April 27, 2013, 6:20 pm


Who would have thought it was possible for Sri Lanka to beat off the challenge from Canada within the Commonwealth? But they have. So the Commonwealth Heads of Government Meeting will be held in SL in November after all.  After the Commonwealth Ministerial Action Group meeting which was held last Thursday, there is no other meeting of the Commonwealth where there is the possibility of discussing the venue of CHOGM, so it’s now a certainty that this event will be held in Sri Lanka. This is undoubtedly a high point in Professor G.L.Peiris’s role as foreign minister. His relentless lobbying has obviously worked.  As we have argued in this column on an earlier occasion, the Commonwealth itself is not an important body any more and Sri Lanka will lose nothing by even resigning from it. Indeed if the anti-Sri Lanka lobby had succeeded in getting the venue of CHOGM shifted, Sri Lanka may not have had any alternative but to resign.


This would have over a period of time resulted in the disintegration of the Commonwealth itself, because no nation wants to be a part of a body that fulfils no useful role other than that of an inquisition. Now the Commonwealth itself as an international body has got a new lease of life. Reading between the lines of the official transcript of the press conference that followed the Commonwealth Ministerial Action Group meeting last Thursday, what we can discern is a complete and unequivocal rout for the anti-Sri Lanka lobby. This represents Sri Lanka’s most significant foreign policy victory after the 2009 May 29 victory in the UNHRC in Geneva.  Among the journalists present at the press conference were Jonathan Miller of Chanel 4, Frances Harrison, and Callum Macrae who directed three Chanel 4 documentaries against Sri Lanka. It was these three well known anti-Sri Lanka lobbyists who dominated the press conference with Jonathan Miller being the first to open the question and answer session. All three were still furiously lobbying for Sri Lanka’s exclusion and Harrison said that one nation in supporting Sri Lanka at CMAG had said that ‘they do not want to be held hostage by human rights zealots’.


She is probably right because even last year, when Canada pushed for the creation of a position within the Commonwealth equivalent to the UN Human Rights Commissioner, one Commonwealth member nation had said openly that they don’t want a policeman looking over their shoulders. If the member states of the Commonwealth had seen the individuals present at the press conference which followed CMAG last Thursday, they would have felt even more justified in the decision they took.  The most significant thing about holding the Commonwealth Heads of Government meeting in Sri Lanka will be the opportunity to showcase Sri Lanka to 54 heads of governments and their ministerial and official retinues. Some of these nations are members of the UN Human Rights Council too, and what they see in Sri Lanka will have a knock on effect on other international fora as well. As Tamara Kunanayagam pointed out at a Council for Liberal Democracy seminar some weeks ago, some countries simply do not know the actual situation here and they tend to be guided by what they see in the Western press. The Canadian Foreign Minister had been trying to say that there was ethnic cleansing in Sri Lanka. But the Commonwealth heads of government, when they get here, will see a completely different picture. The massive show and tell opportunity that this provides makes every cent spent on this exercise worthwhile and this represents a personal victory for GLP.


 The electricity tariff hike


In the domestic sphere, the electricity price hike still continues to occupy the political centre stage.  It has to be said that the UNP as an opposition party has been giving a much better account of itself on this issue than they have on most other issues.  They managed to disrupt sittings of parliament and as we write this, similar protests are being held by UNP local government members in various parts of the country. At least in terms of grabbing media attention, the UNP has been more successful than the JVP. This is quite odd, because the UNP is partly responsible for the crisis in the CEB while the JVP bears no such responsibility after an earlier role destroying transformers etc. The fact that the JVP has not been able to make capital of the electricity price hike probably betrays its weakness at the grassroots level. The JVP is now an empty shell, only marginally different to the LSSP and the CP.


