BUSINESS leaders have strongly opposed the government’s latest move to increase the tariff of electricity saying that the proposed hike would adversely affect the manufacturing sector which is also in disarray. Quoting businesses, the New Nation reported that the tariff hike will push up manufacturing costs thus eroding their competitiveness in the global export market. Local industries have already been suffocated for various internal and external factors and tough conditions of doing business in the country. When the industry sector is trying to recover, the move will dampen them in a hard time and it should be perceived by the government.
We know the country’s industry sector has passed a hard time after the last national election due to the political impasse, investment sluggishness, corruption in banks, Rana Plaza disaster, cargo embargo by the UK, and many more obstacles. In presence of political stability and completion of few road connectivity projects, speeding up of the shipments at the airports, and partially meeting power shortages, the industry sector is on the track to rejuvenation but the move to hike power tariffs would put an impassable impediment to export-based manufacturing units when the trade deficit rises to near 245 percent greater than the previous year.
Bangladesh Energy Regulatory Commission (BERC) recently held a public hearing on power tariff hike proposals submitted by power distribution companies. Stakeholders including consumers and industrialists have opposed the government move to increase bulk power tariffs for distributors. A hike in power tariffs, in chain effect, will hit hard local industries, particularly the small and medium enterprises, steel re-rolling mills and the textile sector as they consume huge amounts of power to run production. They may face an average 8 to 10 percent production cost hike if the proposed power tariff is implemented. Moreover, it will increase the cost of doing business and hurt Bangladesh’s export competitiveness and growth of SMEs. Businesses aggrievedly said the move will also hinder local and foreign investment.
We endorse the businesses call to keep power tariffs unchanged for at least two more years.
