NEWLY elected president of the TT Manufacturers Association (TTMA) Roger Roach says the association will call on the Regulated Industries Commission (RIC) to raise electricity rates in increments over a five-year period.

Taking this approach, the 67th TTMA president added, will ease the burden on consumers and give them time to adjust to the new increases.

In an interview on Wednesday, Roach said the proposed rate increases for industrial consumers, if implemented in one shot, would result in a spike in inflation which could be as high as 15 per cent.

He revealed the TTMA commissioned an international accounting firm to do an economic impact study on the proposed increase in rates. He said the RIC proposes an increase in rates for D1, D2 and D3 consumers – industrial and manufacturing plants – of between 72 and 87 per cent, in the first year.

The proposed rate increases would affect businesses along the manufacturing and food processing value chain including production, packaging, distribution and retail which are all considered as commercial entities.

This would have a ripple effect in which the consumer will have to bear the burden of even prices for goods and services, including food.

“If you buy your packaging from someone else and that packaging producer raises the price, whether they make bottles or plastic packages or caps or labels...whatever it is; then your cost of production goes up. You will have to increase your price.

"You sell those to a distributor, which is also a commercial user. Electricity goes up, he increases his price. Then it goes to a retailer who is also classified in the commercial category. That multiplier effect could mean as much as a 15 per cent increase in prices when it reaches the consumer.”

Roach said TT is already reeling from a food inflation increase of 13.8 per cent and a year-on-year inflation rate increase of 8.3 per cent.

The only way the increase in electricity rates in the industrial sectors would not affect citizens, Roach said, would be if the value chain absorbs the additional costs.

“We can’t consider absorbing an 87 per cent increase or a 72 per cent increase...that is unreasonable,” Roach said.

“We are asking the RIC to reconsider, to meet with us to have fruitful solution-oriented discussions so there can be a win-win outcome.”

Speaking on his appointment as president, Roach said he was grateful for the opportunity to represent one of the leading voices in the business community. Roach was also re-elected on the board of directors.

“The manufacturing sector is one that is very important to the diversification of the economy,” he said.

“It is the one sector outside of the energy sector that has the potential to draw a significant amount of foreign exchange. The TTMA is also made up of some captains of industry who have led the way in the industrial and manufacturing sectors. So it is an honour to represent them.”

Roach also serves as chairman of the TTM