Action TV: LECO to borrow Rs 17 billion to lay underground cables

Colombo (News 1st): By the 1980s international lending organizations rejected loans for the power and energy sector of our country due to the inefficiencies of the Ceylon Electricity Board. As a solution to this issue, in 1983, the Lanka Electricity Company Private Limited was established as a government-owned private entity. The Ceylon Electricity Board, the treasury and the UDA held shares of the Lanka Electricity Company Private Limited referred to as LECO for short. It had a distinct and clear responsibility to carry out, that was to purchase electricity from the CEB and supply it to the consumers and maintenance of distribution infrastructure. Leaving this responsibility aside, the LECO is now preparing to obtain a loan of Rs. 17 billion from the Asian Development Bank. The purpose of this loan is to lay underground power lines from Peliyagoda to Colombo. While LECO is aiming to obtain a loan of Rs.17 billion going against its stipulated responsibility, it should be noted that the total value of LECO is only Rs. 16 billion, Rs. 1 billion less than the loan. LECO has a poor record in laying underground power lines. They carried out only one such project and it focused on laying cables in the Nugegoda and surrounding urban areas in 2012. The project was abandoned after some time, wasting over Rs. 400 million. The Board of Directors of LECO are due to meet tomorrow to grant approval for a board paper that could not be approved when the board met on a prior occasion. This board paper states that it seeks approval for the establishment of a marketing department. It should be noted that there is an excess demand for electricity in our country. It should also be noted that LECO already has a customer service department. This board paper further notes that a budget of Rs. 50 million has been allocated for the launch of a media campaign. With all that is taking place at LECO it is evident that what should be done is to pay attention to the recommendations that have been laid out in a report that has now gone up to the Secretary to the President. More details tomorrow.