Sri Lanka industries to get biggest subsidy after tariff hike

Apr 02, 2013 (LBO) – Industries will get an annual subsidy of nearly 15 billion rupees even after a tariff hike proposed from April, hotels will be marginally subsidized and customers classified as general purpose pay in excess of costs, an analysis by the regulator shows. A document prepared ahead of a public consultation scheduled for April 04 by the Public Utilities Commission of Sri Lanka shows revenue from industries who were heavily subsidized already will go up to 69.9 billion from 64.9 billion rupees.

But industries would still get a subsidy of 14.7 billion rupees a year.

Customers classified as general purposes which are mostly businesses in the services sector would generate profits of 16.7 billion rupees for the Ceylon Electricity Board generating revenues of 60.1 billion rupees, and helping cross subsidize industries.

Industries have been a powerful lobby in getting power subsidies, though past tariff hikes.

Critics say some industrial customers asking for subsidies at the expense of the rest of the society include tariff protected ‘domestic production’ businesses that are already burdening the poor through high prices.

Others are more efficient export oriented industries catering to customers in rich countries.

The regulator has