MANUFACTURERS WOULD RELOCATE IF LIGHT RATES GO UP

WE would move our businesses abroad if electricity rates are jacked up to an unreasonable level!

That is the firm stand of Trinidad and Tobago’s manufacturers as they toughen their resolve against increased charges being proposed for Trinidad and Tobago Electricity Commission (TTEC).

The Trinidad and Tobago Manufacturers’ Association (TTMA), under the brand-new leadership of busybody Roger Roach, is determined to resist any exorbitant rise in electricity rates.

The no-nonsense stand ties in with the determination of many manufacturers to shift their operations to Caricom countries with less stringent running costs.

There are already broad hints that more manufacturers are eyeing Guyana, one of the fastest-growing economies in the world, and Suriname, whose energy and hydropower sectors have been blossoming.

A number of T&T businesses operating in various sectors have already shifted to Guyana, where there are unprecedented opportunities.

TTMA has been holding discussions on the rate increase with the Regulated Industries Commission (RIC) and has commissioned an independent analysis of the impact of a rate increase.

But many manufacturers have already conceded that the RIC would award a significant hike and that would place their businesses in a financial tailspin.

The small and medium-sized business sector and business organisations representing various communities are also fiercely opposed to the steep rise being sought by TTEC.

The electricity commission wants increased charges of being 51 and 63 per cent for commercial consumers, and 15 and 64 per cent for residential clients.

Manufacturers say there would be major financial fallouts, including an expected 15 per cent rise in food prices.

The costs of grocery items have climbed by an average of 60 per cent since 2018, in an environment of virtual wage freeze, high unemployment, and limited social welfare support.

Economist Dr. Vaalmiki Arjoon had previously said that the higher TTEC prices could lead domestic and international investors to relocate to Guyana or Suriname.

Arjoon noted the costlier rates would add to existing higher fuel prices, inefficiencies at the ports, cost of Customs overtime payments, “and a host of other obstacles in the business environment.”

Guyana’s Minister of Finance Dr. Ashni Singh recently said that “there is no shortage of business opportunities in Guyana.”

Singh noted that inflation is being contained and there is a stable exchange rate and generally a macroeconomic environment that makes Guyana “one of the most attractive investment destinations.”

Even before the TTEC rate increase issue, many entrepreneurs had stopped investing in T&T because of the declining economy, absence of an enabling environment, the crime crisis, and the weak procurement law.

In addition, red tape in the public sector has placed T&T among the worst in the western hemisphere in opening new businesses.

Entrepreneurs are also grousing about the slow pace in which Value Added Tax (VAT) refunds are being issued, saying that that has hampered their working capital.

Two years ago it was estimated that large domestic corporations had $5 billion in capital that they had declined to plough back in the T&T economy.

Some large firms, like Massy, have made investments in Florida, USA, and other places.

With the Government determined to make TTEC financially independent, RIC appears duty-bound to impose high rates upon electricity consumers.

A serious deadlock may be lying ahead.