News
PM’s Office takes massive Rs. 275 mn from LECO to develop Mihintale
The Prime Minister’s Office is dipping into the Lanka Electricity Company (Pvt) Ltd kitty.
A Cabinet note submitted on August 20 voices its intention to suck out a massive Rs 275 million–several years worth of LECO corporate social responsibility (CSR) projects–in one go, to develop the Mihintale World Heritage site.
The move is said to have met with strong opposition from the LECO Board. However, the Government is determined to use the funds for the stated purpose, authoritative sources said. Details of just what would be done with the Rs 275 million were not immediately available.
“The Cabinet noted the information provided by the Prime Minister that the development of the Mihintale World Heritage Site, its renovation and lighting up could be undertaken as a Corporate Social Responsibility (CSR) Project of the Lanka Electricity Company (Private) Limited under an expenditure of Rs. 275 million (without tax),” the list of Cabinet decisions for the relevant week states.
The amount is particularly steep considering that the LECO’s CSR bill for 2017 was just Rs 9 million. The money went towards relief for natural disasters and education.
The previous year, the tab was Rs 7.8 million, spent on providing public address systems to schools, sponsorship for social and assisting improvements in the Electrical Department of the University of Moratuwa. And, in 2015, the company spent Rs 5.3 million on CSR.
The total for all three years, therefore, was just Rs 22.1 million — forty percent of what is now being sought for a single project. There are no details in the annual reports found online for CSR projects in 2014 and 2013. But the total donations and contributions in those two years were Rs 538,000 — Rs 233,000 of this came from the group.
In 2012, the company granted sponsorship for educational, cultural and social activities carried out by schools and other organisations. The total spent was Rs 670,000.
In 2011, donations amounted to Rs 187,000.
LECO is financially autonomous and has been called “a benchmark model to be followed in Sri Lanka” in a recent World Bank report on the country’s energy sector. It has managed to remain debt free and continues to invest more than Rs 1 billion annually in expanding the distribution network.
Its capital requirements are funded by internal cash accruals from operations, or by receivables from outstanding loans to the Ceylon Electricity Board and other sector stakeholders.
The CEB and the Ministry of Finance are major shareholders in LECO, with other shareholders also being State entities.