Finger-pointing: Who’s Faultis it that Sri Lanka (Almost)Ran Out of Electricity?COLOMBO, Sri Lanka May, 1996

By Cynthia M. Caron

Where is the tolerance, patience and understanding? Consumers are calling theCeylon Electricity Board (CEB) outright incompetent. They are challenging thenewly-appointed chairperson’s character. The country wants its thirst for electronicentertainment and kitchen appliances quenched. As one Colombo resident wrote,"Today our people, many of whom have worked abroad and tasted prosperity, de-mand a better lifestyle with a few electrical labor-saving devices thrown in. But withthe present shortages and power cuts will we ever taste the good life over here?"

During a televised speech in April President Chandrika Kumaratunge told the na-tion that the current drought has nothing to do with the power crisis. Today’s crisis,she said, is due to mismanagement by the past regime. Not many seem to buy thisexplanation. The average electricity consumer thinks that the government and theopposition party are much more interested in looking into past assassinations (likethe assassination of the President’s husband) and disappearances (under interna-tional pressure for human rights abuses) than they are in a contemporary crisis.Even if Kumaratunge’s People’s Alliance government has been negligent in moni-toring and developing the power-generation sector, over her past 18 months inpower Kumaratunge has improved Sri Lanka’s reputation and human rights recordfundamental for attracting foreign investment and bringing the things or the goodlife. Why can’t the voters understand?

Fourteen years after Thomas Edison started the world’s first electric-power com-pany in New York Rs. 80,000 was allocated by the Ceylon Legislative Council forthe electrification of the Queen’s House and the General Post Office in the ColomboFort. The year was 1894. Over the past century the Colombo Electric Tramways andLighting Company (later the Ceylon Electricity Board) has had the responsibility ofsupplying reliable power for national comfort and development. From the firsthydro-plant installation in 1912, to the 1988 Thermal Options Study, power-sectorplanners have had to juggle government priorities, respond to global market pricesfor fossil fuel and react to schizophrenic political decision-making. All this, to runlap-tops, reading lamps and power the televisions of suburbia.

While there is not one cause for the power shortage of 1996, there is one group tak-ing most of the blame: the planners of the Ceylon Electricity Board (CEB). Eventhough I subconsciously grumbled about them, did feel sympathetic. My sympa-thy grew once got deeper and deeper into power-sector planning. I am not sur-prised that there are multiple actors, agencies and agendas in power-sectorplanning; these exist in nature-conservation planning and management as well.What took me by surprise was the amount of financial investment in power sectordevelopment and the planning horizon for capacity and energy-systems generation.

Imperfect information and changing political-economic scenarios fifteen years agopartially account for today’s predicament. Power-sector planners are truly the people

who cannot satisfy all of the people all of the time,even when all the nation’s lights are lit. If the rulingparty is happy, then the opposition party is not. If theChamber of Commerce is pleased, then the Central En-vironmental Authority is irritated. As for the environ-mentalists, do not think they are ever happy evenwhen they get their own way.

The CEB has its own scapegoats for the power short-age: the political appointees at the Ministry of Irriga-tion, Power and Energy and the environmentalmovement. Both groups, according to CEB officials, donot understand power generation and object to CEBproposals for completely opposite reasons. The gen-eral public does not escape ridicule. The CEB blamesus for power-cut extensions and the need to imple-ment unannounced power cuts.

The electricity consumers of Ceylon all thought thepower crisis started on March 22; when the CEB and thegovernment scheduled three four-hour, rotating powercuts throughout the island. On this first day electricityconsumption fell by 2.5 million units. It was believedthat a savings of 2.5 million units a day, coupled withintermonsoonal rainfall in the hydro-power catchmentareas would support the country’s electricity needs un-til the southwest monsoon arrived in late May.

However, on the second and third days, the savingsreached only one million units because consumersworked their schedules around power cuts. One mil-lion units conserved was unsatisfactory. The CEB in-troduced unannounced power cuts lasting 30 to 45minutes in the early evening. One week later the CEBsponsored newspaper advertisements declaring,"Power- it’s in your hands now" and scheduledpower cuts extensions to five hours with a scoldingfrom the CEB, chairperson Dr. Lesile Herath: "Consu-mers have to choose between the lesser of two evils-reduce production, or face a total blackout." Commonresponses were, "How dare the CEB blame the peoplefor its shortcomings and lack of foresight!" And, "TheCEB has failed to provide for this steady growth. Itsimpractical planners urge the people only to conservepower to switch off the couple of lights each house-hold burns at night."

According to CEB Vice President Neil Perera, the to-tal daily demand for electricity is 14 million units.Thermal power (Power generation fueled by dieseloil, gas or coal) generates about 3.5 million units.Hydro-power resources supply the remainder. In or-der to put an end to power cuts, the catchment areaswould have to receive inflow of 10 million units dailyover the course of three weeks, an occurrence unlikelyto happen in April. Dr. C.R. Panabokke, an expert onrainfall, says that Sri Lanka does not have a surplus ofwater, as most people believe. "There was a water sur-plus before 1948 and large-scale industrial growth," hesays, period. Overnight rainfall in the catchment areasis front-page news. Every millimeter is recorded andpublished. It is a great disappointment to all of us in

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Colombo when downpours flood the streets, causingroadside sewers to overflow and cars to stall whileno rain falls in the catchment areas.

Did the CEB know before, much before, March 22that the country was facing a severe power shortagefor April and May? Rain patterns for the third quarterof ’95 gave every indication that there would be a se-vere drought, which, among other things, would leadto power shortages. Yet the CEB claims to have be-came aware of the problem only in mid-January. Engi-neers told CEB officials about the impending crisis, butthe engineers’ union refused to talk to the manage-ment because of an internal political matter. The fol-lowing month the Ministry of Power refused toimplement a CEB special-task-force recommendationpackage that included repairing existing power plants,the purchase of generators to reduce pressure on thenational grid and procurement of new machinery. TheCEB recommended slowly phased-in power cuts inearly March, but the Ministry did not take their advice.Planners blame the Ministry for not taking measuresto avert the crisis. The Ministry has been extraordinar-ily silent.

In late April, the CEB appointed a ten-member"ThinkTank" to prepare background reports for the Ex-ecutive Team, the CEB’s most senior officials. ThinkTank members have specializations in civil, electricaland mechanical engineering, and finance. Dr. Herath,CEB chairman, thinks that through this new process theCEB will be able to react better to new developments. Inhis opinion the Board spends too much time on day-to-day operations and cannot pay attention to aspects ofindustry development. "The Think Tank will naturallydiscuss their thinking and ideas with their fellow pro-fessionals," he says. According to newspaper reportsthis should create a more participatory atmosphere forprofessionals who will be asked to consult with the CEBin the future. (Daily News 26/4/96).

Quite often the inauguration of a power plant goesunnoticed. Not this year. The opening of the Dick OyaHydro-power project was celebrated even though itcontributes only 1.2 megawatts to the national grid."Electricity is a basic need of the people today. Provid-ing electricity to all those in the dark is a prime duty ofthe People’s Alliance Government," the Deputy Minis-ter of Cooperatives stated as he inaugurated an elec-tricity scheme for 150 rural households on March 29.The following month a rural electrification project in

Kurunegala was commissioned on the same day thatPrime Minister Sirimavo Bandaranaike celebrated her80th birthday. Will the electorate remember to thankthe present government for securing the project’s Rs.4.5 million loan from the Asian Development Bank inthe next election? Since power is a political tool, thesavvy politician seeking re-election will pick a party-significant date just to make sure.

In the final quarter of 1995 the CEB embarked on an

expensive propaganda campaign: "Watt’s in it for

you?" It sought public cooperation to reduce powerconsumption. Consumers would receive a rebate onunits saved in October, November and December."For every unit that you have saved you will be givena cash credit on your bill to the value of the unitssaved" the CEB chairman promised on national televi-sion. When the CEB did not make good on its promise(it granted a 10% rebate, irrespective of the number ofunits saved) consumers flinched.

Would this mismanagement have happened if thepower and energy industry in Sri Lanka were priva-tized? Industrialists say that in a private-sector organi-zation there is accountability along the way at everylevel of decision making. When the government runsthe show no one is responsible for anything. The CEBblames its own engineers. "It seems to be well-knownin business circles that the Engineers Union of the’CEBhad recommended power cuts somewhere in Novem-ber last year," says one reporter. No top-level actionfollowed. For this, politicians and senior directors ofCEB are to blame.

The Overseas Development Administration of theUnited Kingdom (ODA) granted Rs. 152 million (1.95million pounds) to the Mahaweli Authority to imple-ment technical cooperation projects, "EnvironmentalManagement and Sustained Development in theUpper Mahaweli Catchment," funds to improve land-use planning and environmental monitoring of up-country activities such as assessments of reservoir sed-imentation and river flow and a receiving station tocollect Advanced Very High Resolution Radiometryfor daily monitoring of soil moisture, forest- fire andcloud cover. All sedimentation reports conflict. Manysay that fifty percent of the reservoirs are full of silt.Foreign engineers and irrigation experts estimate thatwe could have had another 45 days of uninterruptedpower supply if the CEB water reservoirs had beendredged and filled prior to the drought. Drain pipesare blocked. Cleaning operations such as dredging andmud removal have never been done.

To reduce pressure on the national grid the CEBgranted a number of concessions to private industry toproduce its own power. These incentives includeduty-free concessions for generator purchases and arebate of Rs. 5.80 (US$0.11) per unit for power gener-ated through generator sets of 50 KVA or more.1Board- of Investment-approved enterprises are paidRs. 3 million if they install one-megawatt generatingcapacity to relieve pressure on the national grid. TheChairnan of BOI expects that industrialists will install80 megawatts of power under this scheme. Participat-

ing industries are expected to disconnect themselvesfrom the national grid. Many in the business commu-nity feel that instead of offering concessions the CEBshould have turned to the private sector for generatorcapacity.

