CEB projected to suffer Rs 100bn loss this year ; Why is the CEB hemorrhaging money?

CEB projected to suffer Rs 100bn loss this year ; Why is the CEB hemorrhaging money?

CEB projected to suffer Rs 100bn loss this year ; Why is the CEB hemorrhaging money?

Written by Staff Writer

25 Feb, 2020 | 8:16 pm

Colombo (News1st) -Over the years we have continuously exposed the power mafia which is thwarting the process of ensuring an uninterrupted supply of electricity to the people. Today it was revealed that while an exclusive group earns massive profits, the expected losses of the Ceylon Electricity Board which is run on public funds, amounts to more than Rs 100 billion this year.

Minister of Power and Energy Mahinda Amaraweera today revealed that the CEB is in a difficult situation but assured that they will continue to provide uninterrupted power even during this spell of dry weather. He noted that the administration would ensure this even if prices vary and the Government suffers a loss.

Amaraweera explained that no power stations were built over the past 5 years adding that they have made preparations to launch eco-friendly power plants in the country with the first being a LNG power plant in Kerawalapitiya, which is expected to be completed in a couple of years. The Minister went onto note that the CEB will become a profitable organisation once again by 2023.

While the intentions of the Minister are good, the Minister also has a responsibility to investigate the losses suffered by the CEB.

The 300 Megawatt LNG powerplant which was stated by Minister Mahinda Amaraweera is a project which has not been realized for several years. There are no supply and storage facilities for LNG plants in our country. Accordingly, this power station will be built to operate on diesel or fuel before being eventually converted into an LNG power plant.

The tender process pertaining to the Kerawalapitiya plant has been continuously mired in corruption. Under the previous administration, a decision was made to award the tender to Lanka Transformers Limited, a company in which the CEB holds a majority of shares. This decision had been made while eliminating companies which have been in the industry for several years, and those which are capable of benefitting the country.

The bids put forward by Lanka Transformers Limited for each unit of electricity were made to seem lower than the other companies, by excluding taxes. While several entities have challenged the tender process how can the minister give an assurance that the power station will be constructed?

In 2006, a new company named West Coast Power (Pvt) Ltd.was launched in a bid to construct the 300 Megawatt power plant in Kerawalapitiya. The government held 50% of the shares in West Coast Power, while the CEB-owned Lanka Electricity Company Limited held 18.2% of the shares, with the Employees’ Provident Fund and Lakdahnavi Limited holding 27.1% and 4.8% of the shares respectively.

As per this division of shares, the CEB should have earned a majority of the profits generated by this company. On the 28th of July 2018,  News 1st exposed the corrupt manner in which profits had been divided among the shareholders, based on a report prepared by Verite Research. According to that revelation, Lakdanavi which held only 4.8% of the shares, had received 39.75% of the total profits.

When the report pertaining to the division of profits had been studied by the Auditor General’s Department on the 8th of March in 2016, it was stated that the CEB should have received Rs 7.1 billion. However, financial records show that the CEB had received only Rs 6.9 billion.

Who benefitted indirectly through these deals? A large number of profits flow out of the CEB as a result of such deals.

The names of U.D. Jayawardena, M.J.M.N. Marikkar, and Ravindra K. Pitigalage have surfaced continuously in these transactions. However, they have been operating their businesses smoothly under the Rajapaksa administration, the Good Governance government and the present government.

On behalf of the public, we wish to question as to why an investigation is not being carried out into the transactions of these individuals.

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