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Saying it like it is
Sunday, 1 June 2008 - 11:46 AM SL Time
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The General Manager of Railways, Lalithasiri Gunaruwan, in a burst of candour last week blasted the long-held myth that governments, whoever they are, subsidizes consumers be they kerosene or diesel buyers or bus or train travelers. He rightly pointed out that when so-called subsidies are given to sections of consumers, all the people including those who do not consume the subsidized products, pay for them. This is a self-evident economic truth that too many people do not fully realize consciously. Thus when train fares are subsidized, those who never ever use a train also bear part of the cost. The much touted diesel ``subsidy that leaders of government from the president downwards have long trumpeted as an index of their concern for public transport users and the price sensitive haulage sector, means that petrol users, including poor three-wheeler drivers, carry the tab for the cross subsidy. So the rich man riding a luxurious diesel powered sports utility vehicle (SUV) has part of its cost paid for by three-wheeler operators.
This is the stark reality and the sooner people understand it the better. Governments, and not only this one, have for too long conned the people on fuel subsidies. It is seldom if ever admitted that a major revenue stream for the exchequer comes from the various taxes charged on fuel. When whoever is in a seat of authority talks about the cost of fuel and the sale prices, pointing out that the various types of fuel are being sold below cost, the tax component is conveniently ignored. This is the kind of spin that the people are subjected to by their leaders who heap their own plates with gravy at the cost of those they represent. A crunch time is now approaching with the recent increase in fuel prices having already forced increase in bus fares. In all probability rail fares will almost double in the very short term because the railway cannot continue to depend on the Treasury for the various handouts it needs to keep its services going at the present fares. Haulage rates are up and that reflects on the cost of everyday essentials.
There is very little chance, if any, of the rising trend in international oil prices reversing. An ever optimistic leadership relates sunshine stories about the prospects of finding oil off our shores. Even if such is the case, and there are grounds to hope this is so, it will take a very long time to exploit such a resource to the advantage of the country. What matters to ordinary people is the cost of what they must take home in their grocery bags every few days and this, already at impossible highs due to the galloping inflation unleashed by unsustainable budget deficits and money printing, is now going higher in sympathy with higher oil prices. When the president met newspaper editors and heads of the various electronic media early last week, Central Bank Governor Ajith Nivard Cabraal said that the only way rising global oil prices can be countered by a country like ours is by a sharp reduction in fuel consumption. He said that government was looking at a 25% target. President Mahinda Rajapaksa added that proposals to achieve this objective are being awaited in the short term.
We do not think our readers will brand us as cynical if we say that it is very unlikely that government will impose fuel restrictions on either the political or bureaucratic establishments that have for too long been profligate consumers of diesel and petrol at public expense. The vast number of those swanking around in high powered, fuel-guzzling vehicles on our roads, do not pay for their own petrol (or diesel). Either the government (read tax-payer including the beggar on the street who also pays indirect taxes) or their companies pick up the tab. If a 25% saving in consumption is to be achieved, a first step would be to impose an across the board 25% slashing of fuel use by the public sector. That should include everybody right down from the top to the bottom. The price deterrent now in force will lower consumption to a degree, as has been seen in the case of wheat flour in recent months. But other measures too must be imposed. One of these would be to end the gridlock traffic jams, in Colombo particularly, that compel the wasting of billions of rupees worth of fuel every day. Some practical ideas, like banning all cars on the roads during specified hours, and leaving them free for buses, and banning buses and lorries from the roads at other times, clearing them for cars has been suggested in an article we run in our business section today. It has been written by a qualified accountant now turned dry zone farmer. There are other ideas too that have been offered in that article and these certainly merit serious examination. Some, we think, can be usefully implemented.
GMR Gunaruwan said at the press conference that followed the fuel price hike that the railway charges 50 cents fare per passenger kilometer while the buses charge twice that amount. But Transport Minister Dullas Alahapperuma, who was also present at the briefing, wants the railway to keep train fares a shade below that of buses. Other anomalies also emerged during that discussion. The minister pointed out that while ordinary people paid 50 cents a passenger kilometer to travel by train, government servants paid only five cents and the railway s own employees, there are 17,000 of them, just three cents! It is unlikely that a government demanding economies from the people in the context of spiraling global oil prices will have the political will to take away perks it gives its employees and face the consequences. Doling out duty free vehicle permits to public servants was not done out of appreciation of the onerous work load they carry. It was all a question of soliciting their political support. Right now CEB engineers who had been excluded from the last such concession are mounting a rearguard action withholding attendance at technical committees etc. in an effort to get the perk. We would offer better than even odds that they will get what they want at this stage, or later when they ratchet up the pressure. Our governments, sadly, too often does what is convenient rather than what is right. And given that the politicians who lead them are ever mindful of their own interests, both material and political, the caravan will continue the same old way.
