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The Government has indicated its firm resolve to ensure that two important state owned organizations will be run efficiently without recourse to subsidies from the Treasury.
In its letter of intent (LOI) to the International Monetary Fund , Acting Minister of Finance, Ranjith Siyambalapitiya and Governor of the Central Bank, Ajith Nivard Cabraal have undertaken to ensure that the Ceylon Electricity Board (CEB) and the Ceylon Petroleum Corporation (CPC) break even by end 2011.
Measures have already been taken to achieve this objective. As regards the CEB, the tariff was increased by 35 per cent in March 2008 while the Sri Lanka Electricity Act was made law in March 2009, establishing an independent regulator. This should result in management improvements in this sector.
As regards the CPC, all increases in international oil prices will be passed on to customers. Further, continuous assessments will be made of the operational cash flows of these enterprises and required adjustments will be made including management and operations.
In order to ensure that these two organizations are successful in becoming non dependent on Treasury subsidies, a high evel joint review mechanism with representatives from the Ministry of Finance, CEB, CVPC and the Central Bank of Sri Lanka will make appropriate recommendations on an ongoing basis, the LOI added.
