The sole trade chamber representing Board of Investment (BOI) firms, the Free Trade Zone Manufacturers’ Association (FTZMA), expressed displeasure with the Cabinet’s approval to increase electricity tariffs for those who consume a large number of units, mainly manufacturing industries, and urged the Government to avoid destroying infrastructure and make the environment conducive for BOI enterprises to continue operations. According to FTZMA, BOI firms are the only export sector that brings in much-needed foreign currency to the country, accounting for 70-80 per cent of the Government’s foreign income.
FTZMA said despite being acutely aware of the country’s current condition they recognise that a modest tariff revision is required as a result of the rupee’s depreciation against the US dollar, but cannot agree with the three to four folds of the bill cited in the proposal. “BOI enterprises are also having difficulty continuing to operate in the country, and the disparity in ROE is having a detrimental impact on their business entities, with the effect cascading down the entire supply chain”.
They also noted that while installing Solar PV panels on rooftops of manufacturing plants is a good idea, they do not capture even half of the required energy due to roof capacity limitations and lack of panels, as well as the exorbitantly high cost of solar batteries to store energy. FTZMA also highlighted that it is clear that the CEB has been delaying payments to renewable energy operators/companies that have generated solar power for the national grid under the net plus scheme since January 2022, and that the current price paid by CEB of Rs 22 per unit has no comparative advantage to the energy producer, resulting in a serious deterrent to potential investors in the renewable sector and putting the country’s ambition to become a high renewable energy generating nation on hold.
“As per the foregoing, we believe that the intended proposal for an increase in electricity should take into consideration many aspects, particularly from the foreign direct investment facilitation viewpoint and such revision should match with neighbouring countries or else the cost of manufacturing in local BOI plants will become extremely high and we will be losing competitive advantage as well”.
By Sulochana Ramiah Mohan