The Sunday Leader

Electrocuting Sri Lanka’s Garments?

By Camelia Nathaniel

The increase in electricity tariffs further burdens the apparel industry workers who are already facing great hardships. The apparel factory owners are also serious about moving their factories to countries more lucrative to their business such as Bangladesh, Myanmar and Vietnam. According to garment factory workers, who are mostly from outstation areas, following the electricity tariffs increase, boarding fees has also increased leaving them nothing to take back home.

However, when the workers took their grievances to their employers and requested them to increase salaries, they declined claiming that even running factories in this condition is doubtful. They claim that having been hit very badly by the GSP plus removal, the increase in electricity tariffs is practically the final nail in the coffin because it is impossible to operate companies and be competitive in the field with such high costs.

Meagre salaries

Speaking to The Sunday Leader Chamila Fernando, a resident of Matara said that her salary is Rs. 13,500 per month. “I was paying Rs. 2,750 for boarding place and now its owner tells that following the electricity rate the boarding fees too will be increased by 60%. Once we paid the lodging charges and charges for other basic necessities we have nothing to take back home. This job no longer benefits us and I now think if it is worth it to continue in this field,” she said.

Lalitha, another worker employed at the Katunayake Free Trade Zone claimed, “My salary is about Rs. 14,000, and I am now forced to pay Rs. 4,000 for the boarding place. Once I pay it only a mere Rs. 10,000 is left for my other commitments. At this rate how do we survive and what is our future? We are in a dilemma as to what would happen to us because we hear that the factory owners are considering moving to other countries that have cheaper overheads. There is also speculation that the garment factory owners are to import cheaper labour from countries such as Bangladesh and Myanmar. If this happens what is our plight? We have worked in this trade for so long and we have given our blood, sweat and tears to the industry. Why is the government not helping us?” she lamented.

Other side of the coin

Meanwhile, the boarding house owners claim they too are finding it difficult to survive as the electricity rate increase not only affects the monthly electricity bill but it also has an impact on all other essential commodities. S. Weerasinghe who runs a boarding house in Katunayake said that he had been operating the facility for the past 10 years, now it is increasingly difficult to provide food and lodging at such low rates. “I understand that it is hard for these workers to bear the increasing boarding house fees. But we and our families too have to survive and this is our only income. The electricity rate hike will increase the prices of food items as well and we cannot bear the burden. Sometimes the occupants fail to pay the boarding house charges on time due to their commitments. But we are also helpless. We can do nothing either. I wish the government would do something to cover the losses incurred by the CEB and not keep taxing the people at every turn,” he added.

Meanwhile, Convener and General Secretary of the Free Trade Zones & General Services Employees’ Union (FTZ&GSEU) Anton Marcus told The Sunday Leader that the 60% increase in electricity rates was the highest increase ever imposed in the country.
According to Marcus, about 50,000 garment workers are employed in the Free Trade Zone. “They receive a basic salary of less than Rs. 10,000 and they have to manage their expenses with that amount, and with the increase in boarding house fees they will not have anything left to take home. The majority of the workers in the FTZ garment sector are migrant workers living in private boarding houses. Their owners inevitably will raise the charges because they have no other option. On the other hand, the employers now agitate claiming that they are badly affected with the power rate hike. We are certain they will curtail most facilities the workers enjoy to reduce overheads. The employers will also deny employees’ future demands,” he warned.

Unfilled vacancies

He said that over 30,000 vacancies were in the garment industry now and the number would increase since the workers would leave and return to their villages or find alternative employment because they would not receive any benefit being in the field. “Then even the boarding house owners will be affected without their income. Therefore we are signing this petition together with the FTZ workers, boarding house owners and even shop keepers in protest of the electricity rate hike that will certainly have a negative impact on their income,” he said.

The petition was signed on April 30 at the Katunayake Free Trade Zone main gate and in Biyagama industrial area.
Marcus further said that the Apparel Exporters’ Association had decided at its annual general meeting that it was going to import workers to fill the vacancies from Bangladesh, India and Bhutan.

Migrant workers

“They know that the conditions in Bangladesh are so bad with the deplorable safety records. They would prefer to come to Sri Lanka and work. The Apparel Exporters’ Association said that it was even prepared to provide hostel facilities for the migrant workers. However, it is not willing to provide hostel facilities for the Sri Lankan workers already employed in the garment sector and to ease their burden of boarding house fees, etc. It is clear by the AEA actions that its members are planning to provide the workers with hostel facilities within their factory premises, so that they could keep them inside as bonded labour and get them to work 24 hours.

Already migrant workers are employed in the ironing sector under the tourist visas, and they cannot go out from the factory premises as they could be caught and deported. The BOI has arranged to give some migrant workers service permits under the tourist visa, which is completely unlawful,” he stressed.

“If the situation continues, Sri Lanka too will be converted into a Bangladesh with poor facilities and deplorable working conditions” he warned. “Earlier we told the Bangladeshi government to take Sri Lanka as a model, yet today the tables have turned. If the Sri Lankan employers are going to continue in this manner they cannot claim that the garments produced in Sri Lanka are guilt-free garments. When workers are available in Sri Lanka for the garment sector and the employers are ready to improve the working conditions, and pay reasonable salaries, their effort to import labour is very sad. The government has provided all infrastructure facilities for investors to start up factories because they are supposed to generate employment, but if they are not doing so, the government should cancel their licences.

The government has granted them facilities with the people’s taxes and they owe it to the people. Finally what will take place is Sri Lanka will lose its markets in Europe and America. Now Sri Lankan garments have a good market because its quality products,” he said.

