Finance Ministry hits out at Power Ministry

The Power Ministry has been strongly criticised by the Finance Ministry over delays in implementing renewable energy projects and dire financial management in the Ceylon Electricity Board (CEB).

In a stinging letter sent yesterday by Finance Ministry Secretary S. R.Attygalle to Power Ministry Secretary Wasantha Perera, he says, despite Government policy to achieve the target of at least 70 percent of electricity generated using renewable energy by 2030, only around 15MW was added to the national grid in the last 24 months.

“A pragmatic roadmap which details out and facilitates the investments that could be attracted especially from the private sector and the required actions with the timelines is yet to be received by this Ministry although more than 26 months have since lapsed since the declaration of the policy,” he said.

The Finance Ministry Secretary justifies raising questions from the Power Ministry saying his office has received requests for project financing from multilateral and bilateral agencies from the CEB and also services the borrowings on which the utility’s assets were created such as the Norochcholai coal power plant.

Outlining several renewable energy targets the Power Ministry had set, Mr.Attygallesaid it is “somewhat disconcerting that firm strategies to achieve the said plans do not seem to be in place even after 2 years.”

“It must be noted that the mixed and contradictory statements made and actions taken by responsible senior officers needs [sic] to be taken seriously with accompanying action taken, given that it appears to be bordering on deliberate attempts to disrupt policy makers from making correct decisions,” he added.

The Finance Ministry Secretary criticises the implementation of the “GamataBalagarayak” rooftop solar power programme which was launched nearly 14 months ago.

“It has been reported that a significant number of distribution transformers have been reserved for the said programme, thus preventing any electricity customers from connecting their rooftop solar system to the electricity supply network,” he said.

“It has also been reported that the success rate of the first 850 distribution transformers offered under the first phase of this programme has been far from been satisfactory despite offering price amendments to the original RFP (request for proposals),” he continued.

“Considering that the need of the hour is to facilitate as much renewable energy as possible with the available infrastructure, it is advised that the Ministry and the CEB should cease to facilitate misadventures of any type, which result in incurring any further costs.”

The Treasury has noted that the CEB has been operating with a stock of debts to banks and dues to the Ceylon Petroleum Corporation in excess of Rs 150bn.

“The CEB does not seem to have any credible plan to manage its finances apart from requesting a tariff revision which appears to be the easiest yet the option with the most complications,” Mr.Attygalle said.

“Expenditure management is critical and the CEB should inform of the action to be taken in this regard,” he warns. “The Treasury notes with disappointment that the CEB has created and acquired assets, particularly with borrowed funds, that yet remain under-utilised or unused. Despite this dismal performance in project management that is costing the country millions of dollars every year, no action of significance appears to have been taken by the Ministry of Power or the CEB management to make the necessary administrative changes to arrest this situation.”

The CEB has been warned to keep its borrowings within approved limits.

“The Treasury is also of the view that the CEB must take a holistic view of its financial position and in financing its operations including re-examining its investment portfolio. It would appear that the CEB’s management is not taking rational decisions with regard to balancing its investments vis-a-vis its stock of debt,” Mr. Attygalle said.

The Treasury said the CEBs cash flow statement, balance sheet and profit-and-loss accounts reflect “financial indiscipline that is the result of a number of reasons, primarily the lack of accountability and oversight by its management.”

“The lackadaisical approach taken with regard to the recent power cuts and breakdowns, including system failures, has amply demonstrated the systematic failure by the CEB to address these issues, and its lack of accountability,” the letter stated.

(Source: The Sunday Times – By Namini Wijedasa)