Globally, the utility industry is plagued by risingcosts, angry consumers and environmental problems.The power industry is facing a period of restructuringto become decentralized, service-oriented and market-driven and, with the right policies and commitment,perhaps even a bit more environmentally friendly. Na-tional utilities in the United Kingdom and France arerestructuring. Sri Lankan officials are looking to theUK as an example. The Ceylon Electricity Board is notalone among developing-country utilities facingpower sector problems. According to a 1993 WorldBank report, "opaque command and control manage-ment of the sector, poorly defined objectives, govern-ment interference in daily affairs and a lack of financialautonomy have affected productive efficiency and in-stitutional performance" (Flavin and Lenssen, 1994)Political manipulation and corruption make theseproblems even worse. Despite the finger-pointing, allinterest groups agree on one thing: a decision must bemade and followed through. Politicians stay out. Letthe professionals do their job.

Forecasting: electricity and peak demand

Dr. Mohan Munasinghe was special advisor to SriLankan President J.R. Jayawardene in the 1980’s and isa member of the Intergovernmental Panel on ClimateChange. He is on sabbatical this year from the WorldBank and teaching at the University of Colombo. Overthe drone of the generator powering the office fan hetold me, "The rain is not to blame for our currentpower crisis. These power cuts are not nearly as bad asthe ones we had in 1982- power was cut for half aday. By 1985 our situation had improved but only be-cause new plants such as the one at Victoria had be-come operational. We need correct planning andpolicy analysis in energy demand."

Planners use gross domestic product (GDP) toproject electricity demand. The current elasticity ofdemand for electricity is 1.5.2 This means that forevery 1% increase in GDP there will be a corre-sponding increase in electricity demand of 1.5%. "In1994 the GDP grew at a rate of 5.5%, therefore wecalculate an increase in GDP growth by 0.5% annu-ally- 6.5% in 1995, 7% in 1997 and so on. From theprojected GDP we forecast electricity demand," saysMr. Gnanalingam, a CEB project director.3

1. Diesel fuel is already heavily subsidized by the state for the energy, agriculture and transport sectors.

2. In developed countries such as Japan the ratio of electrical energy demand growth rate to gross domestic product (GDP)is closer to 1:1 due to energy-efficient techniques.3. The gestation period for a coal-powered plant is 5-6 years. For a hydro-power project 7-8 years; 2-3 years for the initialsurveying and planning and 4-5 years for construction. The construction time for gas and diesel plants is two years. Genera-tion stations have a long life span: 15-20 for small thermal (gas and diesel), 20-30 years for coal and 40-50 years for hydro-power.

Institute of Current World Affairs 3

Figure 1" General Procedure in Energy Planning

DEMOGRAPHICMOOEL,:S/SCENARIOS

MACROECONOMICMODELS/SCENARIOS

ECONOMICO(VELOPMEHT:S

--eOP---PHYS. OUTPUT

SUBSTITUTIONANAI..Y$15

TECHNOLOGICALTRENDS

NERGY OEMANO REF. UNITS

OOMESTIC RELIOIOU P.INOUSTRY BTR(ET LIQHT

OkeaERC(

AVAILABILITYPRICE OF THERESOURC($

SPECIFIC ENEROY CONSUMP,DOMESTIC

IHOUSTRY

FINAL ENERGY DEMAND

TECHNOLOGICALTRENDS

(NEROY SUPPLY SYSTEM

He continued explaining demand forecasting to me."The variables for electricity-demand analysis are allbased on well-educated guesses: the growth of GDPover the next 25 years, population growth rates, growthof the manufacturing sector and value-added, the pro-jected growth in the household sector and finally theappliances used in the household (Figure 1). We decideon a planning horizon, normally beyond ten years to ac-count for a new project’s gestation period, differentiateprediction from projection, and choose from differentforecasting techniques. Based on a certain set of as-sumptions a prediction is a specific estimate made forsome future time period. A projection makes many esti-mates of the bature based upon various sets of assump-tions. For instance, ’Given alternate sets of businessdevelopments how much power will be required undereach set of conditions?’ The on-going ethnic conflictcreates an enormous amount of uncertainty for plan-ning. How much will the demand for power increase ifthere is peace? All our techniques have run a high, me-dium and low-use scenario."

Since 1992 there has been talk about power cuts in

4 CMC-22

1995 and 1996. Gnanalingam believes that there willpower cuts next year and the year after but the extentof the cuts will be heavily dependent on rainfall. "Weknow to expect rain shortfalls once every four years.We factor this into our forecasting model. Electricity isa versatile form of energy. If we achieve newly indus-trialized country (NIC) status with a gross nationalproduct of $2,000 per capita, what will the demand forelectricity be?" he asks rhetorically. "In the early 1980’sour energy demand was so low we had to promoteelectricity consumption by lowering the tariff. It waspopularly believed that the country would have a

power surplus after the construction of the MahaweliSystem. We had discussions about exporting power tosouthern India."

The CEB prepares an annual forecast and financialand market plans. Under the old forecast the CEB ex-

pected to electrify 80% of the nation’s households bythe year 2000. Today in Colombo 60% of the house-holds are electrified. "In developing countries there is

always this debate over rural to urban migration. Thisis a myth in the Sri Lankan context. In 1990 82.4% of

households were rural. We expect that to decrease toonly 82% by 2020. Rural users tend to consume lessthan urban residents. If NIC status is achieved thenconsumers will have more money to spend on labo-saving devices. It could be decades before everyhousehold acquires every gadget it wants." (Figure 2).

Figure 2: Percent of rural and urbanhousehold owning popular electricalappliances in 2020

Appliance % Rural HH % Urban HH

Television 80 100Radio 95 100Iron 85 95Fans 50 85Refrigerator 40 75Hot water heater 0 75

"Power generation in 1994 was 4,365 gigawatts(GWh),4 an increase of 9.7% over 1993 generationrates. In 1975 electricity sales totalled 965 GWh. Be-tween 1975 and 1994 domestic consumption has risenfrom 86.65 GWh (9% of total electricity consumption)to 909 GWh (25.5%). Today at peak demand we needthe capacity to supply 980 megawatts (Mw) of powerand with the drought we have not been able to achieveclose to that. Therefore the power cuts," saidGnanalingam.

"According to our demand forecast the peak de-mand will increase to 1,481 Mw in 2000, 3,365 Mw in2010 and 5,177 Mw in 2015.5 To meet this demand wewill need more stations, but we must also reduce sys-tem losses. This year 17.9% of the power produced waslost in the system [in transmission and distribution]before it reached the consumer. We hope to reduce sys-tem losses to 12% by the year 2004. There have been nonew power additions to the national grid in the pastfive years. Projects on line for 2002 include a coal-power plant in Trincomalee and the Kukule hydroproject. The refurbishing of the diesel plants shall becomplete by 1997. In 2020 we expect 89.54 million gigajoules (Gj) of energy to be supplied by diesel comparedto 23.85 million Gj in 1990."6

Power systems and energy planning

The primary reason for long-term power planningat the national level according to Mr. Nanthakumarthe chief engineer for the generation planning branch

of the CEB, is that "the long lead time and the long pe-riod of utilization of electric power facilities make itnecessary to select projects to be studied some six to 12years before commissioning and to evaluate at leastsome 15 to 20 years of project operation. Hence, plan-ning studies must look ahead some 20 to 30 years."

With environmental-concern key words being acidrain, carbon dioxide and greenhouse effect, Nanthak-umar believes that we may be forced in the future todiscard options for the supply of power that aretechno-economically attractive but environmentallyunacceptable. "Local national and international envi-ronmental problems are starting to influence the de-velopment of the power sector. Planning for the longterm allows for the evaluation of the effects of the in-troduction of such restriction policies, assessing howrapid environmental improvements can be achievedand at what cost," he says.

Generation-systems planners follow a least-costplanning methodology and use an analytical toolcalled WASP III: the Wein Automatic Systems Plan-ning Package. This software package finds the eco-nomically optimal generation expansion policy for anelectric-generating system within user-specified con-straints. However, environmental constraints are notincluded in the model because environmental damageis often difficult to quantify, especially effects of partic-ulate matter emitted from thermal plants on humanhealth and the loss of biodiversity inundated byhydro-power projects. The WASP III package consid-ers 12 types of thermal- and hydro-plants and basesoptimization on discounted costs for total systemexpansion. The optimization exercise is fruitless if en-vironmental externalities, many of which can be quan-tified, are not included in the model. Least-cost modelsthat do not include environmental studies risk becom-ing "more-cost" projects as citizen and environmentalgroups launch attacks that compound the interest onloans because of construction delays.

With the 1996 crisis, capacity expansion is inevita-ble. The planning process must now answer the ques-tion: What are the relative environmental costs andbenefits of alternative generation mixes at alternativepower plant locations? "We know it is imperative toincorporate environmental goals at the investment-

planning phase. Many externalities are difficult toquantify or have not been studied in many developingcountries. For instance, there are health affects asso-ciated with byproducts of fossil-fuel combustion (par-ticulate matter and sulfur dioxide), if Sri Lankacontinues with a fossil-fuel dominated generation sys-

4. One gigawatt is 1000 megawatts.

5. Peak electricity demand in Sri Lanka starts between 7:00 and 7:30 p.m. Everyone turns on their lights, the evening TVnews and starts to prepare dinner. The capacity of every generating system plan aims to meet this peak demand. Peak useof lighting at this time has an unusually high impact on system demand and hence system expansion. Florescent lighting is

both an attractive economic and environmental demand-side management (DSM) measure.

