Construction industry warns significant electricity price hike will undermine everything

The tariff hike demanded by the Ceylon Electricity Board (CEB) will destroy what remains of the construction industry, Supun Abeysekara, secretary of the National Construction Workers Union (NCWU) told journalists in Colombo on Wednesday.

Addressing a press conference in Colombo, he said that around 700,000 construction workers have lost their jobs in the last two years. However, following the drop in interest rates, there is some activity in the industry. “People have commenced minor constructions and some jobs have returned.

However, the tariff hike requested by the CEB will destroy any chance of recovery for the construction industry. We operate a lot of machines using electricity and in recent times, the price of electricity went up twice. The price dropped again in June 2023 and the price drop helped reduce costs,” he said.

Abeysekara said that there is speculation that the CEB wants the tariff to rise by over 20 percent. If the Public Utilities Commission approves this proposal, the construction industry will be in crisis, he said.

“The government initially said that tariffs will only be changed twice a year. In 2023, this has already happened. People have asked contractors for price estimates and these have been given because prices have stabilized somewhat. However, if the electricity tariff is increased, all these cost estimates will have to be changed. There needs to be some price stability for economic activity,” he said.

Abeysekara said that in 2022 most firms laid off contract-based employees to scale down operations due to the government abandoning large scale projects. However, there was hope for a revival in the last three months of the year as there had been some investments into construction in the tourism sector, he said.

“The State Minister of Highways recently announced that they will recommence some road development activities. So, the industry was gearing up for a revival. However, a significant electricity tariff hike can undermine everything,” he said. (RK)