22nd July 2001
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Turn referendum into confidence vote

In a clear bid to avoid a defeat on the no confidence motion, President Kumaratunga prorogued Parliament. She obviously wants to swing the balance during the two months she has bought for herself.

By Victor Ivan

The current political turmoil is shaking not only the PA government but also the opposition parties and other groups. 

In a clear bid to avoid a defeat on the no confidence motion, President Kumaratunga prorogued Parliament. She obviously wants to swing the balance during the two months she has bought for herself. 

The President appears to be aiming mainly at the SLMC and trying through some means to replace some of the SLMC crossovers with PA loyalists. As an apparent cover up a referendum was brought in but signs are that it all will boomerang.

According to the constitution any matter that is referred to a referendum must first be brought before Parliament. On that basis I believe the August 21 referendum is illegal.

Even if the government wins such a referendum, the laws made on the basis of it, will have to be brought before Parliament and again put to a referendum.

When the question whether a new constitution is necessary is placed before the people, the opposition parties could turn this referendum into one which asks the people whether the PA should remain in office. If the government loses such a referendum, it could be interpreted as an end to the mandate not only of the government but also of the President.

According to the law on referendums it is not only necessary to get a majority of votes but it is also necessary that the vote polled should exceed one-third of the registered voters. 

The number of registered voters is 12.4 million-thus one third of it exceeds 4.1 million. Even at the last parliamentary election the PA received only 3.9 million votes. Even if the 197,983 votes polled by the National Unity Alliance and the 50,890 votes polled by the EPDP are added to it, the total is 4.148 million. However, the UNP, the JVP, TULF and Sihala Urumaya had polled 4.232 million votes. The picture becomes still worse when the SLMC vote is removed. 

The PA's narrow victory at last year's general election was secured in the midst of widespread allegations of violence and corruption. In a situation where the PA is fragmented, it would obviously not be able to get all those elements to function in the same manner. If the opposition is able to turn this referendum into one which brings before the people the question whether the President and the government should be permitted to continue in office and if the opposition manages to defeat the government in such a referendum, it will leave the government and the President with little or no legitimacy. Such a defeat will probably make matters worse for the PA in a no confidence motion and worse still at a subsequent general election. 

Meanwhile serious questions are arising about the effectiveness of the opposition parties and their leadership. 

Although the UNP is the main opposition party, I believe it has so far been able to show little by way of sound management. Bringing all parties in the opposition to a common programme, is an essential condition to defeat the government, but the UNP has so far not shown such political competence- except for the joint opposition meeting held on Friday in the aftermath of the police attack on demonstrators.

No doubt the largely sectarian outlook of the JVP has confused the anti-government struggle. But the UNP too could be held responsible for pushing the JVP into such a position. 

The UNP may be the biggest party, but others won't go along with it if it takes decisions on its own.Instead if the UNP consults other parties regarding decisions, it would contribute to the dignity of the other parties and leave less room for them to act in a sectarian manner. 

In a crucial and crisis situation such as what we face today, the leader of the opposition has an obligation not to take unilateral or arbitrary decisions.

As for the JVP I must tell it that its sectarian attitude will not contribute to the progress of that party. The JVP's indecision in regard to the question whether to vote for the no-confidence motion or not, confused the anti-government forces, and that confusion strengthened the position of the ruling party to some extent. 

What is most important to the people is not who defeats the government but whether this crisis will succeed in creating a democratic atmosphere with more democratic institutions. I believe the abolition of the executive presidency is essential for the achievement of a more democratic system, but I find that the UNP as well as the JVP are playing down that central issue.

The writer is the Editor of Ravaya

Dark side of power crisis

point of view
By Arjun Deraniyagala
Recent newspaper arti cles and TV pro grammes have focused on CEB's decision to increase prices for electricity attributing various reasons for the price increase. Allegations of mismanagement and corruption have been adduced as principal reasons for the drastic switch from being a profitable organization with a profit of Rs.4 billion and a year-end cash balance of Rs.3.9 billion in 1999 to a loss-making organization with a cash overdraft of Rs. five billion by year-end 2000.

