By Laksiri Fernando –

Dr. Laksiri Fernando

As the events unfolded in the month of May, culminating in mass protests and one day token strike on 21 May, the price hike in the electricity consumption charges undoubtedly has proved to be a rallying point of general masses against the Rajapaksa regime irrespective of the concessions announced at the May Day rally by President Mahinda Rajapaksa.

The concessions were meagre, only applicable to the vastly low electricity users while the general price hike remained around 60 per cent quite unprecedented in any country as a sudden single increase. Even the low electricity users might not be happy about the raise and then a small ‘concession’ as it would reveal a future threat of increase unless they join the protests against the overall price hike.

No Justification

No Minister could openly justify the sudden price increase except Dr Sarath Amunugama who seems to have completely gone ‘troppo’ according to the Australian idiom who even recently invented a ‘new class struggle theory’ saying that “there is an acute struggle by trade unionists and some others to grab most of the wealth amounting to billions of rupees earned through the hard labour of the ordinary people of the country” (Daily Mirror, 12 May 2013). What the good doctor/minister failed to answer was who actually embezzle the hard earned wealth of the ordinary people of the country: the family, the ministers or the politically rich?

All other Ministers, including the President, were passing the buck to various sources including the Public Utilities Commission (PUC) or the ‘engineers’ cartel’ in the Ceylon Electricity Board (CEB). The current Energy Minister even blamed the former Minister in her own Cabinet completely disregarding the so-called collective responsibility. The price hike was something approved by the Cabinet, the President presiding.

Everyone knows that the CEB is a mismanaged enterprise for decades. It is not a recent story. But the Mahinda Chinthana has failed to fix it; and for that the ordinary electricity consumers are not responsible. Amunugama also should know it. Sri Lanka is one of the countries with high electricity tariff especially compared to the earned income of a household or a person concerned. Although the average tariff is higher in a country like Australia, it is a reasonable fraction of the household income with many concessions given to low income earners.

What is abundantly clear behind the electricity price hike is a major failure of the government’s not only the pricing policy but also the energy policy. This government was not elected in recent times but first in 2005. It was in October 2006 that the Ministry of Power and Energy came up with a “National Energy Policy and Strategies” document but merely as a cosmetic exercise. Then it took one year to approve it by the Cabinet. A review was expected to conduct in three years’ time but never done so. What was the need of a review if a plan is not implemented or no intention to do so!

There are major holes emerging in the government’s development policy behind and leading to this energy crisis. To highlight only some: there is a major imbalance within the infrastructure policy paying much attention to roads and highways for some reason but completely neglecting a viable energy policy. The government is borrowing exorbitant amounts of funds from foreign sources while the government’s domestic revenue has dwindled to almost half during the last five years. While the government boasts about the GDP per capita income increase in monetary terms, the imbalance between the Western Province and the other provinces are scandalous. Ironically, the people in the Western Province are the most dissatisfied, perhaps due to the vast income differences in their midst.

Pricing Policy

On the question of electricity pricing policy in the so-called National Plan, in one section it assigns the sole responsibility to the Public Utilities Commission (PUC) and in another it states “Institutional responsibility to implement the electricity pricing policy lies with the Ministry of Power and Energy, PUCSL, electricity utilities and the General Treasury.” All responsibilities are utterly confused.

It is obvious that the tariff proposals naturally should come from the electricity distribution utilities and that means mainly the CEB and then it should go for the approval of the PUC which will seek concurrence of the Treasury on government subsidy. This is where the problem seems to have cropped up. It is common knowledge that the CEB’s annual loss is around or over 60 billion in recent times. This is something that the previous governments, right or wrong, have been subsidising through other incomes or sources, because the average selling price is lower than the cost of a kilowatt-hour of electricity. This time around, the ‘crooked economics’ of Sarath Amunugama and PB Jayasundera must have said no, the President as the Minister of Finance obviously nodding.

The ‘economics’ of Amunugama company, no need to say ‘crooked’ again,  is asking each and every government enterprise or even institution to be profitable these days. This appears to be the New Mahinda Chinthana without perhaps the knowledge of Mahinda Rajapaksa himself. This is a complete absurdity that goes against the aspirations of those who elected the present government believing that this is a ‘caring government,’ let alone rational economics. If they want profits, there are other sectors that they can earn them from within perhaps the same ministry. For example, oil refinery is one where if they utilize the full capacity of our refineries, the costs can be brought down and even foreign exchange might be earned by exporting refined oil. Instead, what we have seen in recent times is the complete standstill of the Sapugaskanda oil refinery due to poor planning in obtaining crude oil in time. Again, the blame goes to the international conspiracy.