They do not have enough parliamentarians or local government members to stage shows like the UNP, nor do they have enough grassroots level support to mobilize local people for demonstrations. Whatever the opposition does, they will have to do it fast because when the new electricity bills finally reach the people, they will notice that the increases in their bills, in absolute terms is not as bad as the opposition makes it out to be. Many people are surprised when the present columnist tells them that the poorest consumers who use less than 30 units a month will have to pay only a maximum of Rs. 217/50 after the increase and that’s including the fixed charge and the fuel surcharge as well. When I mention this sum of Rs 217/50, many people wanted to know whether that was the amount of the increase for that category of user!


The opposition and even the media has been talking so much about percentages, that there is little awareness of the absolute amounts involved.  Even though this talk of percentages may give opposition groups a boost in the short term by giving people the impression that electricity tariffs are going to increase by an un-payable amount, it may boomerang on the opposition in a few weeks time when the first bills after the increase reach the public and they find that the increase is not as bad they first thought. Those who consume less than 30 units a month make up more than 20% of total electricity consumers. And the fact that their bill goes up by a maximum of Rs. 75 a month is unlikely to make them come onto the streets in protest.  Even in the reckoning of a daily paid labourer, Rs. 75 a month counts for nothing these days.


It’s much the same when it comes to the next category of electricity consumer - those who consume between 30 to 60 units. For this category, the quantum of the increase is a maximum of Rs 174 a month. The total amount that those consuming between 30 to 60 units will have to pay, even after the tariff increase and the fixed charge and the fuel surcharge are all included, will be Rs. 546 a month. Once again this is not an amount that will make people come out onto the streets. Those who consume up to 30 units and between 30 to 60 units make up nearly half the total number of domestic consumers of electricity, with  2.4 million out of a total of 5 million consumers.  If this segment of the population does not come out to protest, it is unlikely that the other half will bother to do so.


In a way, it is an insult to the whole country to even suggest that the people are going to stage mass demonstrations over a price increase of less than 60 US cents in a monthly bill. If the people were to come out in spontaneous demonstrations for such an increase, that will belie our claim to be a middle income economy growing at over 7 percent a year.  At times, politicians tend to be deceived by their own rhetoric. Many still like to tell people how poor they are and how they skip meals to make ends meet. If people in Sri Lanka actually have to skip meals due to poverty, how is it that there are thousands of Indian labourers sneaking into the country to work in the paddy cultivation sector? Are they too coming to Sri Lanka to skip meals? When the apparel industry heads recently sought permission to bring Indian labourers to work in their factories, they too seemed to be assuming that Indians would be inclined to spend money on plane tickets to come and skip meals in Sri Lanka. If Sri Lankans have to skip meals just to make ends meet, the Indian labourers working here will have to eat only once in two or three days so as to make the trip to Sri Lanka worthwhile.


Clearly there is a mismatch between the rhetoric that politicians spew forth from the public stage and the real situation in the country. In some spheres, the change in the country and in public attitudes has been taken cognizance of. When we were young, politicians came into power promising handouts like Janasaviya and Samurdhi. Today nobody, not even the politicians who talk about people skipping meals, talk about  Janasaviya or Samurdhi. Handout schemes like that are of no relevance to this country anymore and politicians have generally recognized that. We have to recognize that things have changed in this country. When J.R.Jayewardene assumed power in 1977, the biggest problem he had to confront was unemployment. Today, the biggest problem in this country is the shortage of labour which is acting as a dampener on further growth.


The middle class


While at the lower levels of electricity consumption, the amounts by which the electricity bill will increase, do not constitute significant amounts, those consuming between 60 to 90 units will have to pay a maximum of Rs. 433 extra every month and those consuming between 90 to 120 units, will have to pay Rs 1,035 extra.  There are 1.3 million consumers using 60 to 90 units and 600,000 consumers who use 90 to 120 units. Together they make up about 38% of the total number of domestic consumers and constitute an important segment of the middle class. For these two categories of consumer, the increase of Rs. 433 and 1,035 respectively, does look substantial. To draw a parallel, what would the reaction of the public be if the price of a cylinder of gas was increased by Rs. 433 or 1,035 in one go?  It is here that the government will have to do some deft footwork.


