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

Shocks on hold

By Natasha Gunaratne

The new electricity tariff is on hold after the Ceylon Electricity Board (CEB) and the Government were slammed by consumers and the industry for the unfair price hike, in some cases as much as 40 percent higher than current rates. It was due to be enforced from March 1.

On Friday, the CEB came under fire once again at a meeting organized by the National Council for Economic Development (NCED) this week over the proposed increase in electricity charges which industries feel would adversely affect business and render them uncompetitive. At the meeting CEB officials said the price hike is on hold.

All the leading chambers in Sri Lanka were present along with the leaders of certain industry sectors such as apparel, ceramic and tyres. The president of a leading chamber, who declined to be named, told The Sunday Times that the CEB was asked to revise the charges for the industrial sector and come up with a more reasonable proposal. The chamber president said the competitiveness of businesses will be affected if the increases go into effect, particularly for exporters and high energy consuming industries. “It will become untenable for them to continue,” he said.

The NCED is a State-led economic policy making body that has wide private sector representation. The chamber president added that the CEB also has problems of its own which have nothing to do with the industries and that perhaps some sort of Government assistance might be required to balance its own revenue and expenditure.

“Until these matters are finalized, the increase will not be enforced,” a CEB official said. The president of another leading chamber also spoke to The Sunday Times and said the Small and Medium Enterprise (SME) sector which makes up 85 percent of the business in the country will die if the increases are enforced, leading to chaos in the market. Not only will they be uncompetitive in the local market but they will become uncompetitive globally.

He added that Ceylon Glass Company officials who were present at the meeting said they have invested more than Rs. 80 million in their operations and expanded their programme. However, with the cost of labour also increasing coupled with the electricity hikes, the company had said it might have to consider moving its operations out of Sri Lanka.

CEAT tyre company head here was quoted as saying that there is power at a price and that industries are getting shock treatment. If the increases are implemented, they (industries) will become uncompetitive.

To curb wastage, it was also suggested that the CEB do a power audit in cement and tile factories and advise them on how to bring down their charges. It was stated that the CEB should also take an audit and address problems such as overstaffing.“It was a really good meeting,” one chamber president’s said.

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