6. The system loss factor in Korea is 6%.Institute of Current World Affairs 5

tem. Pollution-control technology might depend agreat deal on how much citizens or the state are will-ing to pay to avoid sickness. Such detailed informationis not available for analysis. From here we must go for-ward," Nanthakumar stated.

Planners can manipulate a long list of options to-ward sustainable energy-sector development: pricing,institutional efficiency, end-use efficiency, supply effi-ciency [including new technology], fuel switching andreducing losses in transmission and distribution(T&D), and demand-side management (DSM). TheCEB and the government must maintain a proper mixof energy sources and diversified ownership patterns,otherwise the threat of monopolistic situations andover-dependency on fuel sources may result. "Irre-spective of ownership the CEB is forced to supply elec-tricity at the least cost," says D.C. Wijeratna who is incharge of setting the electricity tariff. "The country hasyet to develop a methodology for [establishing] pur-chase price that is acceptable to all parties. The pur-chasing power agreement is the most difficult tonegotiate."

Pricing

"Pricing policies that send the right message to theconsumer are just as important as choosing the correctmix of base-load thermals and pollution-abatementtechnology," claims Wijeratna. "The rural consumer ismy biggest burden. Rural electrification is not econom-ically viable. There are no recovery costs in rural areasbecause there is no economy of scale. Electricity pricesmust go up, but that is neither socially nor politicallyacceptable, Increasing prices in rural areas has seriouspolitical implications for the ruling party. The CEB isnot free to do tariff increases. The Minister of Powerand Energy, a political appointee, decides whether ornot the price increases and we recover our costs. In1994 the tariff increased to Rs. 1.20 (U.S.$0.02). Previ-ous to 1994 the domestic consumer was paying 60cents for the first 10 units of electricity when the actu-ally cost was Rs. 8. There was no justification for keep-ing the price at 60 cents. The Asian Development Bankwants us to restructure prices for industry. I have noeconomic argument for industry on why their pricesare so high. Price should equal marginal cost. How-ever, in Sri Lanka price has to include social equity.When we experience capacity constraint during thepeak hours those who use that power should pay extrafor the capacity component. But the users are the do-mestic consumers: the voters. They have the lowestprice to pay." In other words, households are subsi-dized to keep the voters happy.

Energy is approximately five percent of the totalcost structure in industry. "If we raise electricity pricesfor industries they will pass that increase on to the con-

sumer. I was told that at a recent Chamber of Com-merce, meeting business leaders were complainingabout the high cost of electricity. If this is true and theyare having difficulty competing in the export market,then the government should give them other subsi-dies. At any rate, the price of electricity should beraised across the board," says Wijeratna. But the CEBalready runs at a loss. Additional power subsidies areonly going to make a very bad and complicated prob-lem worse.

The pricing system is often ill-designed to promoteconservation. The common technique of average-costpricing does not reflect the true cost of supplyingpower. Consumers save less and have less conserva-tion impact when they implement conservation prac-tices based on the average cost. If the tariff reflectedthe true cost of supplying power, then the consumerwould be given the option of saving herself moremoney by conserving at high-rate times. This wouldalso reduce overall demand on the grid at the high-production-rate, high-energy-demand period knownas the peak-demand period.

Engineers and planners must insure that theirpower generation system has a high enough capacityto meet peak demand, even though the rest of the timemuch of a system’s capacity remains underutilized.Peak demand poses two specific problems to utilities.First, many generation units are fired up only to meetpeak demand, therefore running on a higher marginalcost than base-load plants.7 Plants built to meet peakdemand have lower construction costs but higher op-erating costs. Second, growth in peak demand oftennecessitates expensive capacity expansion. One eco-nomic tool to reduce growth of peak demand, which inturn delays capacity expansion, is peak-load pricing.Peak-load pricing imposes the higher marginal cost ofsupplying power during peak periods to the consumerthrough a tariff increase. If utilities can help consu-mers conserve power, especially during the peak pe-riod, the consumers’ rates will not increase. The utilitycan delay investment in expanding the generating sys-tem. Peak-load pricing works. A California studyfound that business and residential consumers savedup to an average of $1,000 per year by shifting sometheir power demand (use of appliances) to less expen-sive time periods. In Sri Lanka domestic consumersare not affected by peak-load pricing, they are subsi-dized. Industry is not (Figure 3).

Industry demand is measured in KVA. Factories de-manding less than 50 KVA per month have propor-tionally lower tariffs than factories demanding greaterthan 50 KVA. Within these two categories monthlyfixed charges range between Rs. 205.00 (U.S.$3.80) andRs. 435.00 (U.S.$8.05). Off-peak prices range betweenRs. 3.20 (U.S.$0.06) and Rs. 3.80 (U.S.$0.07) per unit.

7. Marginal cost refers to the increase in total cost resulting from raising the rate of production by one unit. Marginal cost is

sometimes referred to as incremental cost. Base-load plants are those fired up virtually all the time.

6 CMC-22

Figure 3: Ceylon Electricity Board TariffsEffective January 1,1996

Domestic (plus a monthly fixed charge of Rs. 15 (U.S.$0.27)First 30 units @ Rs. 1.20 per unit (U.S.$0.02/unit)31st to 90th unit @ Rs. 2.40 per unit (U.S.$0.04/unit)91st to 180th unit @ Rs. 4.50 per unit (U.S.$0.08/unit)Above 180 units @ Rs. 5.60 per unit (U.S.$0.10/unit)

Religious institutions pay Rs. 1.20 per unit for the first 90 unitsconsumed per month

CEB was paying industries to produce theirown power throughout the day to reducepressure on the grid. These industries pro-duce an excess of power. If CEB had a spe-cific policy for purchase agreements, CEBcould purchase power from these generators.Most industries practice peak-clipping be-cause private operation is cheaper than pay-ing the CEB tariff during peak hours. Otherways that industry can reduce their energyconsumption are to increase the power factorin their electrical load, install tinted windowsand insulation."

Peak prices range between Rs. 8.60 (U.S.$0.16) and Rs.9 (U.S.$0.17) per unit. Peak-load pricing is a demand-side management technique. Pricing is an effectivemeans to jolt the consumer into adopting conservationpractices, which often involves forcing a change inbehavior.

Demand-side management

Demand-side management (DSM) is based on thepremise that utilities and consumers are better off ifthey invest in ways to reduce power consumption. Itoften is the case that improving electricity efficiency isless costly than building and operating new plants. De-mand-side management, or negawatts, is an approachcompletely opposite to the one power companies areaccustomed to promoting; slashing prices of thosewho use more electricity. Since the early 1980’s, powercompanies have adopted the negawatt approach, elim-inating discounts for big power users and offeringcash rebates to individuals who purchase solar waterheaters or low-energy appliances. Demand-side man-agement challenges the assumption held by utilities:more electricity is always better than less, especially ifyou are in the business of selling it. However, utilitiesare not typical business enterprises. Government regu-lation balances the inherent counterintuitiveness ofDSM by rewarding utilities with high-return profit onpower saved. Many companies earn higher rates of re-turn on investments by conservation than in buildingnew plants. Sri Lanka intends to incorporate DSMprinciples pioneered in the U.S. into national powersector planning.

Mr. B.A. Gunaratne specializes in demand-sidemanagement. He is an engineer and managing direc-tor of Dimo Limited Power Management Department,an outfit that assists factories and high-tech industriesto cut costs through reducing their KVA. "The CEBmonitors electricity through two meters: one measur-ing energy in kilowatt hours, and one measuring de-mand in KVA, a measure of the powerhouse capacityto supply demand. The price is charged in 100 KVAunits. This is normally done by "peak clipping:" run-ning a private generator to supply one’s own powerneeds during peak hours when the CEB raises indus-try’s price per unit. Generator sizes range between 100KVA and 2000 KVA. During this last power crisis the

Maintaining the proper mix

Eighty-two percent of the total electricity system ca-pacity (1135 MW) is installed in 15 hydro-power sta-tions. In 1994 93.7% of the system energy demand wasmet by these stations. The Mahaweli Complex has sixpower stations with an installed capacity of 660 mega-watts. The Laxapana Complex in southwestern SriLanka has five hydro plants with an installed capacityof 335 megawatts. It is hard to judge whether or notMr. Nanthakumar thinks there is an overreliance onhydro-power regardless of the statistic. But in his ownwords, "What is the probability that there will be adrought in all the catchment areas all at the sametime?" The Mahaweli System receives rain in theMaha season; the northeastern monsoon falling fromOctober through February. The southern system re-ceives rainfall from April through August during theYala season. Water allocation is a primary concern.During the Yala season the Mahaweli ResettlementSystems A through H are totally dependent on diver-sions from the Mahaweli Project for agriculturalproduction.

"We conducted a hydro-thermal hypothetical oper-ation study to look at a seasonal-switching policy. En-tering past data into the present system, we try toanswer the question, "How much energy can you de-pend on?" Take the Mahaweli Kotmale Plant. Duringany month in a dry year, we can expect 25 gigawatts.In a wet year that reaches 80 gigawatts annually. Nowwe are receiving 22.5 gigawatts a month. In addition toseasonal and annual variations in power generation,flexibility in water management is also an issue. In theMahaweli System water is diverted for agriculture.When the water reaches the Polgolla diversion, wemake the decisions on how much water needs to orcan be diverted to the Mahaweli System H. The bal-ance of the water from Polgolla is sent to VictoriaDamfor power generation. As the water flows through thesystem at each dam a diversion decision to one of theeight Mahaweli Systems is made. Because of the diver-sions there is no flexibility in water management. Wecannot divert water from growing food to generatingpower," the CEB systems engineer declared.

