Who is telling the truth about the electricity crisis?

Posted on March 30, 2016  /  0 Comments

electricityThat was the title of the two-hour TV talk show at ITN that I participated in yesterday. One does not expect new knowledge to emerge from a talk show, but this one was an exception. Illuminating information was disclosed by the Additional General Manager of the Ceylon Electricity Board in response to some statements I made. The disclosures can be seen in the Daily FT and Ravaya in a few days. Here below is my conclusion.

The problem is structural. The solution has to be structural too. There is no point in proposing behavioral solutions.

The largest enterprise in all of Sri Lanka (other than the armed forces) should not be going hat in hand to international development agencies for core investments needed to maintain a critical national infrastructure. As a commercial enterprise with massive and assured cash flows, it should be able to raise its own funds.

The structural separation that was decided on by the 1999-2001 Electricity Steering Committee that included all stakeholders should be implemented forthwith. That way, the Transmission Licensee (TransCo) will be able to charge the appropriate rates for the services it provides. It could make the case to the PUCSL that the appropriate rate must include the cost of capital that it needs to raise to build and maintain a robust grid.

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