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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Electricity should be privatised: Amunugama

Electricity should be privatised: Amunugama

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K.Haputantri

K.Haputantri
Co-Admin
ELECTRICITY SHOULDBE PRIVATISED: AMUNUGAMA
Daily Mirror

PRICING FORMULA NEEDED FOR POWER:RANAWAKA SEE RELATED STORY ON PAGE 4

International Monetary Co-operation Senior Minister and Finance and Planning Deputy Minister Sarath Amunugama yesterday said it was high time the electricity industry moved beyond state monopoly and was opened to the private sector.

Sam2020


Equity Analytic
Equity Analytic
I also believing Electricity have to privatize,not only Electricity where the more people involve places like petroleum.I can remember when the last provincial election time power ministers son was a one of the candidate,how many young people were facilitate to him......including one of my friend he never ever have had interest with politics

But after election he never come to that area

That's the expectation and some are satisfied political animals,and we are the people feed them & drink them...

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Sam2020 wrote:I also believing Electricity have to privatize,not only Electricity where the more people involve places like petroleum.I can remember when the last provincial election time power ministers son was a one of the candidate,how many young people were facilitate to him......including one of my friend he never ever have had interest with politics

But after election he never come to that area

That's the expectation and some are satisfied political animals,and we are the people feed them & drink them...

LECO & Petroleum need to be privatized.. seriously.. If LIOC can go well with minimizing its losses why should a company that make more profits should go down? Stupid administration, overheads, what else?

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
@smallville wrote:
@Sam2020 wrote:I also believing Electricity have to privatize,not only Electricity where the more people involve places like petroleum.I can remember when the last provincial election time power ministers son was a one of the candidate,how many young people were facilitate to him......including one of my friend he never ever have had interest with politics

But after election he never come to that area

That's the expectation and some are satisfied political animals,and we are the people feed them & drink them...

LECO & Petroleum need to be privatized.. seriously.. If LIOC can go well with minimizing its losses why should a company that make more profits should go down? Stupid administration, overheads, what else?

All the government sectors need to be privatised in the sake of better management, if possible the parliment also. lol!

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
A much needed move. Should have been done long time before.

Unfortunately it will be a challenge to bypass our patriots and dumb trade unions.

They will cry and say we need to secure these companies for young generation. However they easily forget that government sector businesses are not practical especially in 3rd world countries.

I really wish these privatisations will be less than 50% stakes with the control of the management. Also stake for pay off debt deals.

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Our patriots and trade unions..... Sad

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=71032

Champika flays Amunugama for CEB privatisation proposal

Power and Energy Minister Patali Champika Ranawaka yesterday lashed out at Deputy Finance Minister Dr. Sarath Amunugama over the latter’s recent claim that the private sector should be allowed to hold stakes in the Ceylon Electricity Board (CEB).

Ranawaka said that the CEB would not be privatized, but it would introduce certain management reforms to make it a profitable government institution.

Ranawaka asked why Dr. Amunugama had failed to implement his strategies when holding key Cabinet portfolios in previous governments, especially in the Kumaratunga administration.

Dr. Amunugama on Monday claimed that the electricity sector should be released from the state monopoly and opened to the private sector.

Amunugama, a retired top civil servant, also noted that the international financial institutions such as the World Bank and the IMF had pressured the government to open the power and energy sector to the private sector and highlighted the CEB and Ceylon Petroleum Corporation losses.

Minister Ranawaka stressed that those who spoke about the losses incurred by the CEB did not take into consideration the invaluable service that institutions provided to the ordinary people and industrialists.

The CEB was able to provide an uninterrupted supply of electricity to the industry and service sectors, despite the recent drought and the halting of costly power purchases from the private sector, Minister Ranawaka said.

Ranawaka noted that an agreement had been signed by the UNP-led UNF government in 2002, to privatise the CEB with the formation of six separate companies.

Meanwhile, CEB trade unions accused Dr. Amunugama of working to fulfil the needs of international lending organizations, such as International Monetary Fund (IMF) and the World Bank.

Committee member of the CEB Joint Trade Union Alliance and General Secretary of the Lanka Viduli Sewaka Sangamaya Ranjan Jayalal said: "We strongly oppose the statement made by Dr. Amunugama that the CEB should be opened to the private sector."
The pro–JVP trade unionist said that it was correct that the CEB was facing a severe financial crisis because of the present management and it needed to be subject to reforms but they would not allow the authorities to privatise the CEB.
Jayalal said that a comedy was being enacted by two government Ministers, Dr. Amunugama and Ranawaka. Minister Ranawaka was trying to be a cardboard hero while the Dr. Amunugama was explaining the government’s next step, which was to privatise the CEB.
Currently, the CEB is incurring a loss of Rs. 167 million a day; it sustained a loss of Rs. billion in 2011 and a loss of Rs. 45-50 billion was projected for 2012.

