The Sunday TimesBusiness

14th April 1996




Watts the problem today

It has been pointed out many times before in this column that the indiscriminate use of terms like sustainable development, targets like NIC by 2000 and labels like Year of Productivity is useful neither to decision-makers nor to the general public. Most of these phrases are so little understood that most people are unable to assess their suitability or to monitor the country’s progress with respect to these buzzword. However, the Year of Productivity, the most popular and well used label of 1996 is an easy one to understand. It is all easy to see the irony of continuing to use this label in the face of a colossal productivity decrease resulting from the current power shortage.

Although politicians may use this label quite seriously in their daily rhetoric, it has become almost a joke to the majority of people whose work day for the past month has been reduced to approximately three and a half hours due to the imposition of power cuts. You wouldn't think that a reduction in working hours by 50% facilitates productivity would you? On the other hand, you would think that the Ministry of Industrial Development would check with the Ministry of Power, Energy and Irrigation or the Ceylon Electricity Board before it declared 1996 (the cursed year in which the Drought of the Century was supposed to occur) the Year of Productivity, wouldn't you?

Forgive us for being facetious, but the nonchalant way in which the crisis continues to be managed (in spite of its complexity and seriousness) does not warrant a serious response. Despite many years of warnings about the steady increase in demand for power and the threat that severe drought posed to the country's hydro power potential, the Ministry of Power and Energy and the CEB did little to explore and act on possible options for expanding the country's power generation capacity.

Instead of developing more viable alternatives to the proposed Upper Kotmale Hydro Power Project and other stalled projects the two institutions looked to the skies for "the rains to come" and refused to impose power cuts until the very last moment. Published interviews with senior officials from these two institutions also suggest that they chose to wait until the Wills World Cup was over to impose power cuts although they were aware that the water in the reservoirs was sufficient for less than two months of power (and that it was not rational to depend on "the rains to come" during the Drought of the Century).

Even this far into the crisis, after the date for total blackout has been set for April 28, the Minister and the CEB are still shying away from being absolutely firm with the public. Last Sunday the power cut was lifted for two reasons: Easter Sunday and presumably the Singer Trophy finals. Three weeks ago, the CEB announced that since people were adjusting to the power cuts and not saving the required amount of power, it would impose random power cuts. This would be unpleasant but probably the only way to prevent people from working around the cuts. However, the CEB never acted on this announcement. Instead it imposed the power cut a period of even lower usage for a week.

Instead of being firm with the public (however unpopular it might make them) the CEB is pointing fingers at the private sector and accusing the private sector for not conserving an adequate amount of energy. It is easy to make private enterprise the "bad guy" and stir up ill feeling about the use of air conditioners and such. The CEB should not forget that the private sector is in the business of producing goods, providing services, and making money. Private companies, to ensure their survival, have to try to keep their levels of productivity as high as possible within the constraint of the power cuts. It is their objective. It is their role in the national economy.

A serious analysis of the impact of the drought, the power shortage, and the large-scale switch to diesel-powered generators reveals a rather grim picture of huge food shortages, productivity losses to all sectors, huge additional expenditures on the import of generators and fuel (and the resulting impact on foreign exchange reserves), and increased environmental pollution due to diesel emissions. And this is just the tip of the iceberg.

Tension mounts in estates as strike nears

By Rajika Jayatilake

The crisis in the plantation sector is in danger of getting out of control, with the Ceylon Workers Congress (CWC) leader S. Thondaman taking an uncompromising stance in the issue of CWC demands from Plantation Management Companies.

Chairman Plantation Association of Ceylon M. J. C. Amarasuriya has already made it clear the Plantation Companies are unable to bear the colossal cost of Rs. 3000 million which they will be compelled to incur if they were to accede to the CWC demands. The CWC has asked for 300 days of work per year and a rise of Rs. 8/- in the daily wage.

"If the Plantation Companies can't give what the workers want, they should hand the estates back to the government and go home," Mr. Thondaman says. "They don't own the estates and nobody asked them to come."

The week-long strike the CWC is preparing for from April 22 - 27 is not a strike in the real sense of the word he says, but "a protest against the lock-out by management," Mr. Thondaman says. "The management is only giving workers 15 days work."

It seems clear Mr. Thondaman is not about to soften his stand as he decisively referred to the Plantation Companies as "seenibola traders who don't know anything about plantations."

"The CWC has been in this game for 25 years," he says.