What is in favour of the government is that at these latter levels of consumption, the absolute amounts that have to be paid are not excessive.  Those consuming between 60 to 90 units will have to pay a total amount of Rs. 1,161 and the 90 to 120 category will have to pay Rs. 2,835. To reach a 90 to 120 unit level of consumption, the family concerned should be using a range of electric appliances like fridges, washing machines, TVs electric irons and so on. Moreover, the household income of these categories would be much higher than users at the first two levels. No household at this level is going to remain in darkness because of this increase nor are they going to forego ironing their clothes on account of this. But the increase may rankle in their minds nevertheless.  This is why a campaign to educate the public is needed.


The first thing that the government should tell the public is that every country in the world divides electricity consumers into three categories - residential, commercial and industrial. And in every country in the world, be it India, Australia the USA or any other, residential users always pay more for their electricity than commercial or industrial users. Hence in every country in the world, when factory workers go home and switch on their lights they pay much more per unit of electricity consumed than the owners of the factory pay for a unit electricity. There are many reasons for this and one of the main considerations is the cost of maintaining a supply to a whole lot of residential users who buy only small quantities of electricity. In the case of commercial and industrial users, a small number of users buy a large number of units of electricity thus reducing the cost of supply. Another reason for residential prices to be high would of course be the need to limit non-productive usage or wasteful consumption of electricity.


One political advantage that the government has in this matter is that even though the opposition may shout from the roof tops that the price of electricity is too high, people now look skeptically on promises to reduce prices. The government should capitalize on this, by explaining the history behind the CEB’s massive losses. They should admit that when the UNP was in power between 1977 and 1994, they did a lot to create cheap sources of hydro electricity by building several large scale dams. But the three governments that held power successively between 1994 and 2005 did nothing of the sort and they are squarely responsible for the present situation. If anybody tries to think of anything that Chandrika Kumaratunga built during her 11 years as president, they are going to come up against a blank wall. During her tenure between 1994 and 2001 and again from April 2004 until November 2005, she built absolutely nothing and certainly nothing that can generate cheap electricity except perhaps for laboriously plodding along with regard to the Kukule Ganga project which is only of minor importance providing an insignificant 35 MW in the first phase. She never completed even that.


Throughout their tenure the PA government kept on increasing electricity generating capacity by allowing private sector investment in diesel operated thermal generators.  In addition to the cost of operating their own fuel burning generators, the CEB had to buy electricity from these private companies at enormous cost and resell the electricity at an amount much lower than the production cost and over the years, the loss has accumulated leading to the present crisis. The short-lived UNP government, of December 2001 – April 2004, despite its illustrious past in the field of cheap electricity generation, was no better than the Chandrika Kunaratunga governments that preceded and succeeded it. In the wake of the government’s recent electricity price hike, Karu Jayasuriya had said that it was the UNP government that started work on the Upper Kotmale hydro electricity project before it was dismissed. That cannot possibly be true. Susil Premajayantha, his successor as minister of Power and Energy in the restored Chandrika Kumaratunga government, was still trying to negotiate a deal with Arumugam Thondaman to allow Upper-Kotmale to go ahead months after the UNP government was voted out of power. So how could the Upper Kotmale project have started during the time of the UNP government?


 ‘Karuwala’ Jayasuriya


The fact is both Chandrika Kumartunga and Ranil Wickremesinghe were afraid of the political forces opposing the Norochcholai coal power plant and the Upper Kotmale hydro electricity project.  Neither of them did anything to start these two vital projects. It was only after President Mahinda Rajapaksa assumed office that he started both those projects regardless of opposition from any quarter. Had he not taken that decision, this country would have faced a far more serious crisis by now. Since the UNP is now the main opposition party, it would be interesting for the public to know what they did in this field of power generation the last time they were in power. When the UNP government assumed office in December 2001, the country was in the middle of an unprecedented power crisis. Power cuts continued several months into the UNP’s period in office. Karu Jayasuriya who became the minister of power and energy in the UNP government famously said that he would resign if he could not eliminate power cuts within six months. Even before this period ended, he was being referred to as ‘Karuwala’ Jayasuriya by some sections of the press.


