KARACHI: The industry will face a severe situation in the wake of discontinuation of gas supply to captive power generation for general industry from 1st February and the export-oriented sectors from 1st March 2021, leaving a bad impact on the economy and exports.
This was stated by Mian Nasser Hyatt Maggo, President FPCCI, addressing a rare joint press conference flanked by President Karachi Chamber of Commerce and Industry, Shariq Vohra, President Employees Federation of Pakistan, Ismail Suttar, Vice Presidents FPCCI Ather Sultan Chawla, Nasir Khan, Hanif Lakhani, Khurrum Sayeed, Zubair Motiwala, Javed Bilwani, Junaid Makda, Zain Bashir, Asif Inam, Haroon Farooq, and Chairmen of all Town Associations at the Federation House.
The industrialists and exporters vehemently rejected the cabinet decision and appealed Prime Minister to revisit this decision in the best interest of the survival of industry and for enhancement of Pakistan's export and creating employment in the country.
The President FPCCI said that industry is already confronted with many challenges particularly with respect to procurement of long term orders for the exports. However, the Pakistan's exports when witnessing a growth this decision has badly affected confidence of foreign buyers and asking for completion of their orders and it is apprehended the export orders are likely to shift elsewhere to the other competing countries. He also quoted that Pakistan utility tariff is comparatively very high than the other regional countries. He further said that transferring electricity from captive power to grid will take time and costly not feasible as the cost of electricity generated by our captive powers is lower than the cost involved in shifting to grid. Most of the industries were running on natural gas using boilers and regeneration system so it was impossible to be converted on the grid and change the whole appliances within one month.
Maggo stated that the decision of Cabinet Committee on Energy (CCoE) appears to have been taken on non-professional advice and without consultation of main stakeholders that is businessmen and apex bodies. He further said that this decision will not only harm the economy of Pakistan but will also damage our image with international buyers which seem a conspiracy against the progress made by Pakistan in the last two years by the present government. He also criticized IPPs agreement signed in the past and said that the decision of the CCOE doesn't fully clarify to the Prime Minister about the severe impact. The Prime Minister would have not allowed this decision if he was presented the whole picture. The Prime Minister’s vision of 10 million jobs was on the basis of the industrial expansion by the private sector that the public sector could not generate such huge employment. This decision will also damage the vision of providing 10 million job and enhancement of exports and industrialization.
While addressing the press conference, Shariq Vohra, President Karachi Chamber of Commerce and Industry and Zubair Motiwala showed surprise on the decision and stated that they would not allowed K-electric sabotage Karachi's progress and development and both representative from Karachi Chamber strongly emphasized that government should not take such decisions that create labor unrest due to closures of factories. They mentioned that Government report that recovery from industry is 97 percent and further told that the problem is not the electricity generation rather it's distribution through grids as we have obtained significant generation capacity while for the last several years the government didn't enhance grid capacity and necessary measures to address distribution, transmission and line losses and electricity theft.
The press conference was also informed that the previous government signed agreement with IPPs in dollar terms when dollar was lower at nearly at Rs. 90 while now it is around Rs.160 due to depreciation which is also causing losses.
Shahzaib Akram, Sr Vice President of the FPCCI feared that the suspension of natural gas to industries would affect the exports and employment and stated that business community is ready to discuss this matter with government. Maximum industrial units have been closed from the last 15 days especially ceramic units. Government at the one hand providing construction industry packages/amnesty to boost the economic activities and on the other hand, creating hurdles to the construction and allied.
Mian Nasser Hyatt Maggo, President FPCCI urged the government to review the decision as the economy can't sustain such unfavorable decision at a time when global slowdown prevails. He further suggested that before taking such decision, business sectors, especially the FPCCI, must be consulted.
Copyright Business Recorder, 2021