Industries issue quit threat over power prices

Barely three months after power tariffs went up, manufacturers are issuing an alert they are opposed to further increases.

The Kenya Association of Manufacturers (KAM) is warning that many of its members could be forced to move to neighbouring countries if the situation was not addressed urgently.

A section of local industrialists have said the new rates could turn Kenya into the most uncompetitive investment destination in the Common Market for Eastern and Southern Africa trading bloc.

Hurting businesses
“Energy cost has made Kenya very uncompetitive and it affects the cost of doing business across all sectors of this economy,” KAM chairman, Vimal Shah, said yesterday at the association’s board of directors meeting.

“The country will not only lose out on new investments but will also have current industries relocating to neighbouring countries with lower energy costs,” KAM said in a statement.

“Kenya needs to check the direction to which it is propelling its development strategy, whether to be a producing nation to a trading one. Is there any need to talk about Vision 2030 when we are so uncompetitive?” asked Mr Shah.

Part of the reason the electricity charges have climbed is the rising oil fuel prices, which two months ago hit the all-time high barrel price of $147.
Companies have protested the recent increase, saying it was hurting their businesses.

Sugar industry
“The impact of the recent electricity tariffs adjustments has been terrible to the sugar industry because we now face a bill of Sh2.7 million instead of the Sh1.5 million bill that we were used to,” Sony Sugar chief executive, Paul Dola, said recently.

KAM said its preliminary analysis showed effective cost per unit of electricity for industries went gone up by almost 86 per cent from Sh8 to Sh15 following the July 1adjustment.

source:bdafrica