A collective of trade associations including the Joint Apparel Association Forum (JAAF), the Federation of Chambers of Commerce and Industry in Sri Lanka (FCCISL), the European Chamber of Commerce in Sri Lanka (ECCSL), the Exporters Association of Sri Lanka (EASL), the International Chamber of Commerce Sri Lanka (ICCSL), and the National Chamber of Exporters (NCE), are calling for a reduction in water tariffs for industrial users. This call comes as part of a broader effort to alleviate the financial strain on Sri Lankan industries and to advocate for the implementation of a cost-reflective pricing formula that ensures fair pricing for essential utilities.
Last month water tariff for domestic consumers was reduced by 7 percent. A gazette was published implementing a 4.5 percent tariff reduction for government hospitals and a 6.3 percent reduction for temples and other places of religious significance. This revised tariff policy took effect from August 21. The Associations questioned the decision to leave industrial tariffs out of their pricing formula. JAAF Secretary General, Yohan Lawrence said, “Water is a critical input for Sri Lankan industries, directly influencing operational costs. High tariffs can severely impact competitiveness and deter investments in sectors like manufacturing. A progressive approach to water tariffs is essential for sustaining economic recovery and maintaining global competitiveness.”
The new pricing formula, in accordance with an agreement with the International Monetary Fund (IMF), aims to reflect the true costs of water supply. Given recent reductions in fuel and electricity tariffs, further adjustments to water tariffs are being considered.
Under the new tariffs, a range of reductions are now in place across the domestic tariffs, but industrial tariffs remain unchanged and the trend to continuously increase industrial tariffs remain.
The tariff for water supplied to BOI zones for example was increased from Rs. 65 to Rs. 85 in 2022. This tariff was again revised in 2023 to Rs. 150 per unit.
