and inefficiency that have made the Ceylon Electricity Board (CEB) run into massive losses amounting to billions. Yet, the burden has been passed on to the hapless consumers who have to pay higher tariffs not due to over consumption but due to the failure of the successive administrations to rectify matters.

Likewise, the Ceylon Petroleum Corporation (CPC) has caused constant heartache to consumers. The regular and burdensome fuel price revisions impact on the public in several ways. Just as much as their transport becomes costly, be it private or public transport that they resort to, the essentials also go up in price with more transport costs being added on.

The situation is such that people find it impossible to afford their daily rice and curry. Heaven help the infants born in these trying times.

However, while the administration allows price revisions, be it electricity tariffs, rice or gas prices, what is not explained is the failure of the mismanaged institutions to recover millions if not billions of rupees due to them.

If the CPC and the CEB feel cheated, they can only blame some of the public institutions that owe money by the billions.

The real tragedy here is that it is the Ceylon Electricity Board (CEB) that owes the Ceylon Petroleum Corporation (CPC) Rs. 28 billion, the highest amount owed by a state institution to another. And the trend that these public institutions have set is explained in this investigation.

It is sad that instead of an effective recovery mechanism, the institutions appear only too happy to pass on the burden to the public with no feelings of remorse.

 This investigation is an effort to highlight as to who owes how much to the CPC and the CEB - perhaps the real reason for the inability to continue with the subsidies.

By Mandana Ismail Abeywickrema and Nirmala Kannangara

It is a question of trying to ascertain as to who has robbed whom. The answer is murky.

Just take the two most important institutions - the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB), burdened in many ways and unable to recover dues.

Who owes the two vital public institutions so much of money? It is certainly not the private sector. Consumers are only victims of this evil circus, held by their throats and made to pay higher tariffs for no fault of theirs.

Even the ministers in charge of these institutions concede that the consumers could have their burdens made lighter, if those in debt paid up. But there is little said about effective recovery mechanisms.

Need to recover

We have Petroleum Resources Minister A.H.M. Fowzie claiming that if the Ceylon Petroleum Corporation (CPC) recovered the money owed to it by state institutions, subsidising fuel without burdening the masses would be easier. And actually possible. Well said.

According to Fowzie's explanation, CPC was incurring heavy losses from fuel sales in the local market. "We do not recover the money that we spend on purchasing fuel from the global market. For the last three months, CPC has incurred a monthly loss of Rs. 1,700 million," he says.

He also notes with concern that this month, the losses are expected to increase up to Rs. 2 billion, a mammoth amount.

Apart from the losses incurred by fuel sales, CPC also has to bear the heavy burden of carrying bad debts of state institutions.

The money owed by state institutions to CPC amounts to billions of rupees. The Ceylon Electricity Board (CEB) owes the CPC Rs. 28 billion, which is the highest amount owed by a state institution. There is little wonder that the CEB feels the need to electrocute people with a crippling tariff hike.

Meanwhile, the state transport sector (CTB and the railways) too owe a sum of Rs.3 billion, state owned Mihin Lanka owes Rs.650 million and the armed forces have an outstanding bill of Rs.2 billion.

Constant requests

Fowzie says that he has been making constant requests from the Finance Ministry to intervene to recover the money owed to the CPC by other state institutions.

"I have asked the Finance Secretary on many occasions to look into this matter, but nothing has been done so far," he said.

Fowzie explained that since the government does not make any subsidy payment to CPC, it was the institution that had to bear the present losses incurred, especially in diesel and kerosene sales.

"CPC is currently subsidising diesel and kerosene, otherwise, the consumers would not receive it at current prices. However, since the government does not make any payment for it, the loss has to be borne by the CPC," he explained.

However, Fowzie noted that if the institution managed to recover some of the money owed to the CPC by other state institutions, then the money could be invested and the returns could help minimise the present losses incurred by the institution.

Passing the burden

"If the billions were recovered, it could be invested and the interest from it alone would be Rs.800-900 million and that would help CPC subsidise diesel and kerosene without incurring a loss and also without passing the burden to the people," Fowzie said.

However, he said that there were no plans yet to increase fuel prices in the local market.

But that's only half the story - and half the problem. The other side of the coin is the debt burden of the CEB which by now has been mercilessly passed on to the consumers with a crippling 40% tariff hike in mid March.

According to Power and Energy Minister John Seneviratne, the losses incurred by the Ceylon Electricity Board (CEB) was a key contributory factor that led to the recent electricity price hike. It is evident that consumers are not paying for increased consumption but for the CEB's sins.

Seneviratne said that although the CEB has incurred losses amounting to billions of rupees, programmes have been put in place to minimise further losses.

According to the Minister, CEB has so far managed to marginally reduce its losses from 17% to 16.5%.

"We are working to bring down the losses further," he said.

However, Seneviratne refrained from stating the exact amounts owed to the CEB, but said that state as well as private institutions owed the state power giant billions of rupees.

Illegal tapping

"CEB is taking steps with regard to consumers who do not pay their bills. Such lines are disconnected," he said.

Although CEB carries out disconnections, Seneviratne said that there still were some consumers who received electricity without making any payment. "We do need to be more effective when it comes to recovery," he said.

A key problem faced by CEB is the illegal tapping of electricity that takes place in many parts of the island. And some 4% of the consumption happens this way, according to statistics, and there should be no reason for the authorities to turn a blind eye on this aspect.

Apart from the non-payment of bills, the illegal tapping of electricity causes heavy losses to the CEB.

"Illegal electricity tapping has caused immense losses to the CEB and we are looking at ways to address the situation," Seneviratne said.

He also said that the CEB faced immense difficulties when it came to addressing illegal electricity tappers. "There is organised resistance that prevents CEB officials from carrying out their duties," he said.

The CEB's external resources unit has been requested to find the necessary funds to put in place the infrastructure to further minimise the losses incurred by CEB.

White elephant

CEB incurs a loss of Rs. 40 million per day. Minister Dr. Sarath Amunugama, during his tenure as finance minister called the CEB one of the biggest white elephants in the country that empties Treasury coffers.

The government during the past few years had spent billions of rupees subsidising the CEB. Till 2005, the government spent Rs. 5 billion in subsidies and in 2005 the subsidy payment was a hefty Rs.11 billion.

CEB was earlier provided diesel at Rs.55 per litre when local retail oil prices were much higher. The CEB is now compelled to purchase diesel at Rs.85 per litre from CPC.

It is learnt that apart from the monies lost due to the non payment of bills by consumers as well as illegal tapping of electricity,  CEB has been incurring a loss of Rs. 250 million per month since 1994 following a decision to place hotels under the industrial tariff scheme from the general purpose tariff scheme.