How much is rainfall responsible for the powershortage? Using the standard 10% annual increase in

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demand, forecast estimates show that even under verywet hydrological conditions there will be a worse elec-tricity shortfall in 1997 than in 1996. The 1997 deficitsas well will be treated as those in 1996 with demand-side management and power cuts. The outlook for1998 is slightly better. There will be deficits only undervery dry and dry hydrological conditions, assumingthat the planned additions of a 90 Mw diesel plant and140 Mw of gas turbines are commissioned. To avert acrisis in 1998 the CEB needs to implement its T&D lossreduction program and expediteDSM techniques suchas energy-efficient lighting. Beyond 1998 the Ministrymust commission engineering studies to expand gen-eration capacity. Due to lengthy gestation periods andfeasibility studies, decisions about siting and con-structing coal-fired plants must be made within thenext year.

Coal gas, diesel and oil-fired power plants fall intothe category of thermal generation. The total installedthermal capacity is 250 MW or 17% of total power-system capacity. None of the thermal-powered plantsoperate at their expected full capacity and few opera-tional years remain. The Kelanitissa Oil Steam plantthat delivers 44 megawatts is to be retired at the end of2000. The Sapugaskanda Diesel plant that supplies 72Mw will be rehabilitated in 1996/97 and retired in twophases: 2003 and 2007. Fossil-fuel thermal options tocounter plant closings and increasing demand includecoal, medium-speed diesel, low-speed diesel gas andcombined-cycle.

Thermal option studies commissioned by the CEBmet with antagonism from both environmentalists andpoliticians alike. The CEB chose four location along thewest coast to site a coal-powered plant. Thermal op-tions have different environmental consequences fromthose of hydro-power projects. All of the sites were un-suitable to someone. The only site that the politiciansvehemently opposed was one too close to prawnfarms. "It is too bad we could not get to the environ-mentalists to help us on that one. The plant’s coolingwater [which is hot] would probably do less damageenvironmentally than the expansion of prawn farm-ing," a CEB engineer half-jokingly told me. "The truthis, the longer we wait to build these plants the moretrouble and unforeseen costs will accrue."

Coal-fired generation was selected as Sri Lanka’sfuture base-load generation option in the late 1970’s af-ter the second global oil-price increase. In the early1980’s the government approached the Australian gov-ernment for assistance. Trincomalee was chosen as anappropriate site. Its naturally deep harbor would al-low the import of coal in 150,000-ton vessels, therebysaving freight costs. The Asian Development Bankfunded a full feasibility study for four locations in thearea in 1984. The National Aquatic Resources Agency(NARA) and the Coast Conservation Department re-jected all the proposals in their presented form. By late1987 the CEB had little interest in expanding coal-firedpower generation since oil prices had dropped dra-

8 CMC-22

matically enough to make oil a cheaper fuel source.Furthermore, electricity demand plummeted from anannual 10% increase to a mere 3% per annum after the1983 and 1989 Tamil insurgencies. Shifting and uncer-tain boundaries of territory controlled by the Libera-tion Tigers of Tamil Eelam (L.T.T.E.) made the areaaround Trincomalee too unsafe for electric powertransmission to the nearest central grid. The date thatthe coal-fired plant was expected to go on line waspushed back past 2000. Today we have a power crisis.

Restructuring shifts the traditional model of large-scale, central generation to a "distributed" power sys-tem that relies on a broad mix of large and small gener-ating plants. Intermittent generators (hydro or solar),combined with "peaking" turbines used to supple-ment base-load plants for periodic increase in demandcan supply up to 30% of a typical utility’s demand forless than the cost of new centralized generating andtransmission equipment. Distributed power systemsmay be an important strategy for developing countrieswith unreliable and incomplete central grids to follow.Diversified electricity-generating sources that focus onproviding services (truly reflecting "least cost"), andnot on achieving lowest electricity prices may emergein the future that introduce long-term benefits of lessexpensive and more-reliable electricity, more efficientuse of energy and a reduction in environmentalproblems.

No one knows the limitations of government in-volvement in and the shortsightedness of power-sector planning better than Mr. D.C. Wijeratna, whohas worked for the CEB planning section for over 25years. "The lack of a regulatory framework to governthe bid-evaluation process, lack of trained manpowerin the preparation of power-purchase agreements andimplementation agreements, policy constraints, a non-competitive market and lack of transparency havecaused public concern and anxiety in the investmentcommunity." The result: proposals become implemen-tation without proper feasibility studies and run intounforeseen barriers. Submitted proposals contain noprovision for the average amount of normal commer-cial risk. Lengthy negotiations and delayed acquisi-tions add unnecessary construction costs thatultimately cause the investor to question governmentcommitment. "Decision-makers who are politicians donot understand the gravity of these matters nor thecomplexity of project financing. The need for [an envi-ronmental] regulatory body to oversee procedures in-creases costs, as has been the case in the United States.But the Sri Lankan government must do something toboost investor and public confidence," says Wijeratna.

According to Mr. Wijeratna one of the major prob-lems confronting planners is that they are not the deci-sion makers. Electricity systems planners analyzesocial political and financial criteria and present op-tions that combine the best combinations among thedifferent technologies at hand to the decision makers."The point is," Wijeratna states, "if decision-makers do

not make a decision then there is no planning, onlyanalysis. Unfortunately these decision-makers arepoliticians. Their priority is to be re-elected, so theyrarely exercise the political will necessary to generateand expand power generation capacity. There are re-source constraints in systems planning: technologyperformance, finances, and fuel availability and cost.In Sri Lanka we also lack trained professional humanbeings in government service."

""The biggest problem with power generation inthis country is no additions to the grid for the past fiveyears and an environmental authority that is too strict.The situation will improve only if there is less indeci-siveness in the Ministry, lower restrictions on envi-ronmental impact and if CEB proposals areimplemented," says Gunaratne, a consulting engineerin power management. "I do not think that the CEBshould be privatized, but it should be made separatefrom the Ministry. The Minister and politicians in gen-eral are indecisive, so they prolong decision-making.Instead of privatizing we should be given moderntechnology and loans. For those who say privatizationis inevitable, distribution should come first and thenonly through local entrepreneurs. Perhaps even pri-vate generation could be allowed in the future, but forthat there must be a clear policy."

What are the implications of six percent growth?"We need a U.S.$1.9 billion-dollar investment over thenext ten years to meet the growing electricity de-mand," says Mr. Nanthakumar. "Now the punditsstart theorizing about how we are going to come upwith all of this money to fund power generation."

Increasing private sector participation

Creating a business-friendly environment for pri-vate-sector participation requires: political stability,political consensus, a legal framework a regulatoryframework, and sector organization. Sri Lanka is notalone in the privatization experiment. The Philippineshas been most successful with private-sector partici-pation. But they also have the highest tariff rate inAsia. Turkey gave up its privatization program after15 years. It took six years for Pakistan’s to get up andrunning. Does Sri Lanka provide a competitive mar-ket environment for private power generation?

According to Mr. Thilan Wijesinghe, Chairman ofthe Board of Investment (BOI), private sector invest-ments have three advantages:

The private sector offers more timely and efficientservice, and in many cases, greater capability tomanage.

The private sector can tap new financial, technical

and managerial resources, provide training andtechnology transfer.

Private Sector investments have a beneficial im-pact on the balance of payments.

Bandula Tilakasena is Deputy General Manager forprivate power projects at the Ceylon Electricity Board.He cites changes in conventional infrastructure devel-opment financing in power-sector development fornecessitating private-sector participation. In the past,developing countries could count on loans with veryconcessionary terms from international, bilateral andmulti-lateral agencies. With investment opportunitiesopening up in other sectors, these traditional sourcesare drying up. International lenders have pressureddeveloping countries to allow private participation instate-run utilities. "In many ways, States and theiragencies are viewed as "non-creditworthy" borrowersby those who seek capital and those who supply capi-tal. The State is no longer able to mobilize money forinfrastructure building. This is another reason whythe private sector is necessary to develop new power-generation projects. The CEB must also look for in-vestments in electricity generation through non-conventional and innovative financing mechanisms.The BOO (Build, Own, Operate) approach is one ofthese.8 Governments are almost forced to accept thissituation."

The first attempt to involve the private sector inpower supply was a 1992/93 newspaper advertise-ment titled, "Expressions of interest for private sectorparticipation in development of the power sector."There was a large response despite the fact that theCEB announcement published neither project param-eters nor conditions for power purchase. The truthwas, the CEB was unprepared for the response. "Weasked for participation without a defined objective orany sort of framework to follow. It caused a lot ofwork for us," says Tilakasena.

Difficulty raising finances for infrastructure devel-opment already has led to restructuring in the powersector. To redress the State’s problem of granting acounter-guarantee to a private-party loan (a guaran-tee the Government hesitates to give), the governmentestablished the Private Sector Infrastructure Develop-ment Company, a government-owned company de-signed to overcome the critical shortage of long-termdebt for infrastructure projects by providing a long-term subordinated debt facility with a lending capac-ity of U.S.$65 million. This government-managedfund for private-sector infrastructure development isthrough the World Bank and Asian DevelopmentBank. Considering the total investment necessary forpower sector-development, this is a small account, ac-cording to Tilakasena. Therefore the CEB is formaliz-

8. The BOO (Build, Own, Operate) scheme is similar to the independent power producer scheme in the U.S., under whichinvestors build plants and sell power under contract to a local utility. The three projects on-line under this agreement havea combined capacity of 250 Mw.

Institute of Current World Affairs 9

ing a standardized procedure to encourage and ac-commodate the private sector.

On April 10th the first BOO power project began op-eration. The Dick Oya Small Hydropower Project isthe result of a 1993 CEB announcement that it wouldbuy privately-produced electrical energy. Vidya Silpa,a Sri Lankan engineering firm, conceptualized andsubmitted proposals to develop five sites with attrac-tive hydropower potential. The 88 million-rupee DickOya project will supply approximately 8.6 millionunits of electricity annually at a rate of three rupees perunit. Six 175-kilowatt (KWh) turbines are fueled byriver water channeled through penstock pipes. VidyaSilpa relied on financial support from the Develop-ment Finance Corporation of Ceylon (DFCC) and tech-nical support from Jiangxi Machinery and EquipmentImport and Export Corporation of China. This is thecountry’s first private plant solely dedicated to sup-plying power to the national grid.