To his credit he did manage to eliminate power cuts within six months of his assuming office, but he was criticized even at that time for the methods he used to meet that target. He too had done exactly what the previous government did and bought expensive thermal power from private fuel driven generator companies. After that Karu J had even crowed that there was now a surplus of 200 megawatts with 1,600 megawatts of generation capacity as against a demand of 1,400 megawatts.  At that time the situation was so desperate, that one can hardly blame Karu J for concentrating on the generating capacity and not the source of power generation. But the end result of this was continued dependency on fuel driven generators. This had necessitated a massive 35% to 60% rise in the price of electricity by early 2003. (The UNP had to increase electricity tariffs in April 2003 for the same reason that the Rajapaksa government has been forced to increase tariffs in April 2013. But look who’s calling the kettle black! Even the quantum of the tariff hike at that time, seems to have been equal to the present one.


Karu Jayasuriya also came under severe criticism during the tenure of the UNP government itself, for restricting the technology to be used for the Kerawalapitiya combined cycle power plant which can provide up to 300 MW. Apparently CEB engineers had advised Karu J to leave the technology to be used to generate the electricity in Kerawalapitiya open so as to obtain the cheapest possible generating method. But Karu J was a man in a headlong quest to increase capacity and he had specified diesel powered combined cycle technology for Kerawalapitiya in order to save time. So what have we here?


To Jayasuriya’s credit, he had pushed very hard for the Upper Kotmale project which would have produced cheap hydro electricity, but he was never able to get it off the ground because he did not have the support of the rest of the government which needed Arumugam Thondaman more than it needed Karu.  The end result of all this was that the UNP government frittered away their two and a half years in power without having done anything other than accentuating the slide initiated by the Chandrika Kumaratunga government.  Once Chandrika was restored to power in April 2004, she just continued bumbling along as she had always done and the power sector saw no further development.


After the UNP lost power in 1994, the power sector began to see some real development in the sense of creating cheap sources of electricity generation in the form of the Norochcholai power plant and the Upper Kotmale project only after the Rajapaksa government took office.  All these facts should be researched in greater detail and the government should lay these before the public. They will have to rip Chandrika Kumaratunga apart in the process, even though this government is technically a continuation of the Chandrika Kumaratunga regime. It would be very unwise for this government to keep quiet and take the blame for the inaction of the Chandrika Kumaratunga years. Just training their guns on the UNP’s two and a half years in power will not help. They will have to come clean and admit before the public that between 1994 and 2005, they were led by an incompetent president who did not know whether she was coming or going. Obviously Minister Pavithra Wanniarachchi can’t do that. She rose to prominence under CBK digging for bones in Suriyakanda.


Here now is the time to make a clean break with the past. The government will need someone who can criticize not just the shortcomings of the UNP government of 2001-2004 but those of the PA as well. After all the UNP was in power for only 30 months. The greater share of the blame has to be taken by the PA led by Chandrika Kumaratunga. By not laying these fact before the public, the government is not going to convince the middle class consumer to bear with them. The government should aggressively claim the right to the benefit of the doubt on this matter of electricity generation. Their promise has been that electricity tariffs would be reduced once the other phases of the Norochcholai power plant come into operation starting later this year. The question that should be posed to the public is who is more likely to be able to fulfil such a promise, the present government which has clearly embarked on a program to create cheaper generating methods or the opposition, which actually brought about this crisis by commissioning too many fuel driven thermal power plants when they had political power?

island.lk