Persons who level these accusations at the CEB should be asked a simple question: "Can mismanagement cause such a drastic change within such a short span of one year?" Or else were there other reasons for the reversal of CEB's fortunes?

The principal reason for the reversal was the deficit in hydropower caused by unexpectedly low rainfall both, during the second half of 1999 and throughout last year, and more recently into the first half of this year. In such a situation CEB's expenditure could have been easily kept under control by not increasing thermal power generation to compensate for the reduction in hydro generation. 

However, the shortfall in hydro generation, if not compensated through increased thermal generations would have automatically resulted in the introduction of power cuts by April last year and with the failure of each such successive monsoon the problem would have been aggravated.

However, due to the disastrous effects of the 1996 power cuts on the national economy, it was government policy to avoid power cuts. Accordingly, CEB was called upon to take emergency measures to counter such an eventuality. It was a difficult decision for the CEB. However, in accordance with government policy emergency measures had to be implemented. At the time the decision was taken, the duration of the crisis period was assessed to be that of a single monsoon (i.e. less than six months). On this basis hire of plants was the cheapest solution, both cost wise.

In hindsight it is easy for CEB's critics to calculate cost on the basis of the failure of three successive monsoons, now almost certain to be four. But hindsight is not the basis of decision taking when judgment has to be exercised. In January last year there was a judgment call and the decision was to immediately hire generators as was done in 1996. This judgment cannot be faulted other than in hindsight. The green light to go ahead was therefore given on the understanding that emergency power will be required just to tide over the failure of one monsoon since it was a reasonable expectation, but not an absolute certainty, that conditions would revert back to normal thereafter. This assumption was based on historical patterns of the monsoons.

It is correct to state that the generation plan has drawn attention to an increased risk of a power shortage in year 2000/2001. This is a result of some delay in finalizing and awarding the contract for the, privately owned, 160MW Combined Cycle Plant. The delay results from protracted negotiations on contract terms to win more favourable terms, which would result in long-term savings for CEB over the 20 year contract period. 

In 1999, the total generating cost was Rs.ll.l billion compared to sale of electricity amounting to Rs.21.3 billion (i.e. 5.-% of revenue). In 2000, the total generation cost was Rs.25.2 billion, compared to sale of electricity amounting to Rs.23.8 billion (i.e. 106% of revenue). 

The reason for the drastic increase in generation cost is in fact the unfortunate combination of a huge increase in thermal power generation, using oil at a time when world oil prices had tripled, the Sri Lankan rupee had been significantly devalued, and there was a substantial increase in purchase of thermal power from privately owned plants. These figures can be easily verified by the firm of international auditors which audited last year's accounts, or by the Auditor General himself.

If the cost of emergency power generation is compared with the cost of operating some of the CEB gas turbines, it will be quite apparent that hire charges for emergency generation plant is not the cause for the huge difference in generation cost. The reasons are as adduced above.

In conclusion, I would once again stress the urgent need for a good base-load coal power plant to generate thermal power at reasonable prices, and once and for all insulate the consumer against the uncertainties of the weather as well as the sudden escalation of world oil prices. The CEB, in all fairness has consistently endeavored to get this project going since the mid 1980's, but its efforts to use soft loan funds offered first by the ADB and now by the Japanese Government are stalled due to other considerations. Consequently the CEB has no choice other than to keep on adding more and more oil fired power plants into their generation plan as interim measures, still hoping that one day the coal power plant will become a reality. 

Oil-fired power plants generate at extremely high prices and the CEB is not permitted to transfer these costs to the consumer through a generation cost based tariff as proposed by the CEB. 

Within these confines, the uncertainties of generation reliability and sudden price hikes brought about by weather conditions and increase in world oil prices will, I am afraid, continue to be a reality which consumers have to face.

Mr. Deraniyagala was the former Chairman of the CEB 

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