Deserts And Havens

By Rusiripala Tennakoon –JANUARY 29, 2022

Rusiripala Tennakoon

Today the country is facing many problems the effects of which have been aggravated due to several reasons. Some are beyond our control. Some are not only confined to us as a country. There are also some caused and continuing due to lack of proper attention. While the macro situation will have to be dealt with according to a well-planned strategy, there are many other areas where a proper address would result in providing an impetus to steer away from the plunging economic deterioration.

In such a situation it is a tragedy to note that many portrayed as experts, both business and economic, are performing their acts through the media exhibiting their eloquence with hardly any regard of the precipitations caused by such to damage and harm our image instead of rendering any help to tide over the current heightening crisis. The offered formulae as ostensible solutions are awe inspiring satiating only those with an appetite and more interested in finding errors and omissions in the decision-making process. They do not display any intention of proposing a desirable course correction plan to sail the ship out of the rough seas in the stormy weather. Their sirens alarmingly continue to toll the knell of a dawning doom leaving no room for any hope or expectation. In the process heavily contributing to promote conundrums spreading well beyond the domestic scenario adding to the disorientations already existing.

The country needs to clearly swim away from the bad tidal waves and breathe some fresh air to continue the long journey ahead. We have to focus on short term survival stratagem as a priority. It is in this context it becomes important for us to probe into some of the escape routes recommended by those players in the arena. Hilariously our cinematographic minds are taken back to the time of a Great Film of the 60s, “The magnificent Seven” 1960 Box Office hit by John Sturges, with a popular cast headed by Yul Brynner reminding us how seven brave men with their own plans defeated a group of bandits in a Mexican Village and saved the village from the influence of the villains. A big business tycoon in Sri Lanka has selected this as the topic of his prescription to overcome the economic morass we are in. I was wondering why he chose this name. Because it talks of one villain headed by a group of hooligan outlaws and a hero with six brave men. Is he drawing any similarity or hinting at some comparison with the current situation? Be that as it may, Yul Brynner played his role as a clever gun man ending the show as a victory! But the current Magnificent Seven author has sadly forgotten the dire needs of the day. His formula as many others runs over many years (decade long) which we have plenty of time to carefully consider later while there is an urgency facing us today to give some first aid first.

In this highly toxic back ground we have to turn inwards, open the cupboards, not in search of skeletons, but some valuables lying dormant to be converted to something verifiable and tangible like our Governor CBSL who never succumbs, deciding to convert a part of the Gold reserves to a “Fistful of Dollars” (resembling Clint Eastwood). He has chosen the best time to sell when the gold prices were at a peak! Promising to buy back and replenish when it is cheaper to do so.

Now coming back to aspects of realty that exist in the physical world, let us look at a few things that might provide quick avenues to dampen our drying throats in a realistic sense.

Energy Crisis

This is something which has culminated to the current climax over a period of time. Engineers blame Power Ministers who did not know a KW from a MW as responsible for this state of affairs. Politicians blame the high salaries, inconsiderate perks and poor management and planning of the bureaucracy and administration. We from outside, see both these as contributory, while waste and corruption attributable to both sectors being the dominant factor. In their quest for quick yields, matters of small interest were left unattended and neglected forgetting that many smalls which add up to very big in the end. Mini-Hydro and other renewable energy sources, solar energy and other novel industry innovations were given scanty and poor treatment by the decision makers as well as the bureaucrats. Sometimes both jointly in collaboration.

It is with great aversion that we mention the unwanted delays in Domestic and Mini Solar projects. Just to quote an example, one company engaged in fixing and installing Solar power units had the following details to report on;

From November 2021 there are 7 system installations, all completed the required formalities awaiting to be connected to the Grid.

There is a delay in obtaining the initial clearance for the system installations .It is reported that they will take at least 20 days to visit from some of the CEB offices. If a survey is conducted with all the system installing companies the actual picture could be had. If the CEB pays a little more attention to the domestic solar system installations a significant capacity generation could be expected.

The situation in the Mini-Hydro sector too is bad. Due to the tug-of -war between the PUCSL and the CEB the Power Purchase Agreements are kept in abeyance. There are at least 17 to 18 projects with a total generating capacity of nearly 18 MW that can be added to the National Grid held up due to this.