Mr. Sumanasekara, chairman of Vidya Silpa’s pro-ject, is a former meteorologist who had a great deal ofdata about the flow of Dick Oya. In response to the adand after receiving CEB approval, he used his ownmoney to put in the weir in March 1993. Constructionhad to commence then, when the stream is seasonallyat its lowest. "In May 1993 Sumanasekara asked us(DFCC) for a loan," said Sunil de Silva, a mechanicalengineer and the DFCC credit manager who handledthe Dick Oya account. "DFCC put up 18 million rupeesin equity and 23.5 million rupees in loans. The collabo-rating Chinese corporation invested 10 million rupees.The 1.2-Mw capacity plant can operate at 50% capacityin the dry season and average 80% capacity through-out the year. We thought the project would take twoyears [and be] operational in May 1995. Instead theprocess took three years.

"There was a great deal of stalling by the CEB. Theirapprovals were always late," de Silva said. "We[DFCC] told Vidya Silpa to keep the pressure on andcontinue with construction plans. When things becametoo slow and a few of my colleagues at the bank got in-volved personally. In general the CEB is skeptical of theprivate firm. It is good to have a well-established, well-respected banking institution such asDFCC involved inthe project. The bank’s reputation lent credibility to theproject. Many of us working here [at DFCC] are engi-neers who have classmates ia the CEB. We used our per-sonal contacts to push the paperwork through. Theprocedure was difficult because it was the first one.Now that the groundwork has been laid there should befewer delays." However, even with the delays the hy-dro plant had a shorter then normal gestation period.

"The environmental impact of this project is low: the

powerhouse is almost entirely underground, the chan-nel is only 800 meters wide, there is no submergedvegetation or resettlement scheme, only one squatterwas removed. The environmental-impact assessment[EIA] was a very straightforward analysis. This shouldbe the case for most micro-hydro plants as they do nothave a water storage facility [catchment]. Since DFCCfunds come from the World Bank and the Asian Devel-opment Bank we must fall in line with their regula-tions. DFCC has an in-house EIA unit that hiresoutside consultants for large projects," de Silva added."DFCC has a serious interest in developing the energysector. Plants can be operational two to three yearsfrom the approval date. Dick Oya was slower becausethe CEB had no formal power-purchase agreementwith the private sector. It took a long time to hammerout an agreement. Now we can go ahead with fundingmicro-hydro (plants up to 5 Mw). The CEB will con-nect projects to the main grid. Micro-hydro is supple-mentary, but can give a meaningful contribution.There are about 100 potential micro- and mini-hydrosites in Sri Lanka. We are considering 14 more pro-jects." De Silva thinks that the CEB may not have asmuch enthusiasm for diesel or gas-turbine projects forwhich DFCC has received inquiries. The private sectorhas yet to show interest in coal.

"In the future power supply might become moreprivate, but transmission and maintenance will remainunder state-controL" de Silva concluded. "We atDFCC are willing to coordinate a consortium of banksand foreign collaborators to invest and develop the en-ergy and water sector. We calculate high return on thisDick Oya project. We expect repayment in 4-5 years.Start-up and capital costs are the most demanding. Af-ter completion operation and maintenance costs are

relatively low. The manpower requirement with oper-ators and security does not exceed eight individuals."

DFCC also managed the CEB fund for generatorconcessions during this current power shortage. TheCEB loaned 100 million rupees on a four-year, low-interest repayment schedule channeled throughDFCC. "We are not making any money on this ar-rangement. We are doing it as a service to our clients,"said de Silva. "The whole one-hundred million is goneso we probably gave loans to 20-25 industries to pur-chase generators during this power crisis." 9

Private-sector participation is not limited to elec-tricity generation projects. Another investment strat-egy is to allow the private sector to purchase 51% ofthe shares of Lanka Electricity Company (PVT) Lim-ited, a subsidiary of the CEB. The Board of Invest-ment offers an attractive incentive package of duty-free imports on project-related machinery, raw mate-rials, etc., plus tax exemptions and concessions on

9. Business is booming for importers of electricity generators. Generator sales in February and March 1996 alone exceedsales from the past year. The government waived the usual 10% duty and will reimburse those who placed orders for gen-erators over 100 KVA before March 31. The lowest price for an industrial generator (40 KVA and upwards) is Rs. 675,000(U.S .$12, 616.00).

10 CMC-22

power-sector investments exceeding U.S. $50 million.

Micro-hydro projects and resurrection of the planta-tion sector

R.A. Bhatiya Ranatunga is project manager for theIntermediate Technology Development Group’s(ITDG) micro-hydro scheme. The nonprofit group’sscheme has two divisions: village hydro-power and es-tate hydro-power, and technology development. Inthe early 1980’s ITDG offered consultation servicesand technical advice to up-country estates producingtheir own on-site power for processing and manufac-turing. Of the 5000 tea and rubber estates producingtheir own power during the British colonial era, only200 are in operation today. Most of the machinery hasbeen sold for scrap metal. In 1983 ITDG began to lobbythe CEB to connect the estate sector to the nationalgrid.

"Estates have the potential to supply more powerthan what is needed for their own operation," saidRanatunga. "Despite recent events brought about bythe crisis, the CEB has a general skepticism abouthooking up individual generators to the grid. The gov-ernment adopted international regulatory standards[the G59 code], but problems with formalizing power-purchasing agreements remain. The tea estates receiv-ing ITDG assistance are running at full capacity andsupply the grid at a rate of Rs. 2.90 per kilowatt hour.Purely for profit, more estates are interested in supply-ing the national grid. The BPL Corporation, whichmanages between 20 and 30 tea estates, has formed itsown subsidiary business group to handle hydro-power generation. The World Bank Tea Estates Projectwas approved this week to develop the plantation sec-tor’s power-producing potential. These small-hydroprojects do not do much to alleviate pressure on thenational grid. They can supply individuals or areasthat will not come within CEB purview for another 10-15 years."

Concurrent with the estate project, ITDG visited ru-ral areas in the south to meet enterprising individualswho had started their own household hydro-powergeneration by fashioning crude generators using carbatteries. "At this time we assessed the water re-sources of the south and searched for a way to electrifyvillages, especially those that are far away from thegrid hookup. The farther away the better," saidRanatunga.

In cooperation with the Integrated Rural Develop-ment Program (IRDP), the Rotary Club, the Environ-mental Conservation Fund of the CEA and other localinterest groups, ITDG provides initial technical sup-port and yearly operation and maintenance followupto villagers who are left off the CEB current opera-tional plan and initiate a village-electrification process.The local community must raise 40% of the cost of in-stallation themselves. The remainder comes as grantsfrom the organizations mentioned above. All parts in-

cluding the turbines and electronic load-controllersare manufactured locally by twelve manufacturers, allof whom have received training from ITDG. The own-ers of the village foundry, radio repair shop and otherindividuals who display technical knowledge aretaught to maintain the turbine and fashion spare/repair parts out of locally-available material. Rana-tunga maintained that "Maintenance is not as difficultas most people would think. It usually runs aroundfive percent of the start-up cost per year. Thus far 22village-level projects are complete and ten more are inprogress."

In August ITDG is offering a Micro-Hydro PowerDevelopment Training Course to address Sri Lanka’sshortage of technical expertise. Micro-hydro plants(those that produce between one and 35 kilowatts) arenot scaled-down versions of macro hydro-powerschemes. Their construction, operation and mainte-nance is completely different. The workshop willcover all procedures from feasibility studies, to design,to financing. The selling phrase for training course:"Escalating electricity prices and the possibility of ex-porting self-generated electricity to the national gridare two important developments that have made mi-cro-hydro an attractive investment for the private sec-tor." However, ITDG itself is doing an investigation ofthe entire micro-hydro sector, including estates. Aftersurveying approximately 150 sites, it is tentatively esti-mated that the maximum this sector could supply forthe main grid is 50-60 megawatts.

What does Ranatunga think about the power crisisand micro-hydro’s role in it? "Micro-hydro is supple-mentary. Personally think we need to explore alterna-tive sources and should not campaign against coal.The problem with nuclear power in a country like oursis there is too much corruption in the government sostandards are not adhered to."

"Micro-hydro has a history in Sri Lanka’s plantationsector," says Gunaratne, another Sri Lankan engineer."When the plantation sector was connected to the gridin the late 1960’s, they stopped producing their ownpower because power from the grid was cheaper. Inaddition to the plantation sector there is room for alter-native sources. In the late 1970’s was part of a teamexperimenting with wind, biogas and solar cells tosupply power for a small village between Tangalle andHambantota. Solar may be an option for Sri Lanka butonly on a small scale where it is too difficult econo-mically and technically to connect an area to the grid.Solar power is expensive. Due to high capital costsgeneration costs are roughly Rs. 25 [U.S.$0.50] perunit."

Substitutes and alternative energy sources

Given the problems with electricity-systems plan-ning, will electricity be a reliable substitute for biomass(mainly fuelwood) energy? The Forestry DepartmentPlanning Unit relies partially on CEB planning and ac-

Institute of Current World Affairs 11

Figure 4: Shares of energy consumption in1992 by supply source (%) (FSMP, p.260)

Electricity12%

Petroleum22%

Bio-energy66%

tion to assess how expansion of power generation andthe national grid will affect the demand for biomass re-sources. The Forestry Department engages in its ownforecasting exercises to determine biomass yield andto suggest appropriate land-use alternatives based onprojected needs of the domestic and industrial sector.

