Annual Report 2008 - Ministry of Finance and Planning

3. Performance of Public Enterprises
157
projects. The Government grants for these projects for the
year 2008 are Upper Kotmale Hydropower project (JBIC) 4,000
million, Norochcholai Coal power plant Rs.8,500 million,
Morogolla Hydro power plant Rs.40 million, Rehabilitation
of old Lakshapana and Wimalasurendra Hydro power
palnt Rs.40 million, Kerawalapitiya Power Plant Rs.3,000
million, Construction LNG related Facilities Rs.600 million,
Rehabilitation of Ukuwela Power Plant Rs.100 million, Coal
Power plant Rs.5 million, Ginganga Hydro Power Project
Rs.5 million, Athuruwela Coal Fired Thermal Power plant
Rs.5 million.
The installed capacity of power generation of the CEB
registered a marginal increase in 2008.The gross electricity
generation grew at a relatively higher rate of 8.2 percent
during 2008, compared to the growth of 4.5 percent in 2007.
The increase in electricity sales (Gross Units) moderated by
1.7 percent in 2008, as the average price per unit increased
by 25 percent. Revenue of the CEB has improved by 27
percent in 2008 consequent to an increase in the unit price
as well as the increased sales.
A comprehensive tariff revision was undertaken in 2008
which resulted in the average tariff being increased by 23%
to Rs.13.1/unit in 2008 from Rs.10.6/unit in 2007. However
the CEB incurred on average cost of Rs.17.80 in generating
one unit of electricity in 2008. The difference between the
unit cost & the tariff despite a tariff revision is mainly due to
the government’s policy of subsidizing electricity consumed
by both the low income group of consumers and the religious
institutions in the country.
Since more than 50% of the total electricity generation is
through thermal power the steep increases in the crude oil
prices directly affected the financial performance of the CEB.
As such in 2008, CEB incurred a huge loss of Rs.34 billion
in 2008 in compared with the loss of Rs.14 billion incurred
in 2007.This loss would have exacerbated if the government
had not decreased the price of heavy fuel to a fixed price of
Rs.45/l in the last quarter of 2008.The CEB was also required
to adjust its Fuel Adjustment Charge whereby the industrial
sector in the country will be privy to the benefits that the
CEB will be accrued on the heavy fuel cost being cheaper.
The government subsequently as a budget proposal decided
to supply heavy fuel to CEB at Rs.25/l from January 2009.
The CEB ended the year 2008 owing the CPC Rs.45 billion
on the purchases of heavy fuel.
Outstanding loans to banks from the CEB has decreased to
Rs.6517 million in 2008 from Rs.7075 million in 2007. At the
same time the government has given a debit moratorium
at a cost of Rs. 7- 10 billion per annum to the CEB until the
commissioning of the Norochcholoi coal power plant which
is expected to replace high cost thermal power generation.
During 2008, Rs.14 billion was released to CEB through
budgetary allocations to meet investment expenditure.
As at the end of 2008 the total accumulated debt of CEB
stood at Rs.64 billion exclusively due to the government on
account of past borrowings, largely consequent to capital
expenditure project undertaken.
chart 3.16
Ministry of Finance and Planning Sri Lanka
Annual Report 2008