As adamant as Mr. Thondaman is, facts are as stubborn. It is no secret that mismanagement of estates from the early 1970s to 1992, resulted in Sri Lanka's tea incurring the highest cost of production in the world. Agricultural productivity at the time was lowest in the world with yield at 1,200 kilos per hectare. After the Plantation Companies took over management, productivity has increased to over 2,400 kilos per hectare. Yet, Mr. Thondaman says, "The Plantation Companies don't know what productivity is."

During the years of state management, intake per plucker had been the lowest in the world at 13.5 kilos. With private management, intake per plucker has risen to 24.6 kilos.

Nevertheless, the 700,000 strong plantation workforce is not about to listen to reason. Tension mounts in the plantations as the sixteen umbrella organisations of the Joint Plantations Trade Union Centre (JPTUC) have decided to join forces with the CWC in the planned week-long strike.

Former Chairman of the Tea Board and outgoing Secretary General of the Planters Association, C. Sepala Ilangakoon said the industry's main worry right now is whether the strike which is imminent will deteriorate into violence.

"Mr. Thondaman may call a strike. But he can't control the workers from the safety of Colombo. My fear is where the workers get hungry they will turn on our Superintendent and Assistant Superintendent," he said.

Mr. Ilangakoon says if there is violence, there will be little else to do but turn to the police.

He does not anticipate any long-term adverse impact of the present crisis on the tea industry. "The tea industry is 148 years old and won't fall apart just because the workers decide to down their tools. But while they strike they will have no pay. We will have no profit. There will be no tea to sell and the nation will lose revenue.

Chairman Lipton Ceylon, Michael de Zoyza said the CWC demands are completely ill-timed and he echoed what the rest of the plantation industry say that "no plantation can afford this colossal expenditure right now," already burdened as they are with a very high cost of production."

Mr. de Zoyza said, "Plantations must be on a right footing first. There must be more productivity, more profitability."

Mr. M. J. C. Amarasuriya said, "CWC demands cannot be given immediately. That would spell disaster for the plantation industry."

He said that the issue of labour mobility had surfaced during discussions where the management companies spoke of employing more labour in the Southern Sabaragamuwa and some parts of the Uva Provinces where there is a shortage of labour.

However, as industry sources say, this is hardly possible in the short-term and will not appease the CWC.

Mr. Amarasuriya said the Plantation Management Companies have agreed to the price wage supplement suggested by the government in order to increase the take-home pay of workers. However, the Union apparently do not accept this as an alternative to the Rs. 8/- increase in wages.

Thus, there seems to be no resoluton in sight for the prevailing crisis in the plantations while the CWC especially is so dogmatic in its demands.

Industry sources say no agricultural undertaking anywhere in the world guarantees a specific number of days of work as agricultural activities are subject to the vagaries of climate and weather. "So how can Mr. Thondaman justify his demand for 300 days work? ask industry sources.

Industry sources say that it is not just a question of profit. Even if a loan is given by the Asian Development Bank, it is still a loan and not a grant, they say and the Plantation Companies need to build up enough capital reserves to service the loan.

What is more, "Private investors have no moral obligation to pay for the sins of the past," they say.

So while the Plantation Companies keep hoping that sanity will prevail with Mr. Thondaman, the CWC and other Wokers Unions, the national economy reeling under the disastrous impact of the power fiasco seems to be in for another leathering if the proposed strike goes through.


By Business Bug

Playing tea-tea

A strike led by T-man from the T-estates is looming and the man is adamant in his demands.

The think-tanks in the government are certainly a worried lot, thinking about what would happen to the economy if the strike drags on.

So, they have advised the high and mighty: the 300 days of work per year may be considered but definitely not the pay hike.

Sri Lankan tea, they argue, is already burdened with the highest cost of production in the world....

Drop in signals

Sixteeen more TV and radio stations may have applied for licence to begin broadcasts, but few will get the nod of approval, we hear.

Only this week, one existing network ran into trouble, trying to report about a curfew that did not exist.

Now, there will be a sharper scrutiny of those trying to manage these stations. Indeed now it is too many cooks spoiling the soup and not more the merrier....

Milky war

The government has ordered a reduction in the price of dairy foods produced by a state concern.

The decision has other competitors worried, what with their prices being a cut above those from the higher land.

At least one of the competitors is considering a price reduction, to put the milk food market on an even keel...

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