Sri Lanka should stop ad hoc, shock tariff increases: power users

Apr 16, 2013 (LBO) – Sri Lanka should stop raising power tariffs suddenly by large percentages after driving the economy to crisis, but use an already established methodology to revise prices in an orderly way, consumers said. “These ad hoc tariff increases are bad of the industry,” Srilal Miththapala, representing hotels at a public hearing on proposed tariff hike called by the regulator, the Public Utilities Commission of Sri Lanka said.

“If you have a road map, saying that this is how it is going to change – we understand the subsidies, we understand all this – to get a cost-reflective set up, put a roadmap and go for it.

“We industrialists, hoteliers all will know. In five years time, yes even a 100 percent increase. No problem. Then we can plan for it.”

Mitthapala said electricity amounted to about 17 percent of overall expenses of a hotel. He said one investor had dropped a project because he could not assess the feasibility of the project due to uncertainty over power tariffs.

Sri Lanka is supposed to revise tariffs every six months under the power regulatory law, but after early 2011 it was not done.

The lack of regular revisions led to a balance of payments and economic crisis and in 2012 Fe