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Sam007
Joined: Aug 2005
Posts: 176
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 1 Jun 2008 08:47:13 GMT Report for Abuse
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| Sad but what Mr.Gunaruwan has said is the truth, which most of the plticos don't want to listen to and don't want to do. They think they knows best. What is the point we are having people who are knowledgeable in this sort of situations who are qualified to give solutions if they are not being used. |
Magnum357
Joined: Oct 2007
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 1 Jun 2008 15:21:56 GMT Report for Abuse
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What is the point we are having people who are knowledgeable in this sort of situations who are qualified to give solutions if they are not being used
There are hardly any such people remaining in the country. Most have left the country, the others are leaving or leave given the opportunity, as they all get to know that their knowledge is vauled not by our leaders but by leaders of other countries.
What our political leaders value is not education or the capability of doing a proper job that benefits the Nation. Our political leaders value thugs and henchmen who would see to it that the political leaders remain in power.
Edited By - Magnum357 - 1 Jun 2008 15:26:08 GMT |
Gaja
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 2 Jun 2008 01:52:57 GMT Report for Abuse
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So the rich man riding a luxurious diesel powered sports utility vehicle (SUV) has part of its cost paid for by three-wheeler operators
Likewise, the luxury of Sinhala only practices are being paid for by Tamils who never ever use the langauge.
Gaja Lakshmi Paramasivam - Australian Tamil |
Vishnu
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2 Jun 2008 04:42:22 GMT Report for Abuse
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Tamils who never ever use the langauge.
Yes, Tamils were banned from using Sinhala by the government. I hope as you are now using English pretty often than Tamil in Australia, Tamil is a burden for you. Or English only practices in Australia is an expense for you. |
Vishnu
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2 Jun 2008 04:50:08 GMT Report for Abuse
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There are hardly any such people remaining in the country. Most have left the country, the others are leaving or leave given the opportunity,
Magnum,
You are partially correct. It is unlikely majority of those who left are qualified to solve these problems. Others who leave given the opportunity do not have strength, courage and initiative to engage in solving the problems. However, on arriving in developed nations, they get to taste the proposed 'fair' taxing schemes as opposed to one that is practiced in SL. I wonder how many have the heart to accept that they've judged the country unfair. (Note that those poor people who pay taxes for the benefit of the luxuries of others are neither aware of it nor able to leave the country.) |
saliya
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 2 Jun 2008 13:37:13 GMT Report for Abuse
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| CGR must not ask any money as subsidery to run the railway system as they got what they wanted. If they can minimize thier inefficiencies and malpractices CGR can run as a profitable institute even with less ticket fare. Why don't govenment allow private sector to use the railway tract for container transport?. This will help to improve efficiencies of CGR as private sector is more competitive. |
fediri123
Joined: Apr 2008
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3 Jun 2008 10:45:21 GMT Report for Abuse
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| You are a real son of SL. Well done. Now only the train travllers will pay for the upbringing of railway under your guidance. And railway fair must have been increased a long time ago. |
fediri123
Joined: Apr 2008
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3 Jun 2008 11:06:28 GMT Report for Abuse
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| And another but it is not under your purview but at discussion I hope you can bring this into notice. The private bus drivers 5/10 before they move they start their engines and keep accelerating to show that they immediately leave. In this manner how much diesel they burn. At least the time keepers can have an eye on as this is a national crime. In deed those people may be able to pay the cost of their fuel but as a nation all have to pay for importing. I don't know whether Dr. Gunaruwan has noticed that some railway engines like coal powered day are kept running a long period at a station by the drivers as they are not well informed the repercussion of burning the fuel. For simple example the Udarata Menike that comes to the Fort Railway station from the yard the driver may not stop the engine though he has more time to depart from the station. This is only one example Dear sir if you can intervene to this it's a great saving to the Railway particularly, and broadly to the nation. I believe that there is no problem of shutting down the engine till the movement starts. |
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