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Sri Lanka electricity: Getting what you pay for
26 May, 2014 07:28:48
By Rohan Samarajiva
May 26, 2014 (LBO) We believe that micro enterprises are important. If they succeed, they become small businesses and then medium enterprises. That is how development happens.
We wanted to find out how poor micro enterprises were served by mobile companies and by electricity distribution companies. LIRNEasia conducted random-sample surveys in three countries (actually in strong cities and weak cities in Bangladesh, India and Sri Lanka). The sample was 3,180 micro enterprises (defined as employing 0-9 persons) from the lower SEC classifications. In addition, qualitative research was also conducted.

What they use and what they pay

Sri Lanka, India, Bangladesh electricity micro business

Over 80 percent of Sri Lankan respondents used electricity and mobile phones for business purposes. A large proportion of the Indian respondents did not have fixed places of business, which reduced their reliance on electricity. In Sri Lanka and Bangladesh there was almost total reliance on grid electricity. Around 35 percent of those who used electricity in India, relied on batteries, diesel generators and solar.

Sri Lanka, India, Bangladesh electricity micro business

Sri Lankan poor micro enterprises pay more than double for electricity than their counterparts in Bangladesh and India. They also pay more for their phone calls, but they seem to make a lot more use of their phones than their counterparts.

Yet, they experienced outages and voltage fluctuations.

Sri Lanka, India, Bangladesh electricity micro business

Yet, they did not complain that much.

Sri Lanka, India, Bangladesh electricity micro business

In case of a power outage, around 35 percent of Bangladeshi micro enterprises had backup diesel generators available and over 20 percent of the Indian enterprises had invested in inverters. In contrast, most Sri Lankan micro enterprises had not invested in these technologies. A full 41 percent said they had no backup facilities. The next largest category (36 percent) reported they had candles.

What this shows is that while micro enterprises (and others) in Sri Lanka pay a lot more for electricity than their counterparts in Bangladesh and India, they do not have to bear the costs of backup equipment that is essential in the other countries where there is no commitment to 24/7 supply. This is a clear benefit of Sri Lanka’s no-load-shedding policy.

Reliable supply is reported as being essentialby all micro enterprises.

Sri Lanka, India, Bangladesh electricity micro business

Close to 60 percent of Sri Lankan respondents reported that they do not receive advance notice of outages. Of those who do, over 60 percent were informed over TV or radio in Colombo. For the respondents in Wayamba, the public announcements made by the CEB were the main source of information.

What can be done

Outages are a serious problem for those who run micro enterprises. One person we interviewed, a young woman who operated a beauty parlor, said that she could not offer her services without power. That meant lost revenue. If she knew of a planned outage, she could reschedule her clients. Even with an unplanned outage, if she was quickly informed of the when service was likely to be restored she could use her phone to reschedule clients and minimize the disruption to their lives and to her business.

The supplier does not know how big a problem outages are, because most customers are fatalistic about them and do not complain. In addition, the mechanisms in place to receive complaints are imperfect. Call centers are in place only in some areas, so it is necessary to remember long number strings. Since an outage affects many at the same time, the CEB or LECO number tends to be busy when people call. It has also been recorded that after the first few calls come in, the staff give priority to fixing the problem, sometimes leaving the phone off-hook.

The solution involves the use of the ubiquitous mobile phone. In addition to the conventional methods of public and media announcements, we proposed to CEB and LECO that they send out SMSes. Unlike the other methods, SMSes are effective even for unplanned outages. If the SMS can include information on when service is likely to be restored, people will not keep dialing the regional office or the call center, but will use that information to rearrange their schedules.

The main lesson we take from our survey is that CEB and LECO should give the highest priority to ensuring uninterrupted power supply. Our people pay more than double what their neighbors across the water pay. They deserve uninterrupted supply. But some outages are inevitable. What we propose is that their negative effects be minimized using the potential of the mobile phone.

There is no objection, in principle, on the part of CEB and LECO. Their response is that not all their customers give them their mobile numbers. We suggest that the process be made as simple as possible, for example, allowing the number to be sent in the form of a SMS. Procedures such as filling up forms are too cumbersome.

