Daytime power cuts disrupt industry
With power cuts being extended, manufacturing industries have been badly
affected having to face mounting costs, disrupted production cycles, and
an inability to meet orders on schedule. The worst affected are small industries
and energy-intensive industries such as glass, cement and ceramic manufacture.
"Power cuts are playing hell," said Tissa Fernando, managing director
of Banalona Garments, a banian-knitting business which employs about 40
people. "Production has dropped but I still have to pay my staff. We're
not in a position to buy generators because of the cost." Fernando said
he was forced to stop production for two and a half hours every day and
now finds it difficult to meet the competition from garment exporters in
"The power cuts will kill industry," declared Dr Bandula Perera, managing
director of Ceylon Glass Co. and head of the Industrial Development Board.
Energy-intensive industries like glass were suffering badly, he said.
"A 30-second power cut cost Rs. 50,000 - such is the impact on heavy
industry," he said. Ceylon Glass pays Rs 4.5 million a month for electricity,
The introduction of staggered power cuts which keep changing daily makes
it very difficult for industries to prepare production schedules, said
Asoka de Z. Gunasekera, chairman of the Ceylon National Chamber of Industries.
"Power cuts have now unfortunately shifted to the daytime," he said. "This
has aggravated the situation."
The chamber has asked the government to encourage industries to relocate
themselves at specified industrial estates that would have all basic infrastructure
facilities such as power by giving incentives like tax breaks and duty
waivers, Gunasekera said.
The recent Ceylon Electricity Board move to increase the rate at which
it buys power from the private sector and allow power sharing was "encouraging,"
The chamber was doing a survey of its members to find out the impact
of the power cuts on their businesses, he said. Industrialists had reported
losing orders because they were unable to ensure delivery on time, he said.
Production costs had also gone up with factories being forced to schedule
overtime work because of the daytime power cuts, Gunasekera said. But,
he said, industrialists were aware that the power crisis was the result
of "the sins of the previous government".
They found the new government's attitude towards the business community
and liberal economic policy and commitment, encouraging, he added.
Dr. Bandula Perera said small businesses which account for 90 percent
of domestic industry, were badly affected, not having the required turnover
to sustain themselves during lean periods and not being able to afford
stand-by generators. "Those guys are dying," he said. Many businesses were
"not running fulltime and were bleeding," he said, adding that it would
be a matter of time before they go under.
K. U. Sumanasena, vice president of the Sri Lanka Chamber of Small Industries,
said that small and medium-scale industries were finding it very difficult
to cope with the power cuts.
"The daytime power cuts have made it very difficult to schedule production,"
he said. "They disrupt batch processing production." Most small industries
were not equipped with stand-by generators because they were unable to
afford them, he added. The need to re-start production lines after power
cuts meant extra costs, Sumanasena said.
"Sometimes factories run for only a few days of the week and then shut
down," he said. "Exporters are badly affected," he added. "They can't meet
delivery times and have lost orders."
Lyn Fernando of garment exporter Creations and a former head of the
Exporters Association said big apparel exporters were managing with the
crisis because they had stand-by power and the ability to import accessories
in case their local supply was disrupted by power cuts. "Most of us have
generators and we're using them to the fullest capacity," he said. "We
are co-operating with the government. Our only concern is that these are
stand-by generators, we have been running them for sometime, so there is
a fair amount of wear and tear - they are not meant to run 10-12 hours
a day." Factory staff was "feeling the strain" because their schedules
were disrupted by the power cuts, he said.
CB eases foreign exchange controls
By Hiran Senewiratne
The Central Bank has decided to relax exchange control restrictions, allowing
those travelling overseas to carry more foreign currency in cash and making
it easier for companies to invest abroad.
Controller of Exchange H.A.G. Hettiarachchi said that a new Foreign
Exchange Management Act has been drafted to replace the existing Exchange
The amount of foreign exchange Sri Lankans travelling abroad can take
in cash has been increased to $5,000 from $1,000 and the value of unused
foreign exchange they can retain on their return has been raised to $2,000
Restrictions on exporters retaining their proceeds in offshore domestic
banking units are to be relaxed while procedures for companies wanting
to invest abroad are to be streamlined, cutting the red tape that delay
such investments, Hettiarachchi said.
These measures are being taken under the government's 100-day programme.