EDB warns looming SLPA tariff hike likely to hamper export targets and export growth momentum

Sri Lanka’s Export Development Board (EDB) warns that the looming Sri Lanka Ports Authority’s (SLPA) arbitrary tariff hike is likely to hamper the country’s export targets and the current export growth momentum, while potentially jeopardising the implementation of the key export strategies such as the National Export Strategy, which are vital in transforming the country’s economy to an export-driven economy.  

“The initiative of upward tariff revision by the SLPA has become a controversial matter raising many concerns of exporters/importers during tough times, where Sri Lanka is trying to find its position back in the world map as a competitive exporter.

However, the SLPA seems adamant to go ahead with this implementation, disregarding the concerns raised by the industry sources revealed. Though the players who are engaged in international trade continuously insisted that rates remain unchanged, it is unfortunate that the authorities are still trying to act in favour of upward revision,” the EDB stated in a press release yesterday. 

A tariff revision was initially imposed effective from January 1, 2019 without any prior notice given to the industry, which led to confusion, inconvenience, disruption of business and losses to trade. 

Eventually when the matter was raised, it was agreed upon to take necessary action in order to revoke the relevant Cabinet decision, which resulted in the former tariff (which was prior to January 1, 2019) was re-implemented effective on February 7, 2019. 

However, the industry also alleged that the authorities are also yet to refund the arbitrary tariff charged in the period to the relevant traders. 

The EDB revealed that during the consultation session with the industry stakeholders, the authorities asked the industry stakeholders to provide a detailed analysis on the impact of the upward revision, considering the last 20 years’ trade statistics.

However, the industry stakeholders pointed out that it is not practical to collect data and analyse due to its complexity and further they questioned the relevance to do such detailed calculation to understand the impact of any cost increase of this nature.

The EDB noted that the SLPA is now adamantly moving towards the implementation of tariff hike disregarding the concerns raised by the industry.

“The industry perceived this as a unilateral and arbitrary decision taken by the SLPA in a situation where they are enjoying the financial benefits of the rupee devaluation as well,” the EDB said. 

The industry stakeholders have further pointed out to the authorities that the increase of the SLPA rates would adversely impact the competitiveness of these products as lot of imports are done as parts, accessories and raw materials for exporting products.

“Moreover, exports are already hit by drought and power cuts and on top of those issues, this rate increase will become rubbing salt on the wound,” the EDB added, quoting the industry stakeholders.

Considering the severe impact on trade and importance of resolving the matter fast to ensure the smooth functioning of trade, the EDB announced that the apex body has decided to open up this matter for further discussions publicly.