The companies must effectively market the service, communicating with the five million or so customers they have with attractive and informative leaflets that can be handed over along with the bill. These messages must provide assurances that the phone numbers will be used only for purposes directly related to improving electricity service and will not be used for any other purpose. Some media publicity would also be useful to reinforce the message.

Rohan Samarajiva heads LirneAsia, a regional think tank. He was also a former telecoms regulator in Sri Lanka. To read previous columns go to LBOs main navigation panel and click on the 'Choices' category.

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READER COMMENT(S)
8. Nilusha Kapugama Jul 14
@MLW Happy to hear about the sign up for the LECO services. You are right, the services are available in some CEB areas and LECO. However, there are CEB regions which it is yet to be deployed in.

Both CEB and LECO officials have noted that sign up for the services were extremely low. This is referred to in the article, where "both CEB and LECO say that not all their customers want to give them their mobile numbers". Sign up processes for some of the services are complicated (some even require the customer to fill out forms and some electronic systems had teething issues). You are absolutely right about the lack of publicity for these services. In some cases we came across CEB personnel who were unaware of the services in their area of residence.

Given that the services are yet to be deployed in some areas, the lack of success of the system does not bode for any plans for it to be deployed further. Therefore, it is important to ensure the sign up of these services is not complicated or cumbersome and adequate publicity is given to ensure that the customers use them.

7. Rohan Samarajiva Jul 14
Nowhere was it stated that this is a completely novel idea. It is implied in the following text that the problem is lack of awareness + resistance to giving numbers to CEB/LECO: "Their response is that not all their customers give them their mobile numbers. We suggest that the process be made as simple as possible, for example, allowing the number to be sent in the form of a SMS. Procedures such as filling up forms are too cumbersome."

When take up is in the single digits and most customers we surveyed were unaware, one can see the justification for the recommendations.

6. MLW Jul 14
Strangee but this system is already in place in CEB and LECO. LECO and certain provinces of CEB already issues customers planned interruption notifications, bill payment reminders etc by SMSs. I, as a LECO consumer gets even SMSs when a breakdown occurs in my Area. (They call it LECO "Andaharaya" and one has to register).

CEB already have a service of informing breakdown to 1987 call center via an SMS. CEB account balance at any time can be obtained by sending an SMS. However, this article shows how weak the communication of even the available utility services back to consumers.

5. Rohan Samarajiva May 29
@xtian's interpretation is correct and the figure by itself is ambiguous. My apologies for not including the survey question relevant to Figure 3. It asked "Did you face this problem? (% low-income MEs who use electricity for business from electricity co.)" and gave a list of problems.

The question was not about the frequency of the occurrence of the problem, but about whether it had been experienced. So, yes. Sri Lankan respondents did not experience blackouts and voltage fluctuations as much as their Bangaldeshi and Indian counterparts.

4. xtian May 28
What this shows is that while micro enterprises (and others) in Sri Lanka pay a lot more for electricity than their counterparts in Bangladesh and "India, they do not have to bear the costs of backup equipment that is essential in the other countries where there is no commitment to 24/7 supply. This is a clear benefit of Sri Lanka’s no-load-shedding policy."

However, this is not reflected in Figure 3 where micro enterprises Sri Lankan cities report higher occurrences of black outs. Given the regular load shedding in most Indian cities, I doubt the data. Comparatively SL is much less affected by black outs.

In Figure 4, Sri Lankans complain more about blackouts because they don't expect them to happen and are not prepared. Whereas in Indian cities availability of Electricity is not taken for granted, and people are better prepared because load shedding is a daily occurrence often lasting for hours.

3. KG May 26
Cell broadcast should only be used to warn of emergencies/ impending disasters. Otherwise people will not pay attention to their importance (if they keep getting too may cell broadcast messages).
2. Rohan Samarajiva May 26
Cell broadcast was my favorite too. It has the advantage of not requiring phone numbers to work. But extensive investigation showed there were problems such as people in adjacent areas.
1. Weeramna May 26
What about cell broadcast. You can target them to particular areas where base stations are located.

However do people keep this service activated?