There is another cardinal principle in their own ‘national energy policy’ that they have flouted in the case of the recent pricing policy and that is the following.

“Electricity generation prices at bulk purchase points will be as stated in the Power

Purchase Agreements, and the cost of transmission, distribution and supply will be

regulated ensuring fairness to both consumers and electricity utilities. Consumers

and all other stakeholders will be given opportunities to present their views at a

public hearing.”

Have they consulted the ‘consumers’ and other ‘stakeholders,’ particularly the trade unions on this matter of price hike? The answer is NOPE. On the other hand, if the “prices at bulk purchase will be as stated in the power purchase agreements” then how can they ensure “fairness to both consumers and electricity utilities”? It is well known that a particular mafia operates behind the ‘power purchase agreements’ that key government politicians either overlook or party to. If these agreements could be renegotiated and the supplies could be more competitive then there can be possibilities of bringing down the costs. If you ask the relevant trade unions and the concerned engineers they would definitely come up with the other cost cutting measures.

May Protests

It is in the above context that I have watched with considerable dismay the utterances of Earl Gunasekara, for example, and few others on behalf of the government claiming that the actions called by the Coordinating Committee of the Trade Union Alliance (CCTUA) on 21 May as an utter failure. Gunasekara obviously is a novice to the trade union field and it is amusing that the government had used a crossover MP from the opposition to do their dirty work. As an academic observer of trade union struggles in Sri Lanka and elsewhere for over 40 years, my judgement of the day was different.

Of course it was not an all-out general strike as in the case of 1960s or even 1970s. It didn’t mean to be such. Although it was called by a trade union alliance it was more of a mass protest led by trade unions since it was mainly a consumer issue. It should be the case even in the future in my opinion on the issue of electricity price hike. Even PB Abeykoon, Secretary to the Ministry of Public Administration, must be correct in saying that in some government institutions the attendance was higher than on a normal working day because the government had cancelled all leave and threatened to dismiss anybody participating in the work stoppage. The proverbial Sword of Damocles was hanging over their heads. Added to it were the memories of the July 1980 strike when the then UNP government took harsh measures in sacking over 80,000 government employees as a result of that strike. It is that kind of a situation that the trade unions should avoid by devising different strategies and tactics.

There were, however, brave ones in many places even in the public sector, and others participated in lunch time protests. Strike action by trade unions is a legitimate action according to the country’s constitution and legal set up. In the private sector it was a complete success, the young and the new working masses coming into swift action. Within the government sector, significant sections of the railways and printing corporation were on strike in addition to teachers in some districts and lecturers in selected universities. The selective action was part of the planned strategy of some unions and particularly of FUTA.

It was definitely for the first time after the present government came into power that the trade unions went into action in the present scale. The government failed to mobilize counter demonstrations or protests except in few remote localities as it did during the protest march of the opposition on 15 May in Colombo on the same issue. The government feared that the absence of their supporters from workplaces would be counted as strike action. It is natural that the government still has a stronghold on the public sector employees as they were mainly recruited through political patronage. But this power base is fast eroding.

Repressing trade union action has never been a major problem for a government of the UNP type in the past. But for a government of the SLFP type, with left wing alliances, similar action would definitely be suicidal.  Of course the Rajapaksa regime can rely on its newly acquired military might against the trade unions and its traditional popular base. Nevertheless it would be a dangerous game even for its own survival, and any repressive measures would erode it’s still remaining popular base even in the rural sector. Majority of the urban workers still have their social links in the rural Sri Lanka.

If the JVP or any other union does not engage in adventurist action and stick to the legitimate and democratic yet forceful mass action through joint opposition then it would not be difficult to win over demands or even oust the present regime at the next elections which is increasingly going against its electoral mandate. There are two things which are of paramount importance.

First is to conceptualize the pressing needs and demands of the people in the vocabulary of human rights which could attract wider sections of the populace. By doing so the people also can send the repressive government politicians quite insane. They are quite allergic to human rights. Electricity undoubtedly is a basic human need and the general masses have a right to obtain electricity at a reasonable price.

Second is to move away from pure shop floor trade union struggles to involve the unorganized sections of the populace and also as a tactic to avoid direct repressive measures of the government such as dismissals and/or other victimizations. The broad actions called by the CCTUA on 21 May in this respect were quite commendable. The government may rejoice that it was not a total work stoppage. But its power base is increasingly eroding underneath.