Sri Lanka power sector facing bankruptcy: minister

Oct 24, 2011 (LBO) – Sri Lanka’s power utility has lost 167 million rupees a day in August amid dry weather and power sector faces bankruptcy unless tariffs are adjusted, power minister Champika Ranawaka has said. The daily numbers points to a monthly loss of about five billion rupees. Sri Lanka has two state run power distributors, Ceylon Electricity Board and Lanka Electric Company.

Under on-going power sector reforms, different parts of the sectors are ring-fenced.

“We should remember that if we want power 24 hours it has to be done with thermal energy and it is expensive,” minister Ranawaka told parliament.

“People must be prepared to pay that. If not those intuitions cannot be prevented from going bankrupt.”

In the past Sri Lanka’s rulers have engaged in comprehensive energy price deceptions by funding energy subsidies by Treasury transfers from taxes collected from other sources such as food. The Treasury has also taken on energy sector losses adding to national debt.

Despite knowing full well that losses have to be paid by citizens by taxes in a different way many third world politicians engaged in rampant demagoguery claiming that the ‘government bears the burden.’

Even now