During the last two decades annual energy con-sumption has risen by an average of 1.7%. Accordingto the Forestry Sector Master Plan (FSMP), 66% of theenergy consumed in 1992 came from biomass: fire-wood and coconut and paddy husk. Electricity pro-vided only 12% of consumed energy (See Figure 4).Planners for the Forestry Department combine suchstatistics with surveys of urban and rural fuelwoodmarkets in order to forecast demand for firewood overthe next ten years. One FSMP findings is, "Householdincomes are rising, as is the number of people who canafford to buy gas or electric stoves. These trends willreduce the demand for fuelwood over the mediumand long term, [but] the high cost of electricity and thecost of stoves make electricity an alternative only foraffluent families" (p.262). As we have learned, domes-tic consumers pay only half the cost of generation perunit of electricity. Planners at the CEB would enjoy in-creasing the domestic consumer’s price. This woulddrastically alter the Forestry Sector’s plan that electric-ity could become a likely substitute for fuelwood.

Planners in the Forestry Department are worriedabout the country’s domestic sector’s (particularly theurban and rural poor’s) reliance on biomass resources.In rural areas,fuelwood is perceived as a "free" goodthat discourages conservation and encourages ineffi-cient utilization. According to the 1990 national consu-mer survey, 84% of fuelwood used by households wasobtained free by users. On the other hand, the urbanpoor have limited access to biomass resources and can-not afford natural-gas and electric substitutes. As fire-wood prices increase in urban areas, the urban poor,12 CMC-22

including Tamil refugees from the north andeast, suffer the greatest. Price, however, is notthe only- nor necessarily the best- indicatorfor the Forestry Department to use in predict-ing fuelwood substitution in the domestic sec-tor. The effect of fuelwood on the taste of foodand the versatility of switching between fuelsources are among the reasons that many do-mestic consumers will not switch solely to nat-ural gas, kerosene or, if available, electricity.

The new World Bank program to assist theplantation sector in the development of its on-site hydropower generation capacity will af-fect industrial consumption of biomass re-sources. In 1993 the tea industry consumedover 455,000 tons of fuelwood in processing(withering and drying) leaves. The FSMP pro-jects that the tea sector’s future requirement forfuelwood will decrease to 358,000 tons by 2020.The projection was made nearly one year be-fore the World Bank announced its aid pro-

gram. Overall, the Forest Department estimates thatdemand for bio-energy will begin stagnating in 2015and slowly decline after 2020. However, this predic-tion is based on declining population growth rates, al-ternative energy sources and technological innovationin the power and energy sectors. The Forestry SectorMaster Plan anticipates that the Ministry of Irrigation,Power and Energy will play an instrumental role in in-creasing the institutional capacity of the bio-energysector through inter-ministerial coordination and pol-icy studies and formulation. Given mess and manipu-lation within that particular Ministry, it does not seemthat the Forestry Department has chosen a very effec-tive safety net.

Professor K.K.Y.W. Perera, chairman of the ArthurC. Clark Center, is a proponent of dendrothermalpower generation. He asks and answers the question,"Why should one reduce petroleum consumption atthe expense of increased fuelwood consumption?"While increased fuelwood consumption triggers con-cern about deforestation, Perera believes that SriLanka’s excellent climate for growing trees and largeextent of marginal land create perfect conditions forgrowing forests to provide additional energy inputsthrough fuelwood. "If trees are grown and then cutdown and utilized as a fuel for burning, the net addi-tion of carbon dioxide to the atmosphere is zero."

He makes no mention of constant and perhapscostly reforestation efforts in his model. He further be-lieves that there is a national biomass surplus that canbe maintained until 2020 with proper management offorest resources. Dr. Perera states that another advan-tage of dendrothermal energy is a reduction in the bal-ance of payments, which escalates with devaluation ofthe rupee and dependance on foreign fuel sources. Heestimates that shifts from oil to fuelwood in the trans-port, power and industry sectors could save 251,400tons of oil equivalents (plus foreign exchange) by the

year 2000. The transport sector’s research and develop-ment group has been experimenting with vehicles pro-pelled by fuelwood-burning gasifiers for the past fiveyears. Dendrothermal uses fairly low and proven tech-nology to generate electricity. Multiple small powerstations in the order of a few megawatts, located nearplanned fuelwood plantations can be viable opera-tions to connect to the grid. According to Dr. Perera,preliminary economic analysis shows that the costs as-sociated with planting and harvesting fuelwood plan-tations for electricity generation on marginal andunproductive land is lower than the cost of oil andcoal.

Mr. Wijeratna of the CEB planning departmentholds another opinion. "Of all the renewable new tech-nology wood [biomass], solar, geothermal andwind wind stands a chance in Sri Lanka. Globally,biomass generates about 3500 Mw of power. Dendro-thermal is all about land-use planning. Our govern-ment is confused about this. First they say they want toincrease food production and look at improving andusing marginal lands. Then they say that these margi-nal lands should be used for biomass plantations. Wecannot do both; [we can] only wait for the governmentto define priorities."

Due to economics of scale, utilities experience diffi-culty providing power in an environmentally soundmatter. But Dr. Munasinghe’s recent research hopes tochange that. He sees sweeping potential for wind en-ergy. The question the CEB needs to answer is, "Howare we going to proceed with power-sector develop-ment?" The CEB must balance hundreds of optionsand alternative power-generating systems with DSMtechniques and pollution-abatement technologies. Inhis economic models, Munasinghe combines wind en-ergy, DSM and loss reductions in T&D and also advo-cates pressurized fluidized bed combustion coal(PFBC) combined-cycle plants.10 Environmentally thesophisticated technology of PFBC is more attractivethan installing flue-gas desulfurizers on the smokestacks Of conventional coal plants to reduce nitrous-oxide and to lower carbon-dioxide emissions. Themain consideration is commercial. The CEB must ex-plore the availability of PFBC technology, the suitabil-ity of imported coal and operation costs.

Environmental considerations in power-sectorplanning

Since 1979, electricity use in developing countrieshas outstripped gross domestic product (GDP) growthbecause of internal energy subsidies. Price never rosecommensurably. There is 20 to 30 times more per-

capita energy consumption in the developed worldthan in developing countries. There are global envi-ronmental implications caused by increased energydemand. "If we follow the same policy as today, I’llcall that the "business-as-usual-policy; there will be 10times more sulfur dioxide (SO2) and NOx by 2030," Dr.Munasinghe exclaims. "If we introduce new pricesand other measures these pollution rates will fall be-cause energy use will fall. If we couple this with pollu-tion-control devices, we will eliminate an increase inthese pollutants. This will take aggressive action be-cause the addition of pollution-control devices in-creases the needed investment, as these technologiesare expensive.

"All electricity-generating schemes have local im-pacts," says Dr. Munasinghe. "Hydro-p6wer results ina loss of biodiversity, siltation, possession of land anddisplaced populations. Gas and oil bring air and waterpollution and the risk of spills. Coal contributes to airpollution, water contamination and land reclamation.Even the technologies we consider the most enviroomentally friendly solar and wind have extensiveland requirenents11 and are not aestheticallypleasing."

In 1990 the World Bank commissioned a study onacid rain in South and East Asia. The "Rains Asia"model forecast acid rain and SO2 based on 1990 fieldstudies of SO2 soil content. Dr. Munasinghe’s Asianmap is a patchwork of green, yellow and red. Red is awarning sign, indicating serious damage to economiesand health. Red areas already exceed the WHO/FAOstandards for the maximum amount of SO2 in the envi-ronment before crop cultivation and human health aregreatly affected. In 1990 red dominated only smallparts of southeastern China.

"Look what happens to these same areas by 2020,based on the projections if we continue with businessas usuaL" he says as he places down an overlay."China is in a bad way. So is India." The east coasts ofboth countries are completely red. Small parts of West-ern China are red too, but conventionally speaking thisis considered insignificant for few people live out onthe high-altitude plateaus of Tibet. Red is splashedacross Japan and Korea, all fallout from China. "I wasin China last week on a special invitation by the En-ergy Department," Dr. Munasinghe continues. "Theleaders say they want to continue using coal as it istheir cheapest fuel source, but they recognize that in-ternational pressure will increase."

He changes map overlays again as he demonstrateshis argument. "Now, look at the model’s projection

10. A combined-cycle plant is an arrangement in which the excess heat from the gas turbine is used to power a steam turbine,increasing energy efficiency. Combined-cycle plants are inexpensive to build (a little more than half the price of a conven-tional coal-fired plant) and can be built in less than 21 /2 years.11. Interesting fact: All U.S. power needs could be met with solar plants spread over 59,000 square kilometers, less than a thirdas much land as now occupied by U.S. military facilities (Flavin and Lenssen, 1994 p. 68)

Institute of Current World Affairs 13

with the implementation of moderate SO2 controls likelow-sulfur fuels such as 1% sulfur-steam coal and themaximum use of natural gas in energy production.Modeling shows that with imported Australian low-sulfur coal [less than 1% by weight], the 900-Mwplant envisioned in Trincomalee can achieve ambient.,SO standards similar to those met in industrializednations."

This amounts to a greening of Asia almost to the1990 levels, but with an eight-fold increase in energyoutput: Protection without compromising produc-tion. Dr. Munasinghe asserts, "This is what we haveto strive for. If Sri Lanka is going to continue with itsemphasis on coal-fired power plants, it should startwith these stricter measures and construct all plantsto operate on PFBC coal. The material is in ready sup-ply for the country to import."

From an environmental perspective, Sri Lanka hasa distinct advantage. The nation can be a textbook ex-ample of how a developing economy can develop itspower sector with environmental compliance inmind. The decision-makers must decide whether toopt for more expensive, low-sulfur fuels or cheaperfuels and pollution-abatement controls. Pollution-control technology is expensive. Opting for higher-cost, lower-sulfur coals is more economical whencompared to other pollution-abatement options. Insome cases almost 45% of the cost of constructing acoal-fired power plant arises from environmentalcompliance, such as installing scrubbers and flue-gasdesulfurization units on smoke stacks. Whatever thedecision, should the Sri Lankan government bear thecosts for cleaner production alone? Or should thecountries that will be affected by Sri Lankan falloutchip in?

