CEB generates a true cost of Rs. 4 per unit of electricity: COPE Report
The recently tabled report of the Parliamentary Committee on Public Enterprises or COPE, has revealed that the Ceylon Electricity Board incurs a true cost of four rupees to generate a unit of electricity.
In its observations, the Committee has concluded that the public are forced to pay a higher amount for electricity, due to the actions of the CEB.
COPE has identified debt, purchasing electricity from the private sector at a high price, excessive administrative costs and the arbitrary actions of companies under the CEB, as causes for the high unit cost of electricity.
According to the COPE report, the CEB’s outstanding debt as of October 2015, amounted to 44,381 million rupees. The CEB owes a total of 13,570 million rupees to the Ceylon Petroleum Corporation and independent electricity suppliers.
However, the report notes that the CEB too is owed a large sum of money. As of December 31,2014, debts receivable by the CEB amounted to Rs.4,132.3 million.
Both public and private sector institutions are indebted to the CEB. Revelations in the COPE report highlight the fact that in 2014, the CEB incurred an expenditure of Rs.80,519 million , to purchase electricity from the private sector.
In 2015, a total of Rs.38,694 million was spent for this purpose COPE observed that electricity was purchased from the private sector at a cost of between Rs.35 and Rs.40 per unit.
Furthermore, the committee notes that expenditure had increased further as a result of the recruitment of 333 employees in violation of public enterprise circulars and through the recruitment of employees from manpower agencies, going beyond the approved cadre.
A total sum of Rs.849 million has been spent on various allowances for employees, which had been granted without the approval of the Cabinet or the Treasury.
COPE also highlights irregularities which occurred in the appointments of the Board of Directors of 20 companies falling under the CEB. Highlighting an example, the Committee notes that the Chairman of the CEB, is also a member of the boards of six companies under the CEB.
COPE observes that adopting several positions with regard to the same issues, has also contributed to the losses incurred by the CEB.
The COPE report adds that the problem has been exacerbated as a result of the CEB, the Subject Ministry and the Treasury not being represented at board meetings in these companies, and the unwillingness of the CEB to be accountable for the acitivities of these companies.
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