ISSN: 1391 - 0531
Sunday March 9, 2008
Vol. 42 - No 41
Financial Times  

Don’t burden industry with power hike - NCCSL

The National Chamber of Commerce of Sri Lanka (NCCSL) has urged the government not to further burden industry with a power hike and to make sure government agencie run efficiently without taxing the public.

“The private sector should not be taxed to cover wastages by certain government organizations and the time has come to review their performances and make them run effectively with minimizing wastage, overheads and administration cost if we are to develop the economy by increased foreign and local investments,” it said in a statement criticizing the plan to raise the electricity hike.

Several chambers, associations and individuals have raised serious concerns over the proposed new electricity tariff saying that apart from heaping more problems on the people, the new tariff was further subsidising waste and mismanagement.

The NCCSL said the tariff has been continuously increased for the last three years resulting in the locally produced products already becoming uncompetitive. Sri Lankan products have to compete with the products manufactured in countries which heavily subsidize industry. The chamber said whilst appreciating the government’s efforts to develop local industry, infrastructure facilities and providing uninterrupted electricity supply, said the increased tariff will result in making ‘our’ products, especially those manufactured by the small and medium industries totally uncompetitive.

Sri Lanka products have already become uncompetitive in the global market due to the high utility bills taxes and cess levied. Cost of production has sharply gone up leaving a very thin margin. The chamber has proposed to the government on previous occasions to enhance the efficiency of the CEB by minimizing transmission losses and by restructuring the organization. It was observed that many sites that could be used to generate power through mini hydro schemes are unutilized. During the period 2005-2007 fixed charges for electricity was increased remarkably from Rs. 30 to Rs..240 for upto 10 KVA, Rs.230 to Rs.500 for above 10 KVA for small industries. In case of large industries the rate has gone up from Rs.800 in 2005 to Rs.3,000 in 2007 for consumption over 10 KVA. The government, it said, should take stern action to nab all the illicit electricity trappers immediately, as it had become a major practice in many parts of the country.

“We propose to the government to restructure the CEB so that it will function effectively and recover all the debts from various government institutions and make those government organizations function efficiently without being a burden to industry, the private sector and the general public,” the statement said.


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