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A Welcome Move

by malinga
February 23, 2024 1:05 am 0 comment

The decision taken by Power and Energy Minister Wijesekera to remove the increased electricity tariff imposed in October last year would indeed be greatly welcomed by the public.

The power tariff upward revision certainly added to the prevailing economic hardships endured by the people to a great degree. Although even with the elimination of the tariff increase electricity bills will remain high, the move will now make the public breathe easier which is saying a lot given the prevailing Cost of Living that has reached the stratosphere. It is not clear what motivated the Minister to slash the electricity tariffs which is going cause the financial setback to the already debt ridden CEB, although it has been making profits in recent months primarily due to the usage of hydropower during the rainy season.

The slash in the increased power tariff, which as already mentioned will to some extent ease the CoL burden will also now make the public who had hitherto defaulted meet their bills payments in due course.

Already power supply to nearly 800,000 homes has been disconnected due to the non-payment of bills. The high electricity rates are the chief cause for this with the people hard-pressed to meet even their basic needs for survival. The escalating prices of some of the essential commodities could be mainly attributed to the high electricity bills of the traders and businesses with some small-time traders even forced to shut down. Sri Lanka already has the highest power tariffs in South Asia, which is not good news from the point of view of investors.

The Government must take steps to ensure that the prices of essential items such as food and medicines are brought down in proportion to the reduction in the proposed power tariff. Traders were quick to raise their prices using the high cost of electricity as the main excuse – mostly out of proportion to the actual increase. But when electricity bills as well as other items such as fuel are reduced there is usually no corresponding price reduction, which amounts to cheating the public.

The Consumer Affairs Authority (CAA) which is practically dormant should be made to carry out checks on traders so that prices of goods, particularly essential medicines are brought down in proportion to the power tariff reduction. This should also be the case regarding any future reduction in fuel prices instead of permitting particularly the private bus operators to cash in on the advantage at the expense of the public.

With the increased Value Added Tax (VAT) too now in force there could be a steep rise in the CoL. Any concession, therefore, should be most welcome. In that sense, the move by Minister Wijesekera to reduce the electricity bills should be commended.

Hopefully, others will follow suit to make their own contribution that would ease the burden of the people to a great extent, especially the farming community who are complaining about the high cost of fertiliser which is one of the reasons for the skyrocketing prices of vegetables.

It is also very much in doubt if the electricity tariff reduction would be a permanent feature since it is the recent rains that have led to this state of affairs that has made the bulk of electricity production done through hydropower, according to the Minister’s own admission. The dry spell could be upon us sooner rather than later in all probability exhausting the hydropower capacity, making it necessary to depend on thermal power which once again would push electricity bills up.

The solution therefore lies in looking for alternative renewable energy sources such as wind and solar power. It is the absence of initiatives by all past Governments in this respect which has contributed to the soaring electricity bills. The lack of political will too has made its own contribution as seen from the inordinate delay in commissioning various powers.

CEB engineers too had pushed back from going for alternative power sources for obvious reasons. Today many foreign companies are reluctant to invest here chiefly due to high electricity costs, which eat into profits. They instead turn to countries such as Bangladesh where power costs much less.

Even certain local enterprises too have shifted to Bangladesh for the same reason. Hence, the economic cost to the country too could be incalculable as a result of the lack of cheap energy sources.

Trade Unions too have contributed in their own way by preventing the establishment of power projects. Noises are already being made against the advent of the Adani Group for setting up a wind power project in the North.

This was indeed the case even regarding the setting up of private medical universities such as SAITM, which has resulted in most State hospitals going without doctors as a result of the mass migration of medical professionals.

The country can no longer afford to exist in isolation but we should integrate with the outside world if we are not to be left behind. Sri Lanka is already paying a heavy price due to its previous leaders pandering to populism and promoting populist measures. It is time to say that enough is enough.

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