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Privatisation is not the ideal solution for these issues.If private sector can make profit from these organizations why not government sector ? Problem is with the management and political intereferences.Those factors should be corrected. It can be done in even so called 3rd world countries.
There should not be monopoly by private sector.Otherwise they will control everything and no one can interfere.If there is competition between government and private sector then Private sector can not dance as they wish.
So in overall Government should keep institutions which they own and ONLY management should be handed over to competent people and should minimise the political intereferences.And government need not to keep the monopoly and Private sector should come in to these bussinesses.
PS :- One may say this is patriotic bullshit Razz

8Electricity should be privatised: Amunugama Empty CEB will never be privatised: Minister Thu Jan 24, 2013 9:54 am

K.Haputantri

K.Haputantri
Co-Admin
CEB will never be privatised: Minister
Daily Mirror

People must be aware that they can reduce the monthly electricity bill if they use CFL bulbs instead of filament light bulbs at their homes and establishments

Asserting that the Ceylon Electricity Board (CEB) will not be privatised, Power and Energy Minister Patali Champika Ranawaka said a change in the CEB management was extremely necessary to make it a com

mercially viable state venture. He said the people must be aware that the CEB had nothing to do with the revision of electricity bills because that is the responsibility of the Public Utilities Commission (PUC).

“However, the people must also be aware that they can reduce the monthly electricity bill drastically if they use CFL bulbs instead of filament light bulbs at their homes and establishments,” the minister said. “The 2002 plan by the then United National Party (UNP) Government to privatise the CEB by fragmenting it into six zones is still on the drawing board and very much in force. Ironically, the policy of the present government is to make the CEB a strong and commercially viable state venture that provides an essential service to the country while not becoming a burden to the people and a liability to the government. It is a sense of relief to note that the CEB is marching towards achieving these objectives slowly but surely.” The minister said the CEB had the strength to provide power to the entire country, 24 hours a day, seven days of the week. The drought experienced during the past six months of last year resulted in a negative impact on the industry, agriculture and livelihood of people in other countries in the region because of power cuts ranging from six hours to twelve hours. “But the CEB provided uninterrupted electricity to the entire country, the industrial sector and private and state establishments. The plus factor was that the CEB was in the process of phasing out the purchase of costly thermal power from the Private Power Providers,” he said. “Consumers must not forget that there was an eight-hour power cut during the drought in 2001. The power cut in 2001 which hit the industrial sector dearly brought the economy to a negative growth. With the cooperation of consumers who responded positively to the Power and Energy Ministry’s request to save power and to reduce their monthly bill under the slogan ‘Today for a better tomorrow’ the CEB saved Rs.17 billion last year. There will be notable changes in the management of the CEB and Lanka Electricity Company (LECO) this year to further strengthen the ongoing reforms and make them commercially strong,” the minister said.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Whitebull wrote:Privatisation is not the ideal solution for these issues.If private sector can make profit from these organizations why not government sector ? Problem is with the management and political intereferences.Those factors should be corrected. It can be done in even so called 3rd world countries.
There should not be monopoly by private sector.Otherwise they will control everything and no one can interfere.If there is competition between government and private sector then Private sector can not dance as they wish.
So in overall Government should keep institutions which they own and ONLY management should be handed over to competent people and should minimise the political intereferences.And government need not to keep the monopoly and Private sector should come in to these bussinesses.
PS :- One may say this is patriotic bullshit Razz

Well u have a very good point imo..... But honestly in this country politicos take the benefit all the time.. Their say is the last.. So even if the management is handed over, I doubt whether the required outcome can be obtained or not.
How on Earth these corrupted politicos keep away from their corrupted acts? Mad Mad
These are places they can put their supporters to work, these are the places they can steal..

OnlyGuru


Stock Analytic
Stock Analytic
@Redbulls wrote:
@smallville wrote:
@Sam2020 wrote:I also believing Electricity have to privatize,not only Electricity where the more people involve places like petroleum.I can remember when the last provincial election time power ministers son was a one of the candidate,how many young people were facilitate to him......including one of my friend he never ever have had interest with politics

But after election he never come to that area

That's the expectation and some are satisfied political animals,and we are the people feed them & drink them...

LECO & Petroleum need to be privatized.. seriously.. If LIOC can go well with minimizing its losses why should a company that make more profits should go down? Stupid administration, overheads, what else?

All the government sectors need to be privatised in the sake of better management, if possible the parliment also. lol!

ha ha ha! Nice one. And then get listed. As a result @ cse you can buy anything... Very Happy

Sam2020


Equity Analytic
Equity Analytic
@OnlyGuru wrote:
@Redbulls wrote:
@smallville wrote:
@Sam2020 wrote:I also believing Electricity have to privatize,not only Electricity where the more people involve places like petroleum.I can remember when the last provincial election time power ministers son was a one of the candidate,how many young people were facilitate to him......including one of my friend he never ever have had interest with politics

But after election he never come to that area

That's the expectation and some are satisfied political animals,and we are the people feed them & drink them...