These are interesting ahd important questions, be-cause the data and options are being placed beforedecision-making politicians primarily concerned withthe national context. At present the power sector con-tributes little to air pollution in Sri Lanka. To the poli-tician there is room for pollution from the powersector. Motor vehicles in Colombo, which have in-creased fourteen-fold in twenty years, generateninety-eight percent of the country’s carbon dioxide,79% of nitrous oxide and 46% of SO2 emissions. Theseby-products of combustion contribute to transbounodary pollution: acid rain and the greenhouse effect.Yet acid rain inside" Sri Lanka is more likely to be afunction of air pollution generated in India than fromthermal plants on the island.

Once the thermal options are added to Sri Lanka’sgeneration system, models show that by 2010 thepower sector is expected to contribute 80% of all SO2emissions and 70% of all nitrous oxide emissions gen-erated in-country. The politician confronted with aconflict over conservation and economic develop-ment might prolong decision-making by suggestingthat the debate be moved over to his colleagues in the

14 CMC-22

Ministry of Transport because, based on the model,their sector is the root of the nation’s current air-pollution problem. Scenarios such as this demon-strate the need for painfully slow negotiations andregional conventions. The government has to con-sider its position on global warming and tradeablecarbon emission rights (internationally or regionally-recognized rights to pollute) as well as its regional po-sition on transnational acid rain, for it accepts India’spollution and may well be giving its own to Malaysia.But it also demonstrates why politics and politiciansmust get out of power production.

Incorporating environmental analysis, no matterhow expensive, at the onset of a project is often lessexpensive than the costs associated with delays thatinevitably follow public controversy over the ade-quacy or existence of environmental studies. To thisday the CEB does not include the expense of resettle-ment or the opportunity costs of losses in productiv-ity associated with hydro-dam inundation into least-cost generation planning studies. When the German-assistance agency GTZ submitted an Electricity Mas-terplan, it figured an annual estimated loss of $10

per hectare for scrubland and $530 per hectare of teainto the environmental cost of inundation for eachpotential hydro site. While the increase in total costis marginal, what is important is the process; the factthat the externalities were considered. The publicdoes not like to feel it is being neglected or ignored.

"I understand the environmental issues," confessesCEB’s Wijeratna. "If we enforce our environmentallaws, then there will be no more power. The CEB can-not find a manufacturer that makes a gas turbine[that can] achieve our emissions standards. The prob-lem, is the environmental movement is controlled byfreak groups, not professionals who will sit down totalk and to think about it."

Environmentalists’ sabotage: Generating publicinterest

As the 21st century unfolds, the private sectorwill be the engine of Sri Lanka’s economic growth.The State will be only a facilitator. As one econo-mist told me, "The State is coming around as it

slowly learns that there is nothing wrong withprofit maximization."

In November attended a seminar on the envi-

ronmental-impact assessment (EIA) process for in-vestors and developers sponsored by the Ministryof Transport, Environment and Women’s Affairs.The Central Environmental Authority (CEA) in-vited 75 investors and developers to the Taj Hotelfor a one-day awareness workshop on the EIA pro-cess. Two weeks earlier the CEA held a similarworkshop for the NGO (non-governmental organi-zation) community because, according to Mr. G.K.Amaratunga, CEA chairman, "they are always criti-

cal of development." The NGO community is espe-

cially critical of the CEA’s weak enforcementrecord (CEA in NGO lingo stands for: Can’t enforceanything), but the CEA claims they must give in-dustrialists time.

Environmental Impact Assessments (EIAs) havefour objectives: to analyze project impacts and tomitigate them, to identify alternatives; to make col-lective decisions through public participation; and tomake this information available to the public to en-sure a transparent decision-making process. Accord-ing to CEA officials, the sooner the EIA process isinitiated, the easier it is for the developer to incorpo-rate environmental controls into a project’s engineer-ing and design. If the EIA is commissioned beforethe feasibility study, then any severe environmentalimpacts can be identified beforehand. The investorinevitably saves money on a potentially dead-endfeasibility study by investigating alternatives. Inves-tors should not think of the EIA process as an addi-tional expense.

"The investment community’s biggest misconcep-tion is that an EIA is a guess. EIA is a predictive pro-cess. It is not based on imagination. It is scientific,"says Amaratunga. "Through EIA we want to predictenvironmental impacts of a project and suggest waysof mitigation. The EIA is now legally required for allnew projects including those endorsed by the BOI.EIA concentrate on conflicts, problems and natural re-source constraints; those that harm people, their live-lihood or land or nearby developments. An EIA is nota separate process but a system of continuous moni-toring. Developers always tend to leave the EIA to theend and then their development is delayed bylengthy court battles. This is an avoidable situation ifthe EIA is done first. It is legally required to examineat least two or three alternatives to the preferred pro-ject site or design."

The public, led by local environmental groups,played a large role in stopping the construction of theCeylon Electricity Board’s Upper Kotmale PowerPlant. In the Spring of 1995 Ajantha Palihawadana ledthe campaign. According to Palihawadana, the sitingwas inappropriate. The proposal was based on inac-curate biological information. The EIA report was fullof inaccuracies, including mention of several fish spe-cies that have not inhabited the waters for years. Thisconclusion caused opponents to question whether ornot the EIA team ever visited the site. The projectwould divert water from three major waterfalls andcause a shortfall in four minor downstream water-falls. The area is geologically unstable and prone tohigh rates of soil erosion and land slips. Furthermore,the developers proposed no other alternative sitesand failed to justify why Upper Kotmale is the onlypossible site for the project.

The CEB proposal was rejected by the CEA, thegovernment’s Project Approving Agency, and theEIA Cell of the Ministry of Irrigation, Power and En-

ergy because they all believed that the CEB did notexplore possible environmentally- and technically-sound alternatives. The CEB appealed to the Secre-tary of the Ministry of the Environment. The Secre-tary rejected the proposal on the same grounds.Three days after the decision, the national news tele-vised the sea of placards from Palihawadana’s rally.Upper Kotmale is a sore spot for the CEB. Rumorhas it that the EIA has been re-opened and new pres-entations are being given to the proper authoritativebodies. CEB officials deny the project is under re-consideration.

Politicians and bureaucrats believe that environ-mentalists and their EIA process are meant to discou-rage the nation’s development. Volunteers postsignboards in neighborhoods to be affected by newprojects to inform residents about upcoming publichearings and instruct interested individuals on howto acquire EIA reports and make sense of them. Theaverage citizen has the right to protest any projectand submit alternative ideas. The project proponenthas the right of appeal to the Ministry Secretary if theproject is rejected.

In the past two years the public has commented tovarious degrees on 100 EIAs and IEEs (Initial Envi-ronmental Examinations). "Environmental offensesare criminal offenses," says Mr. M.K. Muthukuda-rachchi of the CEA’s environmental protection unit."Industry, and that includes fossil-fuel-fired plants,must obtain environmental pollution licenses (EPLs).Discharging wastes even at the standards is illegalwithout the EPL. Investors and developers haverights, but they also have obligations to comply withregulations. If an environmentally-related concernarises during a public hearing, it is not delaying orstopping development. It is improving the process ofsustainable development."

Sustainable development, social justice and proce-dure. The construction of the Hambantota Oil Refin-ery and 300-Mw thermal power plant is trappedunder mountains of citizens’-groups paper work filedafter the corporation started construction without afeasibility study and bypassed all stipulations of theenvironmental regulatory framework. Hambantotawas never considered as a possible site for a coal-powered plant in the early 1990’s when the CEB con-ducted its own feasibility studies; the wind’s direc-tion would blow all the particulate matter inland. TheElectrical Engineers’ Association of Ceylon believesthe site is not suitable, since construction of a 150-kin-long transmission line is necessary to connect theplant to the grid. As of today only one major project(the Upper Kotmale Hydro-Power Project) has beenstopped by public appeal.

EIA reports are among the most open documentsin Sri Lankan regulation, allowing public participa-tion and transparency. Public participation may notbe as popular or important as the government wants

Institute of Current World Affairs 15

the public to think it is. Since 1995 officials of the De-partment of National Planning have tried to incorpo-rate several changes to the National EnvironmentalAct including:

1. denying the public the right to participate inpolicy formulation,2. relaxing emissions standards for certain areasof the island, and3. removing the EIA/IEE processes for projectimplementation.

Additional action against public participation camein mid-March, when the Cabinet passed a measure toreduce the EIA public-grievance period from 30 to 14days. Thirty days allows just enough time to read EIAreports, organize public meetings and submit writtenappeals, say lawyers at Environmental FoundationLimited, a public advocacy group.

During EIA public hearings power generation fallsunder just as intense public scrutiny as prawn farmingand highway expansion. Two of Sri Lanka’s largest hy-dropower projects are plagued with problems that anexploratory EIA with public participation might haveavoided. The Mahaweli Multi-Purpose Project mademany of the new resettlernent regions of the dry zoneuninhabitable, since there was not enough water for ir-rigation necessitating another resettlement exercise.Farmers who persevere at the original resettlementsite are confronted by elephants that raid crops and oc-casionally take human life.

