Private sector slams proposed electricity tariffs

Host of industries present objections to Public Utilities Commission   

By Shezna Shums

The private sector is strongly objecting to the proposed electricity tariff by making its representations to the Public Utilities Commission (PUC), but authorities are doubtful whether it will result in changes.

The public hearing on setting of electricity tariffs was held yesterday with the participation of a host of industries, including the hotel sector, apparel, manufacturing, packaging, ceramics and rubber.

Officials of the Ceylon Electricity Board (CEB) and the Lanka Electricity Company were present when the industries submitted objections to the recently-proposed high electricity tariffs. Submissions were made by industry representatives as well as individual businesses.

The proposed electricity tariffs vary according to the industry and have sparked a great deal of frustration among several businesses, as the proposed high electricity tariffs will impose an added burden on exports.  



The business community argues that the tariffs will make Sri Lankan products less competitive in the world market, opening the possibility of loss of employment opportunities, along with losing investment opportunities to countries with lower costs of production and also push people to look for greener pastures out of Sri Lanka.

President of the Hotels Association Anura Lokuhetty told Daily FT that even CEB and Lanka Electricity Company gave the impression at the public hearing of it being an administrative nightmare to implement the proposed increased tariffs, given the various tiers and rates.

He said that the hotel industry was hit with one of the highest tariff increases of about 111% when compared with the current rate and some other industries would also suffer.

“Now the Government should provide encouraging rates to make Sri Lanka a competitor in the world market and then the electricity issues will automatically fall into place,” he added, calling on the Government to rethink its stand on the proposed electricity tariffs for next year.

Meanwhile, Immediate Past President, Sri Lanka Ceramic Council and Chairman of Dankotuwa Porcelain, Sunil Wijesinghe said that they too made representations at the public hearing.

Wijesinghe said that they urge the Government to provide an equal playing field to all industries, rather than providing some with lower and others with higher electricity tariffs, unless there is a specific need to do so.

“The ceramics industry is barely managing to stay afloat and a high electricity tariff will make Sri Lankan ceramics uncompetitive,” he said.

Wijesinghe explained that other countries in the region such as Bangladesh had lower labour costs and lower energy costs, thus making their products more competitive in the world market.

If the cost of production of ceramics is increased, this will only make the products lost their competitive edge in the world market, he explained.

The ceramic industry is highly energy intensive and energy costs generally constitute around 50% of the total cost of production in most ceramic factories.  The high cost of production at present in Sri Lanka has always been a disadvantage for Sri Lanka in comparison with regional competitors.

“Our member companies are unable to shift production to the off peak period due to a number of reasons. Given the employment of a large number of female employees, the lack of transport facilities in the night, the nature of production activities, kilns running continuously for 24 hours a day, seven days a week and in some companies which have a 24-hour uniform production level, there are no prospects for shifting production to the off-peak period,” he said.

Public Utilities Commission Chairman Dr. Jayatissa de Costa insisted that these submissions would be taken into consideration in determining the final electricity tariffs.