LECO & Petroleum need to be privatized.. seriously.. If LIOC can go well with minimizing its losses why should a company that make more profits should go down? Stupid administration, overheads, what else?

All the government sectors need to be privatised in the sake of better management, if possible the parliment also. lol!

ha ha ha! Nice one. And then get listed. As a result @ cse you can buy anything... Very Happy

@OnlyGuru
Ha haaa you nicely said that brov.....Don't forget you might Waite for buy SLIC shares after 2015 isn't it...
If this decision taken Ten Fifteen years before still Harry will control SLIC...Rally will start (I read one of the article government want to see more Government enterprises @ CSE )

There is a country called Russia,more than 50% of the economy control by central government.....Think about the Economic In-fact of the chine's government own companies are they like NGO in Sri Lanka, No they all making profit.Not like our heavy cows.

K.Haputantri

K.Haputantri
Co-Admin
Privatisation of The Ceylon Electricity Board
January 26, 2013, 6:21 pm
SUNDAY ISLAND

by Charitha P de Silva

I was delighted to read in Thursday’s ‘Island’ that Dr Sarath Amunugama had suggested that the C.E.B. should be privatized. Sarath is one of the most intelligent and educated men in the Cabinet. In suggesting what he did he was only playing the role of the child who pointed out that the Emperor was naked.

Let me for the benefit of non-ideologues point out a few truths:

No State Owned Enterprise (SOE) anywhere in the world, but particularly in Sri Lanka, can ever run a commercially oriented enterprise as efficiently as the private sector. There are a number of reasons for this. The first thing is to accept that it has nothing to do with any difference in the intellectual capacity of managers in the public and private sectors. In fact in the earliest days when the leading firms were British (the thirties and forties) most private sector executive trainees were sportsmen who excelled at games such as Cricket and Rugby rather than shone as scholars. This recruitment policy was based on the belief that such games developed team spirit that would contribute to the success of organizations. There was some truth in this because a well knit team with a good captain was often more successful than a collection of prima donnas. The point I wish to emphasize is that my belief that private sector management of a commercial enterprise is superior to public sector management is not based on a belief that private sector managers are cleverer than public sector managers.

The reasons why private sector management is more effective than public sector management are many, and universal. Before I list them out I will first dispel a commonly held fallacy that has resulted in much misunderstanding about the very nature of Privatisation. The essence of Privatisation is that management of the SOE is transferred to the private sector. Ownership does not have to be transferred. Thus the sale of ‘Crown Jewels’ argument, the favourite theme of ideologues, is immediately blunted. If the CEB is privatized government assets do not have to be sold. It is management control, and only management control, that necessarily must be transferred.

Now for some of the reasons why the CEB (and every other SOE) are necessarily inefficient. The first is that it is a political entity rather than a commercial entity. It is a vital source of political patronage. The politicians in charge, directly and indirectly, look upon it as a source of employment. Jobs are given freely to their friends and relatives. Every SOE inevitably becomes over-staffed. Those who are given the jobs are not necessarily the most qualified or suitable. Everybody knows this; not even the politicians would have the gumption to deny this.

There is no incentive whatsoever to hard work in an SOE. An employee’s rewards, in salary and bonuses (if such there be) are not based on how hard or efficiently he works. This is utterly demoralizing. Inevitably, everybody does the minimum. If any citizen doubts this he should visit a few SOE’s and compare the atmosphere of total relaxation therein with a visit to a few private sector offices. The contrast is stark.

In an SOE there is political interference with management decisions. As a result of this discipline is very poor. Managers soon learn that it does not pay to attempt to discipline lazy or incompetent workers.

In an SOE nobody can be dismissed for incompetence. Our labour laws are so heavily weighted in favour of the employee that even in the private sector it is becoming almost impossible to dismiss an employee for anything short of dishonesty.

In an SOE employees do not have any concern for the success or even survival of the enterprise. Their employment is secure.

It is a total pipe-dream for politicians to imagine that any tinkering they can do with the CEB could make a material dent in its annual losses. It is estimated that the loss in 2012 would be in the region of Rs 50 billion. Has any politician cared to think of how much could be done for the poor in terms of health services and education, for instance, if these losses can be drastically reduced?

