Court raps Central Bank over promotions
A retired senior economist of the Central
Bank last year was critical of the Central Bank and some of its
actions saying there was no independence at the bank. "I am
able to say this because I have left the bank. If I was still a
staff member I will toe the official line and keep my lips closed
- so to speak," he told a highly amused audience.
of the Central Bank - whether it takes an independent view on the
economy or toes the government line - has been the subject of debate
for many years. The common verdict is that the bank is a highly
politicised institution particularly because the governor is a political
appointee. Officers are reluctant to express their "honest"
opinion on various issues for fear of incurring the wrath of superiors
and risk being victimised.
to articulate independent views on the economy is not the Central
Bank's only problem. Promotions to key positions at the bank, considered
one of the most crucial institutions in the country, have been questioned
by the Supreme Court.
The court, in
a judgement last week delivered by Judge Mark Fernando along with
two other colleagues, passed severe strictures on the recruitment/promotion
procedures of the bank. It held that the appointment of W.A. Wijewardene
as a deputy governor was irregular as proper procedures had not
It was a landmark judgement and old timers of the bank say such
incidents are rare in the bank's history. A detailed report of the
court case is on page three.
The court said
the criteria for selection in the appointment of Wijewardene was
"uncertain, undisclosed, confusing, anomalous and inconsistent,
with no indication of weightage and the second respondent (Governor
A.S. Jayawardena) as well as the board had failed to evaluate the
candidates by reference to those criteria and failed also to comply
with the prescribed procedure of obtaining the candidate's self-assessments.
was also a lack of consistency in the application of the criteria.
Over a nine-month period the board appointed five AG's (assistant
to the governor) - Ms. A. in September 1999, three AG's in May 2000,
and Mr. J. in June 2000. In the case of Ms. A. and Mr. J, the appointments
were by the board first to the special grade followed by designation
as AG but the other three AG's were appointed by the governor first
as AG's and then promoted to the special grade.
of the former two was not by reference to any special area of responsibility
unlike the latter three. Ms. A. was promoted on the basis that she
was the most senior head of department but Mr. J. was promoted although
he was almost the most junior and lacked even five years experience,
thus virtually ignoring seniority. In the case of the other three,
they were from among the ten most senior heads of departments and
thus seniority was given more weight. For all these reasons, the
appointment of the third respondent (Wijewardene) as AG was flawed,"
the court held.
These are serious
issues raised by the Supreme Court and calls for rethinking on the
part of the Central Bank. There is also a debate in the bank and
often outside about whether appointments should be made on seniority
and experience or on merit.
are valid. The state sector, in particular, is burdened with senior
officers who have many years of experience but happen to be inefficient.
The promotion-on-merit argument is valid in such a case if the public
sector is to be made efficient.
on merit could lead to discrimination. What if a boss overlooks
a senior employee just because he doesn't like him or her and prefers
a junior worker and calls it a "merit-appointment"? According
to Central Bank sources, recent promotions have caused a lot of
heartburn with senior people being bypassed in favour of junior
officers as in the case that went before the Supreme Court.
One of the reasons
why Sri Lanka's productivity is low is because there is no place
for efficiency, particularly in the state sector. Officers remain
in positions for too long, get extensions and deprive more efficient
younger staffers a chance to reach the top. That leads to frustration
and discontent among junior officers who suffer in silence rather
than leave and forgo their pension rights.
argument is a valid one as long as politics doesn't come into the
picture and there is no favouritism in appointments.
operators disagree over pricing proposal
By Akhry Ameer
Fixed telephone and mobile phone operators are at loggerheads over
pricing in the proposal to introduce the Calling Party Pays (CPP)
concept. The fixed operators disagree with the pricing that has
been proposed by the mobile operators.
They claim that the termination charges requested by mobile operators
are relatively higher than the fixed operators. Fixed phone operators
have proposed the charge be made equal.
CPP means that
when someone makes a call (the caller), the receiver would not have
to pay any charges for receiving such a call. Instead, the charge
borne by the receiver would be passed on to the caller. This means
that all calls received on mobile phones would be free. With the
introduction of CPP, higher call charges are inevitable and the
increase is supposedly as much as three rupees or even higher.
The termination charge is a component that is charged by the calling
party's operator to hand over the call to the receiving party's
operator. This charge, though in reality charged by the calling
party's operator, is passed on to the receiving party's operator.
All operators view the termination cost as the component that is
used to recover their capital investment.
When a call
originates from a fixed phone to a mobile phone, the termination
charge is higher, as the mobile operators have requested a charge
varying from Rs. 3.00 to Rs. 7.40 depending on the time the call
is made. Alternatively, when the call originates from a mobile phone
and terminates at a fixed phone, the fixed operators have requested
a charge in the region of Rs. 1.60 to Rs. 3.80.
operators contend that this needs to be made equal both ways, i.e.
Rs. 1.60 to Rs. 3.80. If this is not done, the fixed operators say
that their customers would have to bear an unrealistic price increase,
which on average would be around Rs. 3.00 to Rs. 4.00.
Technical Director, Suntel Ltd. speaking on behalf of fixed operators,
said: "Investment for fixed operators is higher, almost $1,000
per line, while for the mobile operators it is only $250 - $300
per line." Fixed phone operators couldn't burden their customers
with heavy tariffs as they have to pay more money to obtain a connection.
also alleged that the TRC is trying to implement the CPP system
without following the findings made by the TRC appointed committee
that conducted public hearings for all stakeholders including the
consumer. The Committee recommended the re-balancing of local and
international tariffs to be implemented in two slabs and the adoption
of a national numbering plan prior to the introduction of CPP.
Under the numbering
plan, mobile and fixed operators are identified using different
sets of prefix codes. Currently, two of the fixed operators, Suntel
and Lanka Bell have 074 and 075 respectively as prefixes that are
similar to mobile operators.
This is to make consumers aware that they would have to incur higher
call charges when making calls to a different type of operator.
Dr. Hans Wijayasuriya,
Chief Executive/Director, MTN Networks (Pvt), while reiterating
that CPP is a cost-based pricing formula, said: "It is not
about fairness. We have followed a structured approach in developing
the pricing. We too have compensated on pricing, like the fixed
operators. If both sides compensate, the industry grows."
of mobile operators, unlike fixed operators, needs to be duplicated
to provide mobility. "For example, the mobile traffic in Colombo
is not the same in the night. Similarly the traffic increases in
adjoining areas like Battaramulla in the night indicating that the
users in Colombo have moved to their homes by this time. Therefore,
we need to have similar infrastructure in both places."
said they had identified three distinct communities, the corporate,
the residential user who has both a fixed and mobile line and those
who only have access to either a fixed or mobile line. In the case
of fixed phone consumers who have access to both lines, the CPP
actually means a shift of part of the charges from one to the other.
"Our study went to the extent of providing lower termination
charges to the residential user than the business user. We are very
confident that CPP is not going to be a great hindrance. This only
throws an open challenge to the fixed operators to expand their
networks as the mobile operators have done," he said. Had the
CPP been implemented earlier this problem would not have occurred,
TRC Director General, acknowledged that both parties had submitted
their cost proposals and that the cost per minute remains the crux
of the matter.
The pricing will not be accepted as presented by the operators,
he said. The TRC's position is that it should be cost-based with
reasonable profits to the operators, he said.