“If the government continues in this manner, we will certainly rally the workers and protest making the world aware that the garments produced in Sri Lanka are not guilt free, which will certainly affect the industry,” he warned.

Revised electricity tariffs effects

Instead of taxing the consumers the CEB could cover their losses if they would recover arrears due to them from several government institutions. It has to obtain 13,758 ordinary and 1,003 bulk supply accounts that are in arrears amounting to Rs. 324,85 million and outstanding Rs. 1705 million as at November billing date 2012, excluding the November Bill.
Meanwhile the government has decided to revise electricity tariff enabling the consumers who use only 61 to 180 units to receive a 25% fuel surcharge reduction.

According to the Ministry of Power and Energy those using less than 60 units do not have to pay any tariff increase as per the President’s May Day pledge.

Tea Smallholders Lament

Sri Lanka’s tea smallholders, who account for 79% of the national tea output, warn the high production cost can affect the entire industry reducing adversely the national tea output.
Speaking to The Sunday Leader the organiser of the National Federation of Tea Small Holders, Lal Premanath said that earlier a cess tax was charged from exporters and it was deposited and directly used to uplift the tea industry. “But it is now being deposited in the treasury. The new method reduces benefits for the tea smallholders,” he said.

“Recent past, about nine Ceylon Tea promotional centres had shut down even though they were set up spending a large sum of money. Although we had many tea researchers carrying out tests and researches on tea and other related fields to enhance the production, today due to the lack of funds these researchers have either sought alternate income sources or have migrated. Today small scale tea producers have to pay even to a soil sample test,” he said.

He said that tea smallholders are finding it hard to sustain because of the increasing production cost, mainly driven by higher labour costs. “Last year the country’s income from tea exports was about Rs. 355 million, while 79% was by tea smallholders. The smallholders have cultivated about 220,000 hectares in 12 districts and about 500,000 tea smallholders are in the country. Almost three million people throughout the country are in the tea industry directly or indirectly. The three main regions cultivated by the smallholders are Ratnapura, Galle and Matara. However the production cost per kilo of green leaf is about Rs. 55.00 while the market price currently is only about Rs. 55.00 to 60.00, while in certain instances the tea smallholders in fact have to bear losses,” he added.

Re-cultivation which is done once in 12 years is impossible now. It indicates a certain bleak future for the tea industry, added Premanath. “Sri Lankan tea which was in the forefront has now declined to around the fourth position in the world market, while countries like Vietnam, Kenya and China grabbing the international market. It has been a disastrous blow to the industry and now the tea industry is staggering to survive the increased electricity tariffs. The increased electricity charges will also have an impact on transport and processing cost increasing the total production cost drastically making it impossible for the tea industry to be competitive in the world market,” he warned.
Premanath further added the reputation that Ceylon tea enjoys in the world is fast deteriorating, and if the government does not pay attention to revive the tea industry, Ceylon tea will become a thing of the past.

5 Comments for “Electrocuting Sri Lanka’s Garments?”

  1. Dot

    I am apalled that a garment worker is paid only a mere RS 3000 a week which would convert to $30 approximately . That is barely enough to maintain a life style of self reliance and comfort . Is it that or nothing mentality of the manufacturing sector .? Some of the deigner clothes fetch such High prices at the retail outlets sometimes over $100 dollars a piece . The World organizations of labour is over taken by the global trade for maximum profit . It was always a feasiblity policy of the investors involved in the Textile trade to study the cost factor and then if the cash flow gets less to move on to another country that would open the door even for a short while and import some of the trained labour from ours to set themselves up . May be this is neo colonialism or what evr . Just imagine the plight of the domesticsa large silent working sector who are paid less tha /rs 10000 a month now trying to bring home the food ,educate their children and maintain a happy out look so that mental depression does not enter their lives . It isonly a smal electricity tariff for the rich and the famous but a big up heavel for those that budget with less !This letter may not be published but at least someone would read and nod in aggreement .

  2. M.V.R.Perera

    This is the reason the Authorities should go for accelerated BOT coal power projects as much as needed for the socioeconomic development of the people which will save a billion rupees per day by replacing oil for electricity and also for most of our transport and as such the rupee appreciating to about 50 per dollar and as such a unit will cost only rupees 3.50 what ever amount consumed

  3. Shaik Anwar Ahamath

    The utilities companies in most countries are run as a social service and not as a conglomerate seeking to maximise profits with monopoly customer bases. The government is duty bound to check the cost of their raw materials and subsidise where necessary just like they would if the price of sugar or rice should rice. This electricity price hike is unacceptable as it factors in to all other products and consumables, jeopardising our cost of living index and inflation.

  4. NAK

    The high demand for electricity is becuase of these energy guzzling factories. Because they demand more electricity CEB is forced to generate more at a higher cost.The only benefit Sri lanka gets from these fsctories are the meagre wages paid to the workers and the elctricity bill as everything else is imported. If that electricity bill is also subsidized at the expense of the small consumers,there is no point having these factories here until we find more economical ways to generate electricity.

  5. Dammika

    It is a shame how Secretary MMC Fedinando and Chairman Ganegala undermines the value of an executive president’s words. President on May 1st declared that “for those who consume less than 60 units not even 5 cents will be increased. Clear instructions have been given in this regard”. Now the secretary Mr. Ferdinando and Chairman Mr. Ganegala tries to interpret that for those who consume 30 to 60 units there will be an increase. First time in Sri Lanka officials have dared to ridicule the executive president in Public who lead the war against LTTE to a successful end! Good lesson to HE for keeping these crooks around. It is surprising that even President’s secretary keeps silent and allow HE’s name to be tarnished.

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