No public meetings were held and the feasibilitystudy was not made available for comment during theearly phases of the Samanalawewa Hydropower pro-ject. Officials across many Ministries are facing long-term impacts, including the loss of rare- and interme-diate-zone riparian forest, threats to at least five spe-cies of endemic fish due to inundation, social impactsdue to resultant landlessness and failure on part of therelevant authorities to provide back-up agriculturalservices, inundated gem resources and the loss ofstored water due to the presence of a concealed tunneland leakage from the reservoir’s right bank. Even be-fore the leakage started, people in the area said thatthey knew of the presence of a limestone layer and theexistence of an ancient underground tunnel. This laterinformation might have been brought forth during theEIA or public hearing.12

In a more recent case the public gave its full supportto the Kukule Ganga Hydropower project once the rel-

evant authorities agreed to reduce the capacity of thereservoir. Authorities scaled the project back from a144-Mw high-dam project to a smaller 70 Mw run-of-river project that involves the resettlement of only 27families. Under the original plan an estimated 9,100 in-dividuals would have been relocated. What were someof the trade-offs? Under the original plan, the Kukulereservoir would have irrigated 68,000 hectares of landin the southeastern dry zone, of which 95% was newland, theoretically increasing agricultural productionand perhaps easing the government’s perceived prob-lem of unemployed youth.

Once relevant authorities incorporate measures toreduce environmental impacts and protect surround-ing communities, the public often agrees. On April 12,a Norwegian company carried out rock mechanicaltests at an underground site in Kalutara, the location ofthe 12.5-billion rupee Kukule Ganga hydro-power pro-ject. The plant, funded by the Japanese, is expected togenerate 317 million units of electricity. The water ofthe Kukule Ganga, a tributary of the Kalu Ganga, thecountry’s second largest river, will be diverted fromthe head pond and channeled to an undergroundpower station with two 35-Mw turbines.

The NGO movement claims it is not out to sabotageprojects, only to fulfill its obligations and duties to so-ciety at large. The public is not against development. Itsimply does not want to be hoodwinked by the gov-ernment and financiers.

What can we expect in 1997? The Minister ofPower and Energy said he has initiated an action toavert power cuts next year. The CEB, is workingwith BOI to obtain 80 Mw of standby generation ca-pacity to meet any power shortage. The CEB, whichoffered duty-free and soft loans for the import ofgenerators, will grant similar incentives during thefirst six months of next year. The procurement a of80- to 100-megawatt combined-cycle plant has beenfast-tracked. A tender was awarded in early 1995 forthe construction of an Asian Development Bank-funded 40-Mw diesel plant. Lastly, the Ministry is fi-nalizing a plan to bring a 150-Mw Combined CyclePlant costing seven billion rupees on-line in 1999.

"We need a commitment on behalf of the Govern-ment," Mr. Wijeratna stated over and over again. "TheMinister told me yesterday that have to get a gas tur-bine operating in one year so we do not have such a se-vere problem next year. All can say to that is, "Let’ssee how we do." GI

12. Because of the leakage, the Samanalawewa station can be operated only at minimum capacity, which reduces the averageenergy expected from this plant from 357 GWh per year to 288 GWh per year. Since Samanalawewa is also part of an inte-grated-system operation, integrated hydro-thermal operation simulation studies find that the loss of storage reduces the inte-

grated-system operation from the Kelani and the Mahaweli hydro stations from 3869 GWh per year to 3785 GWh per year, areduction of 2.2%.

16 CMC-22

SOURCES

Letters to the Editor Daily News April 11, April 3, March 24.

Get up and Get on with energy planning. The Sunday Times Business Section p. 1April 7.

CEB mismanagement blamed for power cuts. 1996. Weekend Express April 6. p.1.

Blunders behind the blackout: Power officials sit on plans. Sunday Times April 7. p.1.

ODA gives Rs. 152 million to Mahaweli. 1996. The Sunday Observer March 3. p.4.

Action to avoid complete black out: power cuts without notice from today. DailyNews p.1.

Perera, K.K.Y.W. 1996. Introduction to the National Energy Situation. Paper pre-sented at the Workshop on Nuclear Power and Energy Planning. 22 April.

Biosphere: Quarterly Bulletin of Environmental Foundation Ltd. 1996. Vol. 2. Nos.1,2&4.

Forestry Sector Master Plan. 1995. Forestry Planning Unit. Ministly of Agriculture,Lands and Forestd, Sri Lanka. 511 pp.

Tietenberg, T. 1988. Environmental and Natural Resource Economics. 2nd edition. Illi-nois: Scott, Foresman and Company. 529 pp.

Flavin, C. and N. Lenssen. 1994. Reshaping the Power Industry. State of the World1994. New York: W.W. Norton & Company. pp. 61-80.

Meier, P. and M. Munasinghe. 1994. Incorporating Environmental Concerns into PowerSector Decisionmaking: A case study of Sri Lanka. Washington, D.C.: The World Bank.150 pp.

Institute of Current World Affairs 17

INDIA

TAMILNADU

18 CMC-22

Institute of Current World Affairs

Current Fellows and their Activities

Adam Smith Albion. A former research associate at the Institute for EastWest Studies at Prague inthe Czech Republic, Adam is spending two years studying and writing about Turkey and Central Asia,and their importance as actors the Middle East and the former Soviet bloc. A Harvard graduate (1988;History), Adam has completed the first year of a two-year M. Litt. degree in Russian/East Europeanhistory and languages at Oxford University. [EUROPE/RUSSIA]

Christopher P. Ball. An economist, Chris Ball holds a B.A. from the University of Alabama in Hunts-ville and attended the 1992 International Summer School at the London School of Economics. Hestudied Hungarian for two years in Budapest while serving as Project Director for the Hungarian At-lantic Council. As an Institute Fellow, he is studying and writing about Hungarian minorities in the for-mer Soviet-bloc nations of East and Central Europe. [EUROPE/RUSSIA]

Cynthia Caron. With a Masters degree in Forest Science from the Yale School of Forestry and Envi-ronment, Cynthia is spending two years in South Asia as ICWA’s first John Miller Musser MemorialForest & Society Fellow. She is studying and writing about the impact of forest-preservation projectson the lives (and land-tenure) of indigenous peoples and local farmers who live on their fringes. Herfellowship includes stays in Bhutan, India and Sri Lanka. [SOUTH ASIA/Forest & Society]

William F. Foote. Formerly a financial analyst with Lehman Brothers’ Emerging Markets Group, WillyFoote is examining the economic substructure of Mexico and the impact of free-market reforms onMexico’s people, society and politics. Willy holds a Bachelor’s degree from Yale University (history), aMaster’s from the London School of Economics (Development Economics; Latin America) and stud-ied Basque history in San Sebastian, Spain. He carried out intensive Spanish-language studies inGuatemala in 1990 and then worked as a copy editor and Reporter for the Buenos Aires Herald from1990 to 1992. [THE AMERICAS]

Sharon Griffin. A feature writer and contributing columnist on African affairs at the San Diego Union-Tribune, Sharon is spending two years in southern Africa studying Zulu and the KwaZulu kingdomand writing about the role of nongovernmental organizations as fulfillment centers for national needsin developing countries where governments are still feeling their way toward effective administration.[sub-SAHARA]

John Harris. A would-be lawyer with an undergraduate degree in History from the University of Chi-cago, John reverted to international studies after a year of internship in the product-liability depart-ment of a Chicago law firm and took two years of postgraduate Russian at the University ofWashington in Seattle. Based in Moscow during his fellowship, John is studying and writing aboutRussia’s nascent political parties as they begin the difficult transition from identities based on the per-sonalities of their leaders to positions based on national and international issues. [EUROPE/RUSSIA]

Pramila Jayapal. Born in India, Pramila left when she was four and went through primary and secon-dary education in Indonesia. She graduated from Georgetown University in 1986 and won an M.B.A.from the Kellogg School of Management in Evanston, Illinois in 1990. She has worked as a corporateanalyst for PaineWebber and an accounts manager for the world’s leading producer of cardiac defib-rillators, but most recently managed a $7 million developing-country revolving-loan fund for the Pro-gram for Appropriate Technology in Health (PATH) in Seattle. Pramila is spending two years in Indiatracing her roots and studying social issues involving religion, the status of women, population andAIDS. [SOUTH ASIA]

John B. Robinson. A 1991 Harvard graduate with a certificate of proficiency from the Institute ofKiSwahili in Zanzibar and a Master of Fine Arts in Creative Writing from Brown University, he andhis wife Delphine, a French oceanographer, are spending two years in Madagascar with their twoyoung sons, Nicolas and Rowland. He will be writing about varied aspects of the island-nation’sstruggle to survive industrial and natural-resource exploitation and the effects of a rapidly swellingpopulation. [sub-SAHARA]

Teresa C. Yates. A former member of the American Civil Liberties Union’s national task force on theworkplace, Teresa is spending two years in South Africa observing and reporting on the efforts ofthe Mandela government to reform the national land-tenure system. A Vassar graduate with a jurisdoctor from the University of Cincinnati College of Law, Teresa had an internship at the Centre forApplied Legal Studies in Johannesburg in 1991 and 1992, studying the feasibility of including so-cial and economic rights in the new South African constitution. [sub-SAHARA]

Institute. nf C;=JrrP.nt Wnrld Affir.

The Institute of Current World Affairs4 WEST WHEELOCK STREETHANOVER, NEW HAMPSHIRE 03755

ADDRESS CORRECTION REQUESTED

Author: Caron, Cynthia M.Title: ICWA Letters South AsiaISSN: 1083-4257

Imprint: Institute of Current World AffairsHanover, NH

Material Type: SerialLanguage: EnglishFrequency: Monthly

Other Regions: East Asia; Mideast/North Africa;Europe/Russia; SubSaharan Africa;The Americas

Chosen on the basis of character, previous ex-perience and promise, Institute Fellows areyoung professionals funded to spend a mini-mum of two years carrying out self-designedprograms of study and writing outside theUnited States. The Fellows are required to re-port their findings and experiences from thefield once a month. They can write on anysubject, as formally or informally as theywish. The result is a unique form of report-ing, analysis and periodical assessment of in-ternational events and issues.