Seventy-five years after independence, Sri Lanka is still on the road to economic recovery. As some would like to define it, it is not the fault of the early leaders who gave leadership to the country. Instead, it is the fault of others who rode to power with nationalistic slogans and made the country’s resources an Eldorado for themselves.
Several leaders made decisions, largely to keep in touch with the people anticipating re-election.The country’s problems were not their concern, and these self-serving politicians drove the country to abject poverty. All this has brought the country to its knees before the world community and citizens are calling for accountability for the years of excess.
Currently, the government is plagued with many issues aside from the economic upheaval which seems to continue unabated because the debt restructuring issues are yet to be resolved. The fly in the ointment is China, whose recalcitrance to review its bilateral debt with Sri Lanka could be turning this long-term friend into a foe.
The Central Bank was optimistic that Sri Lanka could obtain the International Monetary Fund (IMF) package in the last quarter of 2022, it didn’t materialise and the time frame has been pushed back to March this year.
Meanwhile, the government is employing various methods to increase its revenue. Taxing people who are earning more than 100,000 rupees a month is affecting the middle classwhich stands on the brink of a wipe-out. Adding insult to injury, the government is now planning to raise electricity tariff rates, a move which would also decimate businesses, especially small and medium enterprises.
The proposal to raise electricity tariff rates was met with stiff resistance from within the establishment itself when the Chairman of the Public Utilities Commission of Sri Lanka (PUCSL), Janaka Ratnayake, registered his utmost disapproval.
Ratnayake challenged Power and Energy Minister Kanchana Wijesekera, saying he would use his veto power to negate the tariff hike if the government gave its nod to it.
The obstinate confrontation has now come into the public domain with Ratnayake claiming that Attorney General Sanjay Rajaratnam misinterpreted the provisions of the Electricity Act and the Public Utilities Commission Act.
In letters written to the Ministry’s Secretary M.P.D.U.K Mapa Pathirana last year clarifying the powers vested in the Minister of Power and Energy on the revision of electricity tariffs, the Attorney General gave his opinion that the Electricity Act empowers the Minister to revise the tariffs subject to approval by the Cabinet of Ministers and that the PUCSL is required to implement the amended policy guidelines on electricity tariffs.
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‘I am of the opinion that the Public Utilities Commission shall be duty-bound and obliged to give effect to same in terms of sections 14 and 17 of the PUCSL Act’, he said referring to the implementation of revised policy guidelines on electricity tariffs.
He further said the authority of the minister to formulate general policy guidelines on pricing is also recognised in Section 30(1) of the Public Utilities Commission Act. The Attorney General’s written opinion also states that Section 30 of the Electricity Act, which relates to tariffs, interalia provides that transmission, bulk sale, distribution and supply of tariffs should be set by the relevant licensee in accordance with a cost reflective methodology approved by the PUCSL in accordance with the policy guideline approved by the Cabinet of Ministers under section 5. This latter proviso could mean that the PUCSL too has some degree of control over the tariff structure.
Meanwhile, the Minister has obtained Cabinet approval to amend the general policy guidelines. In addition, the minister has requested that the Cabinet of Ministers direct the PUCSL to implement the revised electricity tariff proposal in accordance with the revised general policy.
However, the Cabinet did not take up the minister’s proposal last week. A tariff increase for the second time in a few months is likely to be discussed at length this week. The PUCSL’s argument is that the last tariff hike in August suffices for the Ceylon Electricity Board (CEB) to make a profit. It is against this backdrop that repeated claims by sources in the Ceylon Electricity Board Engineers Union of the government’s plans to privatise the CEB ring true. Their allegation is that by raising tariffs the government wants to show the CEB as a profit making entity to entice potential buyers.
The ministry says that according to the Electricity Act, revisions could be made twice a year depending on other external factors that may influence such a decision.
Ratnayake now says that with the proposal to increase tariffs, the CEB is planning to collect more than Rs 100 billion this year to bring sufficient coal stocks and provide an uninterrupted power supply.
He may have been prompted to say this after the minister asked if the country wants an uninterrupted power supply with tariff hikes or power cuts to avoid hikes.
Most people say that when tariff hikes are implemented, there won’t be a need to impose power cuts. This is because only a few people could afford to pay the increased bills, thus reducing demand drastically.