Recently the State Minister Hon Dissanayake initiated a program to review the progress in the renewable energy sector and has taken some important positive steps to avoid delays. Sustainable Energy Authority vested with all powers to act as a one stop shop in granting the required approvals is now made to start this function after many years. This will resolve many hardships and issues faced by the MHP developers at various state organizations.

Some New Avenues To Be Explored

We remember the highly controversial MCC agreement that became a national Issue before the last general election period. It was revealed that the Govt in power had agreed to proceed with the MCC disregarding several adversities pointed out to exist in the project proposal. A special land project envisaged under the MCC at a budgeted cost of USD67 million was designed to identify under utilized state land that can be put to more productive use and maximize rents from lands that the government leases. The project also envisaged to increase the tradability of lands including those of small holders. It was known that all lands where govt. institutions such as schools, hospitals, court houses, Kachcheri buildings etc. were to be classified as unproductive land first with little other information about what could happen next. The incumbent Govt came to power with a firm promise and commitment not to proceed with this highly controversial agreement which was believed to be a threat to our national Security, Independence of the Country, the diplomatic neutrality and the sovereign rights of the people. While we have a sigh of relief, that MCC is no more, there are many things for us learn from their findings.

The main focus in relation to our discussion is the Under Utilization of lands. It is also disclosed that approximately 80 percent of the land extent of the country is owned by the State through multiple ministries. There is a high hidden value in this. That is if the roof spaces of these buildings and any extra land areas that remain unutilized could be used to generate Solar Energy under a suitable program it would be a new opening for the expansion of the solar power industry.

As an Initial step the School network could be used for this. Under a Tender award system if the school roof spaces could be allowed for solar power generation to the private investors, the land utilization value could be tremendously increased immediately in a manner useful to the country in a number of ways. The education department could charge a royalty from the investors based on the capacity generated as a percentage factor while the system will absorb the electricity bill of the school under the net payment scheme of the CEB or LECO. The agreement to be entered into with the investors could incorporate additional clauses such as the maintenance of the roof, the building structure etc. etc.by the investors. The school in addition to the benefit accruing as a savings on the electricity bill will be able to provide power to the children at no cost for their IT educational requirements.

While this will benefit the education system the other departments too could come in and implement the same scheme in their premises under state patronage. Mahaweli authority was charging around 6% of the generation income from MHP developers until lately and if the schools too can charge a similar percentage from the Solar developers, it would be a great relief for them too. Perhaps they will be able to pay a higher percentage from their income under this scheme because of the savings they can make on the land costs.

Fuel Crisis

All are talking about the fuel crisis. The Energy Crisis is also accounted for as a part of the fuel crisis. But in actual fact the CEB has to be entirely responsible for the crisis situation they are faced with now for failing to supply fuel backed electricity. They have not been able to pay the CPC over a long period of time. The CPC operating as a commercial venture cannot be expected to bear the cost burdens of several other state institutions. In fact, the Sri Lankan airlines owe them a large sum overdue for a long time. CEB too owes them large amounts running into billions of Rs. according to information. Therefore, either the CPC will have to be funded by the treasury or the treasury should fund the Sri Lankan Airlines and the CEB.

This calls for the immediate necessity for the CPC to balance their income and expenditure based on the volume of business they handle on a commercial basis without being a burden on the treasury. This whole episode reflects a very bad form of administration prevailing at the Treasury level which keeps on passing the responsibility between state institutions instead of solving the issues in a systematic manner. If a careful study is made Treasury operations are at the base of all the financial failures and blunders in the SOEs. All SOEs have treasury representatives in the Boards as ex-officio Directors. They have completely failed in their duties to monitor properly what is happening in those places.

In fact when the Peoples Bank Board of Directors were summoned before the COPE committee of the parliament to investigate into the audit queries raised about various financial irregularities there, during the last regime, the treasury representative too was there facing the inquiry as another director. We have to ask the question whether he was held responsible by the treasury in any manner for all the short comings, lapses, frauds and wastage that were highlighted in the Audit reports and endorsed by the COPE as wrong doings on the part of the Directors. This bears ample proof as evidence of the role played by the treasury officials indirectly contributing towards the financial irregularities in almost all SOEs in this country.

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