Unconscionable tariff hikes and restructuring the CEB - EDITORIAL

The Ceylon Electricity Board has done it again.  Electricity tariffs have been raised by a whopping 18%. At this moment according to UNICEF severe food insecurity is prevalent in our country. The situation was predicted to deteriorate between October 2022 and February 2023.

A UNICEF report estimates that 6.2 million people (28 percent of the population) are moderately acute food insecure, while 66,000 people are severely acute food insecure. 
Two in five households (41.8 percent) spend more than 75 percent of their expenditures on purchasing food, leaving little to spend on health and education. Many families have exhausted their savings and are struggling due to crippling inflation.

In the aftermath of the COVID-19 outbreak, the wages of most ordinary folk in Non-Government Sectors were halved. Since then in most cases, wages have remained static. In the meantime, the costs of all goods and services have nearly tripled.
Is it any wonder that the UNICEF report found that 6.2 million people in our country are moderate to acutely food insecure?

The recent markup in electricity tariffs has to be seen in this situation a situation where a large section of our population is unable to even provide the children of this country with adequate food.
As recently as August last year, media reported Minister Wijesekera stating that there would be no revision of electricity tariffs in the future. 

The same minister now blithely tells us that tariffs are going to be raised by 18 percent from the end of this month. 
He added that in the future electricity tariffs would undergo revisions every three months from next year, deviating from the prior schedule of bi-annual revisions.

Is he suggesting more upward price revisions?
According to government MP Aluthgamage the CEB is overstaffed as a number of its functions -like new connections, disconnections erecting of posts cutting branches of trees etc- have been out-sourced.
According to the MP a CEB labourer draws a monthly salary of Rs. 120,000!

Power and Energy Minister Wijesekera announced yesterday (23.10.2023) that despite the previous price hikes during the year, the CEB’s operating loss at the end of September stood at Rs. 29 billion, while the net loss for the year 2022 was Rs. 272 billion.  Accumulated losses of the CEB he said between 2014 – 2022, was over Rs. 565 billion. O tempora, O mores!

Something has gone very wrong at the CEB. Under the agreement with the IMF government, cannot subsidise the CEB. It is equally impossible to expect the public of this country to subsidise this monolith where even ordinary labourers receive a monthly wage of Rs. 120,000.

There is, therefore, an absolute need to restructure not only the CEB but all other government-owned enterprises, which have continued racking up losses atop losses at the people’s expense.
Media reports reveal that SriLankan Airlines in 2021 suffered a loss of Rupees 49.7 billion. In 2022 SriLankan Airlines made a mind-boggling loss of rupees 168.58 billion, and today Sri Lanka has a whopping 527 State-owned Enterprises (SOEs).

Such a large number of SOEs are not the norm globally. Many other countries, such as India, have been reducing their stakes in SOEs and in some cases, such as India’s national carrier Air India, have been privatized entirely.
A study by Groundviews reveals that low-quality talent is not the most significant issue with SOEs; Many employees are eminently qualified and capable. Unfortunately, these organisations fall victim to government mismanagement and corruption. It is therefore eminently clear that State-owned Enterprises are in dire need of restructuring. 

The State needs to divest itself of these loss-making ventures. In this context the Minister’s statement that under the IMF-backed programme, Sri Lanka plans to unbundle the loss-making CEB is welcome.
But does the government have a plan as to how the ordinary people of this country are going to be helped meet the increased tariffs the government keeps heaping on the populace?
Does the government have a plan to ensure wages keep abreast of price increases? This is the problem our people face and the government needs to solve it.