UNP RAN CEB TO THE GROUND

Disna Mudalige

* Kowtowed to funding agencies to entrust power distribution to private sector

* Govt. gave consumer at Rs 7.50 per unit after buying for Rs 25

* Will reverse terms of long running agreements

A greater share of the loss incurred by the Ceylon Electricity Board (CEB) was due to the detrimental consequences of the long term agreements signed in 1993 by the then UNP regime giving into the pressures of overseas funding agencies, Mass Media and Information Minister Keheliya Rambukwella said.

Addressing a press conference at the ministry auditorium yesterday, the minister said the then UNP regime ratified agreements with the Asian Development Bank, World Bank and International Monetary Fund, to shed the state’s involvement in power transmission and to entrust this task to the private sector.

He said these agreements have accounted for about 80 percent of the loss suffered by the CEB.

Accordingly, the government had to purchase power from the private sector at exorbitant prices, Rambukwella said. The minister observed a power unit which was distributed at Rs 7.50 was bought at Rs 25 from these private companies. He said the unit price of some private companies was as high as Rs 45 in areas such as Jaffna.

"The period of some of these contracts extended to 25 to 30 years."

The minister said the term of some of these contracts is due to end this year and next year, adding that the government will not agree to these exorbitant costs when renewing the contracts.

He said thereby the government would be able to control the unit cost and provide that benefit to the people.

Minister Rambukwella said according to these agreements signed with the international monetary institutions, the government cannot initiate new power transmission projects, but going against these dictates, President Mahinda Rajapaksa who assumed duties in 2005 initiated Norochcholai and Upper Kothmale power projects.

He said the government will be in a position to do away with the fuel adjustment charges by January next year, with the addition of another 600 MWs to the national grid from the Norochcholai power plant of which the second phase and third phase are to be completed by October and December this year.

He said another 500 MWs are to be added from Sampur in four years time.

The minister said the decision to revise electricity tariffs was a collective decision of the government that was extensively discussed over the past two years.

He said the government policy is to provide electricity to all while maintaining an uninterrupted power supply round the clock.

The minister also denied allegations that the government had misused ADB funds.

He said the ADB releases funds in stages while monitoring the progress of the projects.