Sri Lanka power ministry defends new tariffs

Dec 15, 2010 (LBO) – Sri Lanka’s power ministry has defended new subsidies to state entities in tariffs proposed by the regulator for 2010 and rejected concerns that the move increased the opacity of government fiscal operations.

The ministry says offices such as government agents give essential services to the public and cannot afford the general purpose rate.

Ending Subsidies

Minister Ranawaka says the increases proposed in the tariffs for 2010 are aimed at making the CEB financially strong and not dependent on Treasury subsidies, which are basically taxes collected from the people.

“CEB does not have to make profits, but we want to end losses.”

Under Sri Lanka’s new power law, any such subsidy has to be paid to power distributors before they start delivering.

The latest ‘roadmap’ published by authorities aim for the CEB to break even by 2014 and move to profits in 2015.

The regulator has also proposed increases to industries, which have been getting cut rate power, and also increased the 60 to 90 unit category of household users by one rupee a unit.

The bulk of the subsidy of the CEB goes to household users. But some domestic users have to pay very high rates, such as 28.60 ru