Has even an ideologue forgotten what it was like before telecommunication was privatized? What bribes and time it took to get a telephone line? Politicians and trade unions were vehemently opposed to the privatization of Telecom in 1996 when I attended a meeting (along with other private sector leaders) in Paris with H.E. Chandrika Kumaranatunge, World Bank representatives, Donors and potential iinvestors. I recall that in response to a query from a potential investor, the President explained that Privatisation of Telecom had been deferred because of the opposition from Trade Unions. I urged the President to ignore the Unions and go ahead with the Privatisation because millions of citizens would benefit, and it would be a political triumph. I pointed out that it could be done by de-regulation rather than by a wholesale transfer of assets. She had the courage and wisdom to make the decision within a few weeks, and it turned out to be a wonderful success.

A wise and courageous leadership today would re-examine its ideological opposition to Privatisation. A pragmatic re-think of ideological shibboleths is called for. The JVP would be upset, but should we worry?

(The writer is a former Chairman of Aitken Spence)

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I have 38 years Executive experience in Public Sector

From An assistant Accountant to ADDl G.M. and Vice Chairman and Chairman

Public Sector inefficiency is manly due to unnecessary political interference and Appointment of Relations and Friends to manage those
institutions

Even Under mahinda Chinthanayya situation is same or may be verse
All corruption start from the Top
No proper reward system or Penalty system Most of Politician do not
allow honest officers to work independently to achieve the stated objectives of the organization

There are very efficient public sector organizations in Singapore
Sigapoor Air line is a govt organization

The problem is not the form of ownership

Problem is Directly connected with corrupt politicians. 95% of our Politician are 100% corrupt I think Mr Amunugama Who is from University of Ceylon peradeniya belong to balance 5%



Last edited by D.G.Dayaratne on Mon Jan 28, 2013 7:01 am; edited 4 times in total (Reason for editing : typing mistake)

bullrun

bullrun
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Most who promote privatization could not even be able to write or read if the public sector was not there. Those who studied from Government schools and later became rich (as they feel) now advocate privatization. It is like the Sinhala saying “gangen watura bee muhudata awedeema wage"

What our mission should be to strength private sector while safeguarding the public sector for future generation not for those who forget their past and poor relatives in villages.

Kanaga


Stock Trader
"Public Sector inefficiency is manly due to unnecessary political interference and Appointment of Relations and Friends to manage those
institutions

Even Under mahinda Chinthanayya situation is same or may be verse
All corruption start from the Top
No proper reward system or Penalty system Most of Politician do not
allow honest officers to work independently to achieve the stated objectives of the organization

There are very efficient public sector organizations in Singapore
Singapore Air line is a govt organization

The problem is not the form of ownership"

If some one start working in CEB he falls into trouble. Do nothing other than say yes to what the politician decision makers want you are safe. CEB should be allowed to run on its own without any interference. Private power projects which are very costly are forced on CEB. Tenders are all interfered. Just to stay in there posts people bend and do what the decision makers want.
What it cost has to be charged from the consumers for Electricity. In the name of helping the poor the pricing is too low for the Poor. The lower block tariff has been unchanged for many years. This is just to collect votes. In real terms the lower block rates for electricity for domestic consumers has been decreasing. With all this inflation in the country every item price goes up including basic items like bread milk and all food items. CEB should be allowed to increase the tariff in a similar manner. If the government wants to subsidize electricity to the poor it must meet this subsidy by themselves.
Blaming CEB for most of the losses it makes and this is due to only poor management is totally unacceptable.
When all political interference can be stopped and CEB can be allowed to work fully independent it can perform well.
Please note the two subsidies of CEB both LTL and LECO are headed/manned by Sri Lankan Staff with lesser interference and they are said to be financially sound LECO buys at very low price from CEB and makes profit only selling to high end consumers in Towns. CEB is forced to do loss making RE projects and sell electricity mostly to the rural poor at very low price. LTL effectively Generates as a private Producer and sells to CEB at very very high price the electricity Generated on an agreement which is cost based. They make much profit at the cost of CEB running at a loss.
With such things happening How can CEB not run at a loss?
We see the latest that LECO is commissioning a Thermal Power plant in Chunnakam where earlier a government forced Chinese Power project with old non serviceable diesel engines became a white elephant and had to be scarped!
If LECO engineers and LTL Engineers can run there organizations well why cannot CEB do the same.
As said earlier most of the miner staff are only recruited to fill the requirements of the Political decision makers. I have witnessed many of the Power station staff remain under the influence of liquor in the evening. How can very costly power plants be operated with that type of operators. No disciplinary action can be taken against them. If complaints are made the person complaining gets transferred quickly to a difficult station.
There was a time the Chairman CEB remained Chairman continually for more than 10 years even with change of Governments. Now we see Chairman CEB getting changed now and then. How can proper Management take place. I find such learned Dr Amunugama coming with such an idea without understanding the realities. It was the recommendations of the WB to go for private power and now we know how much costly it is. An open discussion on this is essential before any implementation.

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