CPC repaid all loans, is on path to becoming financially stable - Minister

Minister of Power and Energy Kanchana Wijesekera has assured that the Ceylon Petroleum Corporation (CPC) is on a path towards achieving financial stability.

Participating in a media briefing held at the Presidential Media Centre themed ‘Collective path to a stable country’, Wijesekera expressed confidence in the government’s program, led by President Ranil Wickremesinghe, to promote financial stability in both the Electricity Board and the Petroleum Corporation.

Meanwhile, addressing accusations from various parties regarding the electricity price revision, the Minister highlighted that in June’s price revision, the government provided a significant 55% relief in electricity prices to 3.5 million out of the total 6 million consumers.

Addressing the press conference the minister said;

In the past year, our country faced challenges such as fuel queues and power cuts. However, under the decisions made by the new government, significant progress has been achieved in eliminating fuel queues and ensuring continuous electricity supply.

The revision of electricity prices took place in January and June, benefiting around 6 million household consumers. A 55 per cent price reduction was implemented for approximately 3.5 million consumers using 30 to 60 units of electricity.

Additionally, concessions were provided to the industrial sector during the price revision. There are approximately 40,000 registered religious shrines, and about 15,000 of them consume less than 30 units of electricity.

The electricity board had been facing significant financial losses, with a total loss of Rs. 409 billion in the past.

However, last year’s loss was reduced to Rs. 167.2 billion. The government has successfully completed all payments to suppliers and has created a favourable environment for initiating new renewable electricity projects.

Additionally, steps have been taken to remove a Rs. 120 billion debt from the balance sheet of the Petroleum Corporation, resulting in the electricity board’s improved financial position.

With the strengthened financial position, the electricity board plans to resume maintenance work and provide new connections that were put on hold in the past three years.

Out of the 36,000 new connection applications received, 20,000 connections have already been completed, and efforts are underway to fulfil the remaining connections within the next two months.

Furthermore, the Petroleum Statutory Corporation has established contracts with two new agencies for a consistent supply of fuel since September last year.

These agencies are scheduled to commence fuel supply by the end of this month, and the first fuel shipment is expected to arrive in Sri Lanka at the same time. Around 150 fuel stations have been registered by these agencies so far, ensuring reliable fuel availability.

After the arrival of their ship in Sri Lanka, fuel distribution was initially carried out under the name of Ceypetco.

However, future distribution will be conducted under their own company name. To address outstanding debts, including those owed to Indian and Iranian creditors as well as fuel suppliers, the Ministry of Finance has imposed a tax of Rs.50 per liter of fuel during distribution.

The Petroleum Corporation has successfully repaid all loans owed to the Bank of Ceylon and the People’s Bank, resulting in its strengthened financial position.

Despite this, the restructuring process of the Petroleum Corporation will continue as planned. The revised draft for the restructuring of the Electricity Board has been forwarded to legislators, and once received, it will be submitted to the Attorney General and subsequently presented to the Cabinet for recommendations.

There is a possibility of passing a new act in this regard. There is no pressure on the employees of the electricity board, and efforts are being made to verify the status of employees who have completed NVQ courses but are currently unemployed.

Legal actions are being taken against fuel stations that failed to maintain oil stocks during the fuel price revision. One such station, the Rajagiriya petrol station, has already been taken over by the government.

Complaints have been received regarding 120 fuel filling stations that did not comply with stock maintenance requirements during fuel price revisions, and future plans involve implementing appropriate legal measures.

The decision has been made not to hire new employees, as the current number of employees in the Ministry and its associated institutions is deemed sufficient.

The President, along with the Prime Minister and the government, has planned to enhance the effectiveness and efficiency of government institutions based on collective decisions.

Investors who previously submitted tenders for renewable energy have not yet responded. It has been discovered that some of the organizations that were awarded tenders have sold them to other entities.

As a result, the tender call for 500 megawatts of renewable energy is expected to be cancelled in the upcoming cabinet meeting, and a fresh tender call will be issued.

Additionally, the necessary permissions have been granted to the ‘Adani’ company for the construction of a 500 MW renewable energy power plant. Their energy generation is projected to be integrated into the national grid by December of next year.

While the majority of employees from these institutions have expressed their desire for the restructuring of the Petroleum Corporation and the Electricity Board, some protests have emerged due to concerns regarding potential loss of trade union privileges.

However, granting salary increments and bonuses to loss-making organizations is not deemed acceptable. Such practices are not prevalent in any country worldwide. A 25% salary increase every three years for the 24,000 employees of the Electricity Board has been discontinued.

Salary increments are allocated exclusively to employees who are actively working and demonstrate productivity.

It is a common practice worldwide to provide salary increments selectively rather than uniformly across an organization. Similarly, bonuses distributed in April and December is contingent upon the company’s profitability and is awarded solely to employees who contribute effectively.

In collaboration with Indian loan assistance, plans are underway to equip government institutions and religious sites with solar panels. Each religious place will be provided with a five kilowatt solar panel, while government institutions will receive solar panels suitable for their roof sizes. The implementation of this project is scheduled to commence within the next two months.

Attention has also been directed towards exploring nuclear energy options, with plans to incorporate it into the 2023-2042 generation plan.

A comprehensive evaluation will determine the suitability and viability of nuclear energy for our country, and subsequent decisions will be made accordingly.