Industry leaders and owners of small and medium enterprises say their businesses could cease to be viable with increased tariffs. They wouldn’t be able to find competitive markets for their products.
Ratnayake has also said that ‘the tariff hike is totally against the taxation process and the Electricity Act in Sri Lanka.”
He said that the Attorney General’s interpretation was ambiguous and contrary to the law.
Ratnayake went on to claim that at a time when more and more independent commissions are needed to implement efficient government practices, the government is hell-bent on destroying the existing commissions.
The Chairman said that it was not necessary to appear before the Supreme Court challenging the electricity rate hike since the commission headed by him would not allow the government to carry forward its decision if such a decision were taken.
He further said that the tariff hike had been computed by the secretary to the ministry, the general manager, and another electrical engineer based on erroneous data. He pointed out that there are sharp discrepancies between supply and demand for electricity.
Now it appears the conflict between the Minister and the Commission has been elongated while the people are facing intermittent power cuts and difficulties owing to cost-of-living issues and other burning problems that the government has so far failed to address.
People need an elaborate explanation of why the government needs an electricity tariff hike when the PUCSL says that the CEB made profits with the previous hike.
The other fiasco the government is facing is the holding of the local government elections. The opposition claims there is a sinister plot to derail the elections, alleging the government is unable to handle a huge defeat at the hands of angry people, and is therefore trying to put off elections. The government meanwhile is pointing out it is not the time to hold elections. The people of the country are facing unprecedented hardships owing to the mismanagement of the economy, and an election would put the people in an awkward position.
These views expressed by government ministershave, however, caused ripples among opposition parties. Many believe that the government is trying its hardest to postpone local government elections by hook or by crook.
The opposition is rather confident that the government is trying to use a private member’s resolution brought by Premanath Dolawatte to put the elections on hold.
The private member’s bill proposes at least 25 percent representation for youth in local bodies. This may require amendments to the Local Government Elections Ordinance.
Though the initial proposal was made by Samagi Jana Balawegaya member Imitiaz Bakeer Markar on an earlier occasion, the government preferred to dwell on Daluwatte’s proposal. They feel it will give them some leeway to exploit the situation arising from it.
The Prime Minister’s report presented to parliament on Dolawatte’s proposal perturbed the opposition benches. This was at a time when the Elections Commission had already fixed dates for nominations to be received.
The leader of the National Peoples Power Anura Kumara Dissanayake said everyone appreciated Dolawatte’s proposals, but this is not the time for them. This is because the Election Commission has already announced the modalities for holding local government elections and gazetted the process of submitting nomination papers. Dolawatte’s proposal he said, could come into force at the next local government elections.
However, Minister of Justice Wijedasa Rajapakshe intervened to allay the fears of the opposition.
Explaining the procedure adopted to pass a Bill in the House, Minister Rajapakshe said that it would take nearly three months to complete the process. By then, the elections would have been over.
According to the constitution, it is a long process after a Bill is submitted to parliament. It has to go to the Cabinet Advisory Committee. After that, a period of two weeks is allotted if someone wants to challenge the provisions therein in the Supreme Court. “The Court has three weeks to make its decision in respect of such action”, said Rajapakshe.
“Accordingly, anyone would realize that it will take at least two and a half months to pass a Bill presented to this parliament.”
“It will not become law until it is passed by this parliament and attested to by the Speaker of the House.”
“According to the present system of governance, we will not be able to complete this process for two and a half to three months.”
“We are also bound to act according to Standing Orders.” Hence, the election would be over by the time this law is enacted.
Sajith Premadasa then asked the Minister of Justice to clarify whether the local government elections would be held on time and completed by March 20 or not.
In response, the Minister stated that the 21st Amendment to the Constitution has given the Election Commission full powers and that parliament has no authority to interfere with them.
The minister said that as a government, they would support the implementation of the plan of the Election Commission.
Others, however, pose the question as to how the government plans to raise the 10 billion rupees needed for the election and provide security and other facilities to the candidates when the country is facing a severe economic crisis. Political analysts point out that if the democratic process isn’t realized by holding elections on time, this could also affect Sri Lanka’s chances of obtaining IMF (International Monetary Fund) assistance to revive the economy.