Exporters raise red alert over electricity hikes

The National Chamber of Exporters of Sri Lanka, only private sector chamber which represents the voice of the exporter, has raised serious concern over the proposed electricity tariff hikes.

The Chamber has a membership of over 450 exporting companies and service providers to exporters encompassing all product and service sectors. They include major product sectors such as Textiles and Apparel, Tea and Tea Products, Rubber and Rubber Products, Coconut Products, Gems and Jewellery, Ceramic and Porcelain Products, Agricultural Products as well as Industrial and Engineering Products. Member companies of the Chamber comprise large, medium and small scale enterprises among whom are most of the leading export companies in Sri Lanka.

Members of the Council of the Chamber which met last week week were of the unanimous view that if the proposed hike in electricity tariffs of around 43% were to be implemented, it would have disastrous consequences on export enterprises which are so vital to sustain the economy of Sri Lanka.

Members of the Council made the following observations among others.

• The existing electricity tariffs of Sri Lanka are known to be the highest among competitor countries in the region.
  
• India provides subsidised power to vital sectors of her exporters. Furthermore power is provided free to certain sectors especially in the state of Tamil Nadu.
  
• In Sri Lanka cost of electricity is high, due to inefficiencies and mismanagement of the power sector. This includes a 20% loss in the transmission of power while the norm for transmission losses is not more than 12%, and power piracy.
  
• Industries which serve the domestic market will be able to pass on the cost of increased tariffs to local consumers. However export enterprises cannot do so as they will be priced out of international markets in which they already face severe competition to sustain themselves.
  
• There is a need for a vital energy plan as well as policies for alternative energy sources to be worked out to overcome any need to increase prevailing electricity tariffs.
  
  In view of the above, members of the Council of the Chamber were of the strong view that any proposal to increase electricity tariffs should be at least differed till the end of the year to enable the stakeholders specially in the export sector, to plan and propose for implementation of alternative strategies to prevent any hike in electricity tariffs. The Council was further of the view that failure to do so would have severe repercussions on the vital export sector which could result in the closure of many enterprises which would not be able to remain competitive in international markets resulting in the loss of foreign exchange earnings to the country as well as loss of employment to many.
  
  The Council therefore decided to earnestly request the Government to give due consideration to their concerns and differ implementation of any increase of the prevailing electricity tariffs.