Cabinet approves CEB restructuring
 

BY Manjula Fernando and Uditha Kumarasinghe

THE Cabinet has approved the restructuring of the Ceylon Electricity Board (CEB) management in a bid to bring down the cost of electricity while providing financial stability to the debt ridden entity.

Finance Minister Dr. Sarath Amunugama addressing the weekly Cabinet briefing yesterday said the Cabinet approved the memo submitted by Minister Susil Premajayantha at the last Cabinet meeting. The relevant Bill will be presented in Parliament shortly.

This will be accompanied by a second Bill to protect all critical public entities including State banks from privatisation.

Dr. Amunugama said the argument that the government was going to privatise CEB was 'artificial and futile'. It has been created by parties with vested interests. He assured that in keeping with the Government policy no public utilities will be privatised.

"This restructuring will in no way mean privatisation. It will ensure efficient management, financial stability for the CEB and a better deal for consumers," the Minister said, adding that Sri Lanka boasts the highest electricity rates in the world. This contributes largely to the high COL index.

The restructuring, or 'unbundling' of CEB will pave way for setting up of four or more 'strategic business units' under the CEB to oversee power generation, transmission & bulk electricity and distribution. Two or more units will be set up to take over distribution.

Dr. Amunugama said the proposals have already been sent to the Legal Draughtsman's Department and until such time the Bill is brought to Parliament the CEB will commence operations under separate internal units.

However, workers' welfare interests such as the pension funds and the ETF will continue under the parent body.

The Minister said the restructuring proposals have been approved by all stakeholders of the electricity board - trade unions, engineers and the management except for a single trade union within the CEB.

The Government is also planning to take over the repayment of the Rs.90 billion debt by the CEB to the Asian Development Bank. The Bank has agreed for a repayment on the basis of a soft loan covering a period of 40 years with a 10 year grace period.

"At the end of 10 years, we hope the Norochcholai coal power project and the Kotmale project would be operational and the CEB will be in a better financial position." The Minister said the restructuring would help the CEB to recover from its current predicament.